An audit can be done on two bases:
(A) Based on Ownership
(B) Based on Time
(A) Based on Ownership
The following can be audited based on ownership:
1. Proprietorship Audit
When there are proprietary concerns, the owner decides to have the finances audited. The sole trader shall determine the scope of the audit and the auditor's appointment. The auditing work will be determined by the audit agreement and the proprietor's precise instructions.
2. Partnership Accounts Audit
To eliminate any misunderstandings or doubts, the partnership accounts are audited. Financial statements may be audited under the terms of a partnership deed if the partners agree. All of the partners appoint the auditor with their permission. The auditor's rights, responsibilities, and liabilities are outlined in a mutual agreement that the partners can update.
3. Companies Audit
Companies must have their accounts audited under the Companies Act. For the audit of company accounts, a chartered accountant with professional qualifications is required. Joint-stock firms are required by the Companies Act to have their accounts audited by a certified accountant.
4. Trust Audits
The beneficiaries of trusts may not have access to or knowledge of the trust's accounts. The trustees are in charge of managing and overseeing the trust's assets and operations. The trust's funds are kept under the trust deed's conditions and terms. The trust's income is dispersed to the trust's beneficiaries. There is a higher risk of fraud and misappropriation of funds. The trust deed and the Public Trust Act stipulate that a qualified auditor must audit the trust's accounts. The trust's audited records provide an accurate and fair picture of the trust's finances.
5. Co-operative Societies' Account Audit
The Co-operative Societies Act governs co-operative societies. It comprises several provisions about the regulations and operations of these organizations. Certain states have adopted it without making any adjustments, while others have made some changes. The auditor of the Co-operative Society should be well-versed in the specific statute under which the Co-operative Society is operating. He should also review the society's bylaws and ensure that any revisions made to the bylaws have been appropriately registered with the Registrar's Office. Co-operative Societies are exempt from the Companies Act.
6. Government Audit
This category includes audits of government offices and departments. The government of India maintains a distinct department known as the Accounts and Audit Department. The Comptroller and Auditor General of India is in charge of this department. This department serves only government agencies and departments.
(B) Based on Time
Based on time, the audit has the following types:
1. Interim Audit
An interim audit takes place in the interim between two annual audits. It could entail a full audit of the accounts for a portion of the year. It is sometimes performed for the board of directors to issue an interim dividend. It might also be used to deal with sales numbers in the interim.
2. Continuous Audit
A continuous audit is carried out at regular intervals throughout the year or at regular short intervals. A constant audit entails a thorough evaluation of all transactions by an auditor who visits at regular intervals, such as weekly, fortnightly, or monthly, during the trade period.