Govt. Audit vs. Commercial Audit
Government Audit: The government offices, departments, under-taking registered as companies, are also subject to independent financial audit. Usually, a statutory auditor is appointed by the Central government on the advice of the Comptroller and Auditor General of Bangladesh, audits accounts of government companies. Governmental audits also include financial statement audits performed under Government Auditing Standards on entities such as states, local governments, not-for-profit organizations, institutions of higher education, and certain for-profit organizations.
Commercial Audit: A Commercial Audit can examine all of the commercial activities of an organization or just a particular part of the operation. It can involve looking at the products and services themselves, to analyzing the resource and infrastructure that are required to bring them to market. It looks at how customers have managed as well as the type of commercial offers that are available. It asks whether all of the potential opportunities have been identified and how the organization manages any associated risks. We undertake the statutory audit of many commercial businesses that require an audit for a variety of reasons including:
- they are a public company
- they meet the definition of a large company
- they are a small foreign-controlled company
- it is a requirement under their financing facilities.
The points of difference between government audit and commercial audits are given below.
Government Audit – The accounting system maintained by the government offices is known as government accounting.
- In charge of the Conduct of Audit: Audit and Accounts Department conducts the audit of the government department.
- Type of Audit: Government audits always a type of continuous audit because of the involvement of enormous spending and a huge number of transactions. An Auditor General Office audits the book of accounts kept under government accounting.
- Nature of Appointment of Auditors: Auditors are government employees. It is maintained by the government offices to know the position of public funds.
- Need for Preliminary Examination of Bills: Treasury officer always makes a preliminary examination of bills before making a payment on government account.
- Rules & Regulations: Government audit is subjected to the rules and regulations of the concerned department. It is strictly maintained by following the financial rules and provisions of government.
Commercial Audit – The accounting system maintained by business organizations is known as commercial accounting.
- In charge of the Conduct of Audit: External auditor appointed by the employer shall conduct the audit here.
- Type of Audit: In commercial concerns, mostly a periodical audit is conducted. A professional auditor can audit the books of accounts kept under commercial accounting.
- Nature of Appointment of Auditors: They are not the employees of the concerns whose accounts they audit. It is maintained by business organizations to know the profit or loss and the financial position of the business.
- Need for Preliminary Examination of Bills: Cashier has nothing to do with an audit or preliminary examination while making a payment of expenditure.
- Rules & Regulations: It is not so in the case of commercial audits. It is maintained by following the rules and principles of ‘Generally Accepted Accounting Principles’.