Advantages of Final Audit
1. Chances of Change are Limited
Changes to the audit are feasible in the other types of audits. However, no changes of any kind can be made after the audit in the final audit.
2. Verification of the Entire Record
The accounting books are thoroughly examined during the final audit. He has the option of checking 100 percent or sampling.
3. Shareholders Advantage
The shareholders benefit from the final audit since it provides them with the most trustworthy financial information for investing purposes.
4. Benefits to Owner
When a company is large enough, even one owner may not be aware of the true state of the company. As a result, the final audit clarifies the business situation and gives him satisfaction.
5. Convenient or Appropriate
The auditor and client employees will benefit greatly from the final audit. It protects both parties from ongoing disruption.
6. Time Savings
The job of the audit is continuing throughout the year in a continuous audit. It takes a long time to complete. However, the final audit takes a fairly little period in comparison. As a result, time is saved in the final audit.
7. Legal Requirement
The final audit is also useful in determining whether or not the management has met the legal obligations. The management is obligated to comply with the law.
8. Cost-Effective
It is profitable to the client. Because it is only done once a year at the end of the accounting period, it is not a regular hardship for him. As a result, it provides the greatest benefit at the lowest expense.
9. Enhances Productivity
The staff's performance improves as a result of the auditor identifying the employees' weak points. By overcoming these weaknesses, the staff can increase their efficiency.
10. Report Submission
The impartiality and accuracy of the final accounts report is critical to the company's reputation.
Disadvantages of Final Audit
1. Limited Time
The auditor has a large number of clients, all of whom have the same financial year end date. As a result, the auditor's ability to complete the assignment on time becomes increasingly challenging. It is one of the final audit's drawbacks.
2. Reporting Delay
The audit report serves as the foundation for the business's choices. However, this news is a month or two late. As a result, crucial choices are being postponed.
3. There is no way to Check Everything
The auditor's task of checking each and every entry made in the books of account is extremely arduous. To save time, he only uses tests. So many errors go uncorrected.
4. Misrepresentation
Because each and every transaction is not verified, the audit report may not accurately reflect the correctness of the accounts.
5. There is no moral influence
The accounting team is under less stress in this audit. The audit team only comes once a year. As a result, the employees' task does not change.
6. Corrections
The inaccuracies are discovered at the end of the accounting period in this audit. Corrections of errors are also late in several ways. Furthermore, the entire producer takes longer.
7. Report on Audit
The final audit's flaw is that the report is not delivered on time. It's possible that it'll be submitted one or two months late. The decisions must be based on audited financial statements.
8. Frauds which are Planned
The management gets a year to think about and plan how to commit the frauds in this type of audit. As a result, they commit a well-planned fraud that the auditor will have a tough time uncovering.
9. Information from the Previous Year
In this type of firm, the auditor is given historical data to audit. Errors and deceptions are likewise from the past; they have no bearing on the present or future.
10. Checking Everything Thoroughly
There may not be rigorous inspection in the final audit. The auditor has the option of choosing the sample method. As a result, errors and frauds are not detected, and the audit's goal is lost.