Definition of Auditing

The word  'Audit' is originated from the Latin word 'audire' which means 'to hear'.  In the earlier days, whenever there is suspected fraud in a business organization, the owner of the business would appoint a person to check the accounts and hear the explanations given by the person responsible for keeping the account and funds.  In those days, the audit is done to find out whether the payments and receipt are properly accounted or not. 

The objective of modern day accounting is not only for the verification of cash but to report the financial position of the undertaking as disclosed by its Balance sheet and Profit and Loss account.

Definition of Auditing

A precise definition of the term 'Auditing' is difficult to give. Some of the definitions given by different authors are as follows:

According to Montgomery, a well known author, "auditing is a systematic examination of the books and records of a business or the organization in order to ascertain or verify and to report upon the facts regarding the financial operation and the result thereof. "

Spicer and Pegler expanded the above definition as follows:

"An audit may be said to be such an examination of the books, accounts and vouchers of a business as well enable the auditor to satisfy that the Balance Sheet is properly drawn up, so as to give a true and fair view of the state of affairs of the business and whether the Profit or Loss for the financial period according to the best of his information and the explanations given to him and as shown by the books, and if not, in what respect he is not satisfied."

According to Lawrence R. Dicksee, "an audit is an examination of accounting records undertaken with a view to establishing whether they correctly and completely reflect the transactions to which they relate. In some instances, it may be necessary to ascertain whether the transactions themselves are supported by authority."

R. K. Mautz defines auditing as being "concerned with the verification of accounting data, with determining the accuracy and reliability accounting statement and reports."

It is clear from the above definitions that auditing is the systematic and scientific examination of the books of a accounts and records of a business so as to enable the auditor to satisfy himself that the Balance Sheet and the Profit and Loss Account are properly drawn up so as to exhibit a true and fair view of the financial state of affairs of the business and profit or loss for the financial period. The Auditor will have to go through various books and accounts and related evidence to satisfy himself about the accuracy and authenticity to report the financial health of the business.

Difference between Auditing and accounting.

  1. The role of accountancy is to record the transaction in the book of accounts, extraction of trial balance, preparation of Trading and profit and loss account and balance sheet etc.  On the other hand auditing is the examination of books of account and checking the financial statement for the purpose of finding out the true and fair position and results of operation of a concern.  Audit is concerned with detailed examination of the complete accounting records but it does not involve the preparation of accounts.
  2. If the auditor is asked to write the books of accounts, extract an agreed trial balance and profit and loss account and Balance sheet, he would be doing the work of an accountant and not the work of an auditor.  Preparation of account is not the part of auditing.  An auditor, using his appointing authority, needs to check thoroughly, whether the Profit and Loss account  and the Balance Sheet have been properly drawn up and revel the 'true and fair view' of the state of affairs and results of operation of the concern and report it to the parties interested.
  3. Auditing without the prior existence of accounts is not possible.  When the accountant finishes his work, the auditor starts his work.

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Comments 83 comments

M yasir 6 years ago


Expert 6 years ago

well done

Expert 6 years ago

well done

MBag 6 years ago

very informative

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billrobinson 6 years ago from CA, USA

Thanks for the information.

M.Basit 6 years ago

well done

wasim 6 years ago

i need it

Makunda Mirdha, Sambalpur, Odisha, India 6 years ago

very good definition, I like it & it will helps many

Iamsam profile image

Iamsam 6 years ago Author

Thanks all for your kind visits and comment.

It is nice to know that you are benefited by the writeup.


monty 5 years ago

thanks dud..........................

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webgain 5 years ago from Delhi, India

lamsam good writing skill.. keep it up

Francis 5 years ago

It is quite educating i don't dislike it

Aabera 5 years ago

thanks to give definition

Danish Haider 5 years ago

thanks!! for giving us the exact definition of Auditing..

shreya 5 years ago

i really like it it help me a lot........

maryam 5 years ago


prashant 5 years ago


manisha 5 years ago

thaks for giving an actual defination of audting

TARSAME 5 years ago

thanks aton man it was damn helpful

Arif 5 years ago

It is very help full to us...

M.Akram 5 years ago

I like this page. Thanks

IMRAN HAMEED 5 years ago


IMRAN HAMEED 5 years ago


baloch 5 years ago

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ajay 5 years ago

excellent there is a clearity in each of your subject knowledge

SRI 5 years ago

Thnx fr the definition.....

m.shahbaz kz 5 years ago

thanks for give us deff and it is very easy to understand



vikas mishra 5 years ago


tichman 5 years ago

you defintion its clear

marwa mohabat 5 years ago

thanhs for ur useful definition

IJR112 profile image

IJR112 5 years ago

I was an auditor for 4 years. This is a good overview of auditing. Thanks.

kavi 5 years ago

the definition is useful, thanks for that. Something which is missing, the year you publish that article, would be great if the year was present.

Tania 5 years ago

i dont like this............

mukesh tutu 5 years ago

thanks is very helpful

madiha 5 years ago

thanks for giving accurate definition

Macauly L. 5 years ago

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AMINU 5 years ago


maryann 5 years ago

thanks i love your way. Abia poly

oligo paul 5 years ago

that is amazing and encouraging,thank u for the definition

khyat 5 years ago

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hilowle 5 years ago

thanks for the definition i like it really

manu bhardwaj 5 years ago

its really nice page

Benjamin 5 years ago

Thank you so much for such a precise definition.

tariku 4 years ago

this difination very nice appreciat you i need ssume thing for nex day.

Fatima Ishaq 4 years ago

Thank you.

diwakar 4 years ago

it was useful 2 us.......thank u so much......

Chahat 4 years ago

It was very helpul...


geoffrey dereva 4 years ago

ncing.thanks a lot

saihou 4 years ago

I am studying auditing and the definition is very good

Nwachukwu lawrence chika 4 years ago

Thanks 4 accurate & authentc definitns, i luv it.abia poly


i am more than happy for this page....

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sandeep 4 years ago


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very excellent defination i like it....

ANNA SEHLAPELO 4 years ago

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Manoj Vaishy 4 years ago

It's Really Helpful to those who Belong to Accountant Profession

Ranjth Marakala 4 years ago

I'm student of B.Com, the following definition help me to get clear picture. Thanks a lot

Ranjith Marakala Nadoor Udupi dist. 4 years ago

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Av Nyako. fed poly bauchi 4 years ago

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Ayatullahi 4 years ago

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Bala Joseph B/kebbi 4 years ago

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mohammed 4 years ago

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satish 4 years ago

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I.B.A 4 years ago

Please i accept with you defined take very mouhs

feroz alam masud 4 years ago

thanks for excellent defination.

DATTA PATIL 4 years ago

It's Really Helpful to those who Belong to Accountant Profession

tanuja 3 years ago

its a proper pack of audit

suraj 3 years ago

thanks... really helpful..

Teslim from kwara,nigeria 3 years ago

Plz i just want to know why aditing is included as a course in accounting department in an institution,

amina malik 3 years ago

Thanks for definition but i want more

kultaran 3 years ago

nice definition

3 years ago

what are the steps of modern day auditing?

Can anyone help

sangam 2 years ago


prem 2 years ago


prem 2 years ago


raghu 2 years ago

good information

Ashiya khan 2 years ago

Thanks & nice definition

Santanu 20 months ago

thanks its a nice definition

govardhan royal 19 months ago

thnx fr the infrmtn ...I'm rely satisfy

karo 5 months ago

An excellent piece.

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