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Audit means checking of the books of accounts of a business. It also means that if there are no discrepancies found during checking the books of accounts then the person doing the audit must give a clean report about the books of accounts. He then finalizes the audit by preparing the financial statements of the business such that it gives a truthful view of the state of affairs of the business. Nowadays, in this complex modern world, the books of accounts of the company are maintained in the computer. Therefore, the audit tracking software plays an important role in case of audit done through the computer.
Audit is mainly done by the business houses so that they can ascertain the amount of tax they have to pay to their respective governments on the income they have done throughout the year. Many companies in this world have their accounts on the computer. Hence, an expert in the software of the computer can easily manipulate the books of accounts and can cheat the auditor i.e. the person doing the audit. The audit tracking software helps the auditor to track all frauds that are manipulated so that the company or the individual can show less income and therefore pays fewer taxes.
The audit tracking software is very helpful in this modern world as it becomes difficult for the auditor to track the frauds manually. Sometimes some companies commit such frauds that increase the income of the company. The companies do such just because they want to attract the potential investors who rely on the financial statements that the companies advertise. Sometimes even the employees of the companies commit frauds that get unnoticed in the eyes of the management. The auditor through the audit tracking software can detect these frauds. So the audit tracking software becomes very important in this world full of dynamism.
Also sometimes, there are errors on the part of management while recording the transactions in the computer. As such, there is every possibility of the financial statements not giving a correct view of the state of affairs of the business. The audit tracking software helps to prevent such types of errors. In addition, the auditor, during his audit, can inform about the error to the management of the business and then request them to take the necessary steps to prevent the error. The auditor has to be quick to inform the management about the error as more time will make the error bigger and it will have a drastic effect on the affairs of the business.
When there are frauds and errors in the books of accounts of the concern and it goes undetected then it has many side effects. There will be wrong income shown in the financial statements. As such, the planning of the management, which generally depends on the financial statements, goes wrong. Therefore, the whole organization will suffer.
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