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Task 1: What is Audit

The Audit is a management function aimed at analyzing and assessing, with winged views any corrective actions, internal control organizations to ensure the integrity of its assets, the accuracy of their information and maintain the effectiveness of their systems management.

Other possible definitions include:

It is a comprehensive examination of the structure of a company regarding the plans and objectives, methods and controls, their method of operation and their human and physical.

"A formal and systematic vision to determine to what extent an organization is meeting the objectives set by management, as well as to identify those that need improvement. "

Financial Records available in Audit

Following are some financial records available in audit.

i) Fixed Asset Register

It is ledger with the date of acquisition or creation and cost of assets used in the practice of the profession, the amount of depreciation taken on these items, the price and date of disposal of these items. It is mandatory for the professions subject to the reporting regime controlled.

ii) Cash Book

This is a ledger that is used for different purposes. In finance, to know how much we have available for transactions. It is used to testify in tax payment of taxes. It is also used for accounting to keep orderly records of receipts and payments of cash and cash equivalents. It is a very important book that takes money management.

iii) Debtors Ledger

The purpose of the debtor ledger is to keep a record of all the transactions of the sales of the company and to maintain a file that how much debt is to be taken from each and every debtor.

iv) Creditor's Ledger

Creditor's ledger is used by any company for the purpose of recording the purchases made by the company on credit. This ledger maintains the record as how much credit is to be paid and when this credit is to b paid.

Task 2: Accounting Concepts

According to the book basic accounting and business papers by Daniel Garcia Ayaviri describes the accounting concepts as: "Science and / or techniques taught to classify and record all financial transactions of a business or undertaking to provide reports that are the basis for decision-making activity ".

i) Accounting Period Concept

This concepts basically shows the period in which the company measures its income. This is also called a fiscal year. This concept records the data from the starting of the company's data till its presentation.

ii) Accrual Concept

This concept states that the company's profit and income is actually recorder when it is earned in that period. This concept states that the revenue and income of the company is not recorded when it is not actually paid or earned or we can say that when it is accrued.

iii) Matching Concept

This concept of accounting states that the transactions are recorded in the financial statement only when the revenue of the company and the expenses made to earn that revenue have occurred in the same accounting year. In short, the revenue and the expenses to earn that revenue should ...
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