INTERIM AUDIT :-
Interim audit is the audit which is conducted between the two annual audits for the purpose of finding the interim dividend. It may be monthly quarterly or half yearly. When any partner or owner or director or a businessman wants to know the reliable results during the financial year then such type of audit may be applied.
ADVANTAGES OF INTERIM AUDIT
1. Publication Of Interim Figures :-
In some cases the publication f interim figures is compulsory. So in such cases interim audit is very useful.
2. Easy Detection Of Errors :-
By conducting the interim audit errors and frauds can be easily detected in time.
3. Check On Staff :-
When the staff of the client knows that at any time during the year accounts are checked for the interim period then they will not commit any fraud.
4. Completion Of Final Audits :-
If interim audit is countered then final audit can be completed very soon and easily.
5. Suggestions Implementation :-
In case of interim audit auditor's suggestions can be quickly implemented.
6. Satisfactory Work :-
Staff of the client may work with proper attention satisfactorily along with the advice of the auditor.
7. Convenient :-
Interim audit is very convenient for the management because they invite the audit staff when their business activity is low.
8. Interim Dividend :-
The management can easily prepare the accounts for proposed interim dividend. Interim audit is very useful to declare this dividend.
9. Moral Check :-
All the work done by any staff members of the company is checked by the auditor in the interim audit, so it provides the moral check.
10. Case Of New Partner :-
In a business when new partner enters, interim audit determines correct position of assets and liabilities.
11. Death Case :-
When any partner dies then interim audit is very helpful in determining the position of assets and liabilities .
12. Retirement Case :-
If any partner wants to leave or retire from the business then interim audit can easily determine the correct position of its assets and liabilities.
13. Price Fixing :-
Goods and services prices are fixed by the management and cost is calculated by adding the profit. The selling price is fixed and for this purpose interim audit is desirable.
14. Encourages Investment :-
Due to interim audit investor rely more on the company performance. He purchases and sells the shares keeping in view the audit report.
DISADVANTAGES OF INTERIM AUDIT
1. Disturbance :-
Regular accounting work of the interim audit disturbs the office work of the client. It is a disadvantage of this audit.
2. Burden Of Work :-
Audit staff will have also to prepare the audit notes when they will finish the interim audit. So the burden of work increases in this way.
3. Changing In Figures :-
A dishonest official may change the figures of accounts which is already audited by the auditor. So there are also a chance of fraud in such type of audit. It is a disadvantage.
4. More Expensive :-
This type audit only increases the expenses of business because it is not compulsory by law.
5. Not Useful For Third Party :-
It has no use for third party because this audit is used only to improve the efficiency and effectiveness of the accounting system.