The interim audit tasks are conducted in order to compress the period needed to complete the final audit. It is part of audit work where audit testing is performed on interim financial statements. It refers to an audit conducted on a particular date within an accounting period. It may be monthly quarterly or half-yearly. For example, having an interim audit will help the year-end audit to finish earlier as less evidence will be collected.
In order to know the reliable trading results of the business for a part of the year, the proprietor may arrange interim audits monthly, quarterly or half-yearly. It is also called Optional Audit or Temporary Audit. Medium and Large Size business organization Interim audit is best suited for medium and large scale business organization as such organization pay interim dividend and can afford such audit
Objectives of Interim Audit
The investment decisions are taken around the year. Investors don’t wait for the annual reports that are declared at the end of the fiscal year.
- To know the profit or loss of the interim period.
- To reduce audit works. It works required the auditor to perform testing.
- To distribute interim dividends.
- To increase audit revenue. This happens when there is requested from the client asking auditors to issue an interim audit opinion.
- To get a loan on the basis of an interim account.
- To get information about the financial position of the interim period. Audit’s clients sometimes required to publish their interim financial statements.