Question

2.2 Discuss each of the different types of audits that can be used for projects.

Answer 1

An audit, basically is the examination and investigation of a report, system or entity that is existing. There are different types of audits that can be used for projects, which are :

Compliance audit :An audit is performed, in which the procedures and policies of a department or an entity are examined to ensure that it complies with the regulatory or the internal standards. This type of audit is called compliance audit. It is mostly used in the educational institutions and industries that are regulated.

Tax audit : This type of audit is related to the tax returns that can be submitted by a business entity or a person, to check whether the information related to tax or the validation of any income tax payment. This type of audit is performed to make sure that all the tax returns are correct and if there is any more assessment required.

Operational audit : This type of audit deals with the detailing of all the procedures, plannings, goals, etc of the business operations. This type of audit can either be conducted by an external entity or internally, depending upon the needs of the business. The aim of this type of audit is the overall improvement of the business operations.

Financial audit : This type of audit is basically done to make sure that the information in the financial statements of an entity is correct . This is conducted by an entity that is independent of the business that has to be reviewed, in order to give a clear picture of the company to its stakeholders.

Investigative audit : This type of audit is related to the examination of a particular area or an individual that is suspected to be related to a fraudulent or illegal activity. The purpose of such audit is to investigate who is at fault and also collect some proof to charge the people who act against the laws.

Informational system audit : This audit is performed to examine the controls that are located within the technological infrastructure of an entity. It is generally used to identify and solve any problems that stops the system from giving users, the correct information. Also, it makes sure that users who are not authorized to access the data, are unable to use it.