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Auditing

8. Introduction
In English audit means examination of accounts. It is derived from Latin word
‘audire’. Its meaning is to hear. At the end of fourteenth century, auditors were to read
the status of accounting information in front of the kings or the rulers of that time and in
the later days the ‘audire’ turned as audit.
In the ancient days, the works of the auditors were mainly to check the arithmetical
accuracy. In the modem period, the auditors not only check the arithmetical accuracy but
also see whether the rules have been followed or not, whether the entries have been made
according to companies policies or not and whether complete and full accounting have
been maintained or not.
A.W. Hanson has defined auditing as “An auditing is an examination of such records to
establish their reliability and reliability of statements drawn from them.”
The United Nations has given a comprehensive definition through the book “Government
Auditing in Developing Country’, that auditing refers to the systematic, managed and objective
oriented professional examination of the books to improve that if any inefficiencies, undue expenses;
and mismanagement occur in the financial and administrative works of government office and
programs.”
In the word of L.R. Dickse, “Auditor is an examination of the accounting records under taken
with a view of establishing whether they correctly and completely reflect the transactions to which
they purpose to relate.”
In conclusion, it is an examination of the books of accounting data to ascertain correctness,
reliability, efficiency, etc. depending upon the financial data and statements.

Key Point Auditing is the systematic examination, review and verification of the
accounting records or books for the, accuracy and reliability of accounting
statements and reports.

9. Development of Auditing In Nepal

The Office of the Auditor General (OAG) was established with the appointment of
the first Auditor General as per the Constitution of the Kingdom of Nepal, 2015 B.S. Prior
to establishment of Office of the Auditor General, the institution named Kumari Chowk
Adda used to review the government accounts. It is assumed that Kumari Chowk
Adda was established in the year 6 Baishakh, 1828 B.S. with the aim of strengthening
th
administrative system after the unification of Nepal. It is also anticipated that there was
also existence of audit institution prior to unification. Since the fiscal year 2031/32, some
new forms were brought into use on the recommendation of Auditor General.
After the historical change of 2046, Constitution of 2047 and Auditing Act 2048 brought
changes in the field of auditing system of government office. According to Company
Act 2063, every business office should audit the accounts and present the audit report in
Annual General Meeting and Company Registrar’s Office.

194 Aakar’s Office Practice and Accountancy - 10 Government Accounting System 195