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statements play supportive role while taking decisions. It also helps for vertical
and horizontal comparison.
6. Acts as evidence: Audited accounts are considered more reliable and formal
evidence in the court of law for settlement of any dispute.
7. Helps to increase goodwill: Regular auditing and audited financial statements
are considered as authorized documents to obtain loan from financial institutions.
The organizations whose financial statements are regularly audited, earn faith
and increase goodwill in society.

Types of audit

Internal audit:

An internal audit is a systemic examination of the books, accounts and vouchers
of organization, by the employee of the business itself. It is performed within an
organization to measure its strengths and weaknesses against its own procedures or
methods. The staff may or may not have professional qualification for the auditing of
accounts. The staff is permanent in nature and helps the business in early detection
of errors and frauds. The main function of internal audit is to ensure true result of
financial transaction to take into confidence the people and to correct the errors
and misuse in time. It helps to make efficient the financial administration through
the detection and corrections of frauds and errors. Internal auditing, also known as
continuous auditing, makes the grounds for final audit.
Under new accounting system of government of Nepal, internal auditing is
responsibility of District Treasury and Comptroller’s Office. District Treasury and
Comptroller’s Office was established in all 75 districts during the fiscal year 2038/39
B.S. After that responsibility of internal audit of government offices is being carried
out by the office.

Final audit
Final audit is systematic examination of financial statements in terms of efficiency,
effectiveness, reliability, regularity and economy by an independent and professional
auditor. Final audit is conducted after closing the accounting period of firms and
organizations and carried on until it is completed. Government accounts are audited
by the office of the auditor general. Besides, office of the auditor general is responsible
for making the final audit of constitutional body and corporations. Thus, the final audit
is the act of checking and examining the books of account at the end of fiscal year. All
types of organizations consisting of business, social, NGO/INGO, government office,

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