OBJECTIVES OF AUDITING :

The objectives of auditing may be classified into two parts:
1. The primary objective
2. The secondary or incidental objective.

Primary Objective – The primary objective of the auditors is to report to the owners whether the balance sheet give a true and fair view of the company’s state of affairs and the correct figure of the profit or loss for the financial year.

Secondary objective – It is also called the incidental objective as it is incidental to the satisfaction of the main objective. The incidental objectives of auditing are:

(i) Detection and prevention of frauds, and

(ii) Detection and prevention of errors.

Detection of material frauds and errors as an incidental objective of independent financial auditing flows from the main objective of determining whether or not the financial statements give a true and fair view. The statement on auditing practices issued by the Institute of Chartered Accountants of India states, an auditor should bear in mind the possibility of the existence of frauds or errors in the accounts under audit since they may cause the financial position to be mis-stated. Fraud refers to intentional misrepresentation of financial information  with the intention to deceive. Frauds can take place in the form of manipulation of accounts, misappropriation of cash and misappropriation of goods. It is of great importance for the auditor to detect any frauds, and prevent their recurrence. Errors refer to unintentional mistake in the financial information arising on account of ignorance of accounting principles i.e. principle errors, or error arising out of negligence of accounting staff i.e. clerical errors.