Continuous Audit
It is defined as an audit in which the auditor examines the accounting records at regular intervals throughout the accounting year. When it is required that the auditor check the accounts more regularly, the shareholders may appoint the auditor to perform continuous audit.
Final Audit
The term "final audit" refers to an audit in which the auditor reviews the accounts for the entire financial year in one continuous session. Final audits are often begun after the conclusion of the accounting year; however, in order to finish the audit as quickly as possible after the year end, final audits may be initiated prior to the end of the accounting year.
Differentiate between Continuous and Final Audit
| Basis | Final Audit | Continuous Audit |
|---|---|---|
| Period | At the end-of-year final audit is done. | A continuous audit is one that lasts the entire year. |
| Scope | When compared to a continuous audit, a final audit does not include extensive checking. | Accounts are thoroughly examined during a continuous audit. |
| Frauds | In final auidt, the chances of fraud and errors are considerable. | Errors and frauds are less likely with continuous auditing. |
| Visits | The auditor visits once a year for final audit. | During a continuous audit, the auditor visits several times. |
| Dividend | Only the final dividend is declared due to the final audit. | Continuous audit is particularly important for declaring interim and final dividends. |
| Business Scale | Final audit is quite beneficial for small businesses. | For large businesses, continuous audit is desirable. |
| Checking | Employees are subjected to fewer checks during the final audit. | Continuous auditing keeps a close eye on staff. |
| Fee | The fee for a final audit is lower than the fee for a continuous audit. | The cost of a continual audit is higher than the cost of a final audit. |
| Time of Conduct | A final audit is undertaken once all entries and records have been completed. | When entries and records are being prepared, a continuous audit can be done. |
| Suitability | In the case of an effective control system, a final audit may be done. | In the event of a failing internal control system, a continuous auditing system is appropriate. |
