Merits Of Periodical AuditPeriodical audit provides following advantages:
1. Less Expensive
Periodical audit is conducted once in a year. So, an auditor devotes less time and labor. So, the remuneration paid to him will be less.
2. No Disturbance In The Work Of Client
An auditor continuously checks the books of accounts until and unless the work of audit is over. So, the work of accountant of the client will not be disturbed for a ling period of time.
3. Less Chance To Alter Figure
An auditor conducts audit regularly; so there is less chance to alter figure which minimizes the chances of frauds.
Demerits Of Periodical Audit
Followings are the disadvantages of periodical audit:
1. Unsuitable
Big organization has large number of transactions. So, audit of such organization requires more time. Thus periodical audit is unsuitable for big organizations.
2. Possibility Of Leaving Errors
Detail checking of books of accounts is not possible under this method. So, an applies test check. Thus there are chances of leaving errors and frauds.
3. Difficult To Detect Planned Frauds
Generally, the frauds are committed in the direction of top level management. So, such frauds are committed in planned way. Periodical audit does not check in detail. So, such planned frauds cannot be detected.
4. Impossible To Prepare Final Account In Time
Periodical audit begins after the completion of accounting year. It takes long time to complete the work of audit.
