Assurance vs Audit

Routine checking in auditing refers to the process of systematically examining and verifying the day-to-day transactions and operations of an organization to ensure their accuracy and compliance with established accounting principles and policies. This type of checking is a fundamental aspect of the auditing process, aiming to detect any irregularities, errors, or fraudulent activities that might have occurred within the financial statements and records of the entity being audited.

Routine checking involves scrutinizing financial documents such as invoices, receipts, bank statements, and other transaction records. Auditors perform this task to confirm that the entries made in the books of accounts accurately represent the transactions they purport to record. It is a detailed and comprehensive review that covers a wide range of transactions over a specific period.

The primary goal of routine checking is to ensure the integrity of financial reporting and maintain the trust of shareholders, creditors, and other stakeholders in the financial health and operational effectiveness of the organization. It helps in reinforcing the reliability of financial statements, which is crucial for decision-making processes by management, investors, and other interested parties.

 Every business maintains some of the other sorts of books of accounts and these are examined on a daily basis.  The daily examination of these books and accounts is known as routine checking.  Routine checking means checking of arithmetical accuracy of books of original entry and ledgers with a view to detect frauds and errors.  Routine checking establishes the arithmetical accuracy of the accounts.

What Does Routine Checking Include?

 Routine checking includes the following tasks. 

1. Checking the various calculations such as totals, subtotals, balances carried forward, etc

2. Examining the entries in the ledger with those in the books of original entry

 3. Checking the balances of various accounts

 4. Checking the balances carried from the  ledger into the Trial Balance

Objects of Routine Checking

1. Establishing the arithmetical accuracy of the books of accounts

 2. To check whether the entries in the primary books of accounts have been posted correctly, and whether the accounts have been balanced correctly or not.

 3. Through  The use of special symbols ensuring that the figures are not altered after the audit.  During routine checking a number of symbols are used, hence some people also refer to it as tick work or check making.  The following precautions should be exercised in relation to the use of symbols:

            (i) The symbol should be small and clear.  )

              (ii) Different symbols should be used for different tasks

                (iii) The symbols should be put in a color different from that in which the accounts are being   maintained

                (iv) The use of the symbols should be kept secret. 

               (v) It is better to change the color of the symbols from year to year.  Where the symbol is marked is also very important.  Normally for the checking of posting the symbol is placed to the left side of the amount showing that the same has been checked and, once the amount has been vouched the symbol is placed to its right.  Once the totals are checked the symbol is placed below it.  It is very important that the placement of symbols should be decided before hand. 

While auditing these symbols should always be kept in mind in the same manner, as we keep the road while walking, words while talking, and our pockets while purchasing.  In all the above situations, a small carelessness can produce a large number of problems and complexities. 

Advantages of Routine Checking 

Checking is simple work and can be done by a person possessing ordinary qualifications, Even though it is simple.  It is very important since it forms the basis of the Auditor's Report.  Routine Checking ensures that there is no arithmetical error in the accounts and that the posting has been done correctly.  Through it, simple frauds can be detected easily, and even if the amounts have been altered they can be easily detected through the use of symbols. 

In brief, the following are the main advantages of routine checking

(1)  Sample: 

Routine checking is very simple and a person possessing ordinary qualifications can do it.  Hence, such checking is usually done by the lower-level staff.

 (2) Knowledge of Arithmetical Accuracy: 

Through routine checking arithmetical inaccuracies in the books of original entry can be easily detected

(3) Knowledge of Accuracy of Postings: 

Through routine checking, the postings in the ledger accounts are also checked and any error in the same  can be easily detected

(4) Detection of Errors and Frauds:

 Due to the special emphasis on the examination of the primary books of accounts and the ledger, errors, and frauds can be detected easily.  Even then it is not possible to detect errors of principle through routine checking

(5) Change in Figures come to Light: 

A number of symbols are used in routine checking and the meaning of all these symbols is confidential, Hence, it is possible to alter  the figures after the audit Even then if the figures have been altered they can be detected easily

 (6) Helpful in Checking of Final Accounts: 

With the thorough examination of the books of original entry and ledger, the examination of the books of original entry and  ledger, the examination of Trading and Profit and Loss Account and Balance Sheet becomes much easier.  Hence, routine checking is the basis for the examination of final accounts.

 Disadvantages of Routine Checking

Even though routine checking has many advantages, it has a few disadvantages also which are as follows :

( 1 ) Haste and Carelessness in Work :

 Since the working of routine checking is often done hastily and in a careless manner, errors often remain undetected, which makes the final examination worthless.

 ( 2 ) Work becomes Mechanical :

This checking is totally mechanical and hence the work becomes very monotonous. This work is usually done by unqualified employees, who often do not understand their responsibilities fully.

 ( 3 ) Non - disclosure of Errors of Principle :

 Since routine checking is done by employees possessing ordinary qualifications they are not able to detect errors of principle and compensatory errors and hence such errors often go undetected.

( 4 ) Planned Frauds are not Detected :

Routine checking cannot detect planned and systematic frauds and hence only small and inconsequential errors are detected.

 ( 5 ) Fall in the Quality of Work :

Employees often consider such work as a mere formality and hence do it hastily and carelessly, and hence the desired results of such checking cannot be achieved.