The technique of auditing we mean to say the methods of procedure adopted by an auditor in checking the accounts. This technique of auditing is different with different auditors according to their experience.
If his experience shows that the technique or the procedure adopted by him in the past was not satisfactory, he may adopt a different technique, but the principles of auditing will remain the same and he cannot make any change in them.
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- Allowance method
The allowance method of accounting for bad debts involves estimating uncollectible accounts at eh end of each period. This provides better matching on the income statement.
- Correcting entries
Correcting entries refer to entries to correct errors made in recording transactions. Unfortunately, errors may occur in the recording process.
- Error of commission
When a transaction has been recorded but has been wrongly entered in the books of original entry or in the ledger, error of
- Indirect labor
Indirect labor refers to the work of factory employees that has no physical association with the finished product, or for which it is impractical to trace costs to the goods produced.
- Book value of common stock
Book value of common stock is the amount per share that stockholders would theoretically receive if a company’s assets were sold on the balance sheet date. (Found by dividing stockholders equity by the number of common stock shares outstanding.
- Revenue expenditure
Revenue expenditure is an expenditure which is periodically incurred to maintain the revenue the revenue-earning capacity of the business,
- Reversing entry
Reversing entry is an entry, made at the beginning of the next accounting period that is the exact opposite of the adjusting entry made in the previous period.