Disadvantages of Final Audit

Disadvantages of Final Audit

1. Shortage of Time
The auditor has many clients and their financial year ends on the same date. So it becomes very difficult for the auditor to finish the work in time. It is a disadvantages of final audit.
2. Delay in Report
The decisions of the business are made on the basis of the audit report. But this report is made one or two months late. So there is also delay in the making of important decisions.
3. Complete Checking Not Possible
It is very difficult for the auditor to check the each and every entry made in the books of account. He applies only test to save the time. So many mistakes remain untouched.
4. May Misrepresent
There may be also a chance that audit report may not represent the correctness of accounts because each and every transaction is not checked.
5. No Moral Influence
In this audit there is less pressure on the accounting staff. The audit staff comes once in the year. So the employees are not altering in their work.
6. Late Corrections
In this audit the errors are locate at the end of the accounting period. Some way, the corrections of errors are also late. And the entire producer takes more time.
7. Audit Report
The demerit of final audit is that report is not presented in time. It may be submitted one or two months late. The decisions are to be made on the basis of audited accounts.
8. Planned Frauds
In this type of audit, the management has a whole year to think and decide how to make the frauds. So they commit a planned fraud, which is very difficult to find by the auditor.
9. Previous Year Data
Past data is provided to the auditor for audit in this type of business. The errors and frauds are also previous they have no concern with present or future.
10. Thorough Checking
In the final audit there may not be thorough checking. The auditor may select the sampling. In this way the errors and frauds are not located and the purpose of audit dies.
11. Planning for Future
In the final audit the future planning is not prepared in time because audit work start when the accounting work ends. The audit work is completed late and the projected financial statements are also completed late.
12. Delay in Accounting
For the accounting staff it is not possible to prepare the financial accounts just at the end of the year. Due to audit there is delay in finalizing the accounting matters.
13. Monthly Report
If in a business monthly or quarterly report are required. In this type of business the final audit cannot be conducted.
14. Proper Attention
The auditor cannot pay the proper attention towards the audit because he is bound by the fixed time.
15. Proper Decision
As he is bound by the time period he cannot judge the weakness of the business properly and cannot give the proper decisions to workers.
16. Interim Dividend
The business, which conducts the final audit, it is very difficult for him to declare the interim dividend.