Interim Audit refers to an audit conducted on a particular date within an accounting period. In large-scale business concern, the performance may be checked for a particular part of the year.
Advantages of Interim Audit
- Interim audit is less costly than a continuous audit. This audit is very convenient for the management because they invite the audit staff when their business activity is low.
- Interim audit is good where the publication of the interim figure is necessary. In case of interim audit auditor’s suggestions can be quickly implemented.
- This audit is very suitable for the large and dynamic type of business organizations.
- Then a final audit can be completed very soon if there has been an interim audit. A final audit can be conducted in a short time because of an interim audit.
- Errors and frauds can be detected more quickly during the final audit. It helps to correct such errors and frauds in time. The time between compiling and checking accounts is very short. The location of fraud is possible, as sufficient time is not given to employees.
- There is moral check on the staff of the client as the accounts are checked, say after three or six months in the interim audit. It also helps to eliminate mistakes and frauds. There is a moral check on each employee to complete his record as per rules.
- The interim audit is useful for investors. They can rely on audited accounts for making an investment. The investors can buy and sell shares on the basis of the interim audit.
- The management can easily prepare the accounts for the proposed interim dividend. Interim audit is very useful to declare this dividend.
- The benefit of the interim audit is that the accounting record is kept up to date. The accounting staffs have a duty to complete their work for an interim audit. Thus delay in accounts is not possible.
- When the staff of the client knows that at any time during the year accounts are checked for the interim period then they will not commit any fraud.
- When any partner dies then this audit is very helpful in determining the position of assets and liabilities.
- Goods and services prices are fixed by the management and cost is calculated by adding the profit. The selling price is fixed and for this purpose interim audit is desirable.