Actually, Auditing is greatly required to establish reliability and determining the accuracy of accounting related activities in the case of complexity of accounting field of modern business.
Generally, a person reserves limited knowledge. If a business owner has no accounting knowledge or if a business organization becomes large in size...there is required to employ third party for keeping accounting books. Auditing has been grown in order to justify and get accuracy of that accounting book maintaining by third party.
The word "Auditing" has been derived from the Latin word "Audire". The Latin word "Audire" means "To listen". For this, The word "Auditing" means "To listen".
In the ancient era, Business owner justified his accounting book recorded by his employees. He employed an experienced and non-partial person who listened accounting books records from the mouth of the accountant. The experienced person justified the accuracy of prepared accounting books by listening. Thus, The word "Auditing" come into light.
Some experts define auditing as...
A. W Hanson said that "An audit in an examination of such records of establish their reliability and the reliability of statements drawn from there."
Mautz stated as "Auditing is concerned with the verification of accounting data for determining the accuracy and reliability of accounting statements and reports."
R. R. Comber said that "Audit is an independent examination of the financial books & records of some, person or persons responsible or accountable to a third party with a view of verifying the accountancy of statement prepared by or for the accounting party."
So, auditing is the process by which an experienced & non partial person or party operates an examination of accounting books carefully prepared by the organization's employees in order to get the accuracy, reliability & flawless in accounting books. Auditor can be appointed internal or external. It depends on the decision of business owner or company board.