BACKGROUND TO THE STUDY

The term audit was first used in ancient Mesopotamia, Greece, Egypt, Rome, the United Kingdom, and India. It derives from the Latin verb audire, which means to hear. The goal of the audit was to find and stop fraud.An Indian study found that after the industrial revolution in the 18th century, auditing developed and expanded quickly. Ownership and management split apart with the expansion of joint stock firms. The shareholders, who were also the business’s owners, required a report on the financial statements of the organization run by the board of directors, who were also its employees.According to Hayes and RICK (2005), anthropologists have discovered records of auditing operations dating back to the early 3000BC. Additionally, according to McNamee (1995), the oldest records ever examined date back to the roughly 5000-year-old Babylon Clay tablets. The auditing industry has changed significantly in recent years.  Internal, external, and tax assessment auditing are a few of the numerous forms.The auditing process has evolved from owners listening to accounts read to using computers to check computerized accounts. The fundamental aims of auditing and the secondary or accidental objective, the subject of this paper, are its two main goals.

According to Section 227 of the Company’s Act of 1956, the auditor’s main responsibility is to inform the organization’s owners as to whether the balance sheet presents a true and fair picture of the company’s financial situation and whether the profit and loss account accurately represents the company’s profit or loss for the fiscal year.

1. b) The secondary goal, which is sometimes known as the incidental goal because it is achieved incidentally to the achievement of the primary goal. Fraud detection and prevention as well as error detection and prevention are incidental goals of auditing. It is evident from the foregoing that the assessment of the Fair view of the accounts results in the discovery of fraud and errors.

After the auditing is finished, the “express of opinion”—which is done in light of the conditions, viability, and constraints—which is the final and most crucial step in the audit process—comes into play. Fraud and mistakes are typically highly prevalent when it comes to money.  This explains why the auditor’s certification of the account’s fairness is crucial for trustworthiness. The Royal Mail Steam Packet Company case raised this situation for discussion, and as a result, the English and Indian corporations acts were revised in 1948 and 1956, respectively, to compel the auditor to state, among other things, whether the statement of accounts are honest and fair.

There have been fraud-related developments over the past 20 years that some have viewed as significantly expanding the scope of audit responsibilities. The surge in management fraud has raised concerns within the corporate community, particularly the accounting profession. Recent internal investigations indicate that employee fraud is widespread and affects both large and small businesses. The cost of fraud and abuse to US organizations is more than 3.9 billion dollars yearly, according to a 1996 report on occupational fraud and abuse (Hillison, 1999). Furthermore, according to the Association of Certified Fraud Examiners’ 2008 survey, fraud costs US businesses 7% of their yearly revenue.

Recently, auditing has suffered greatly. This explains why auditing has received so much attention in the media. Abuses in the USA, like Enron, have shown a lack of objectivity and independence at the executive levels (Agacer, Vehmaneh, and Valcarcel, 1997). Fraud crimes have significantly increased over the past several years all over the world, and based on all signs, specialists in this field expect that this trend will continue. One can infer that there have been several instances of deception from the incidents of Enron and Worldcom. Organizations have been observed to frequently attempt to keep scandals hidden from the public. Daily operations are the scene of several company frauds, which go unreported. Regrettably, scandals are just the top of the iceberg and show where blunders have been made. These losses could seriously cause these businesses to fail. Additionally, as technology advances, particularly with the arrival of computers, this vulnerability may actually increase.

.