Advantages Or Merits Of Interim Audit
The main advantages of interim audit can be discussed as follows:
1. Less Expensive
Interim audit is less costly than continuous audit.
2. Suitable For Big Firms
Interim audit is very suitable for large and dynamic type of business organizations.
3. Helpful For Final Audit
Final audit can be conducted in short time because of interim audit.
4. Early Detection Of Errors
Errors and frauds can be located before the final audit. It helps to correct such errors and frauds in time.
6. Interim Dividend
5. Moral Check
It creates moral pressure on the employees to perform accounting jobs effectively. It also helps to eliminate mistakes and frauds.
A firm declares interim dividend after conducting interim audit.
Disadvantages Or Demerits Of Interim Audit
The main disadvantages of interim audit can be studied as follows:
1. Alteration Of Figure
Already audited accounting figure may be changed by a dishonest employee. It may create difficulty in final audit.
2. Work Burden
Audit notes have to be prepared after the completion of interim audit. It increases the burden of work.
3. Unsuitable For Small Firms
Interim audit is not suitable for small business organizations with less financial transaction.
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4. Disturbance At Work
Interim audit disturbs the working environment in the office. Regular office activities may be hampered because of audit work.
5. Increase Expenses
Interim audit increases the expenses of the business.
Pros And Cons Of Interim Audit In Short
Pros:
- It consumes less cost and time
- Errors and frauds can be detected quickly
- It makes final audit easier
- It is suitable for big firms to publish interim figures
Cons:
- It may disturb regular office work
- There is a possibility of falsification of financial figures by dishonest employees
- It is not suitable for small business firms
- It increases the work load of audit staff
