Auditing Limitations


Though auditing could be a terribly helpful technique, its following limitations should be kept in mind:

  1. Not helpful for tiny Business: In the small business, the owner himself is the manager and controller. His business transactions area unit restricted and then he will write his own accounts. Hence, for him, auditing is of no use.
  2. Accuracy: even audited accounts can’t guarantee the whole correctness of accounts. In terribly business sector units, it’s unacceptable to visualize every minute dealing.
  3. Risk of Errors and Frauds: The auditor must be careful in auditing accounts. thus naturally he cannot audit accounts with the idea that there’s some error or fraud. once workers to commit fraud, even the auditor cannot notice it.
  4. Degree of correctness: All data and rationalization not Received whereas auditing accounts, the auditor must evoke every data and rationalization from the consumer. however, all of them don’t seem to be received from all clients and then the audit cannot along return guarantee correctness.
  5. Dependency: Dependence on Expert’s Opinions throughout the audit work, the auditor must rely upon experts’ certificates in several respects. e.g. the price of closing stock, price of machinery, etc. However such certificates don’t seem to be perpetually true.

  6. Post-mortem Examination of Figures: AN audit is just a post-mortem examination of figures. It means that the accounts area unit audited solely once events have taken place. Thus is not of abundant use.
  7. Auditor’s Prejudice: usually, the auditor’s prejudice in his audit work. Even though he should stay neutral, but the external influence for personal benefits and fraud are often incurred.
  8. Influence of social control Personnel: it’s the auditor’s duty to safeguard the interest of shareholders. however in follow, he must work with the social control personnel.
  9. Disturbance in Regular Work: Throughout the audit work, the regular business routine is disturbed. The auditor oftentimes asks for explanations of data, vouchers, statements, etc. This results in a waste of your time of the workers and it’ll cause reduced potency of the workers.
  10. Cost factor: The audit must be entrusted to the professional auditor World Health Organization could be a controller and naturally, his fees area unit sure to be high, thus tiny business units cannot afford it. In such cases, the advantages of the audit are but the prices concerned.


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