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DISADVANTAGES

1. Frauds by management

Auditing fails to check planned frauds. The management can play tricks to manipulate the accounts in order to conceal their inefficiencies. The audited accounts could not show the true view.

2. Wrong certificate

Auditing is based on many certificates taken from management and other persons. Auditing may fail to provide the desired results. When certificates provides wrong information.

3. Misleading clarification

Auditing fails to disclose correct information. The management may not provide correct clarification. The auditor is bound to present his report even of the clarification is not true.

4. No true picture

The auditing does not present true picture. Auditing fails to disclose true picture when figures have been manipulated.

5. No correct view

Auditing fails to present correct view. There are limitations of accounting so figures are not facts. These figures are based on opinion. Thus auditing is unable to disclose correct view.

6. No suggestion

Auditing is not concerned with the management policies. The auditor cannot guide management for better use of capital. He is unable to suggest what should have been done.

7. Absence of honesty

Honesty and independence are highly essential traits. The auditor must certify what is true. The absence of honesty and independence means failure of audit purpose.

8. Bias of auditor

The auditing fails to present fair view due to bias of an auditor. It is the quality of an auditor that he should be independent. The bias auditing fails to help many people.

9. High cost

The audit work is completed without cost. The cost of audit should not exceed of errors and frauds. Auditing fails to serve million of business entities.

10. Past action

Auditing is nothing more than checking of past activities. It is not concerned with present or future. The audit fees increase the cost of business. Such cost does not help to improve market standing of enterprises.

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Wiki User

12y ago

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