Periodical Audit is also known as Annual Audit or Final Audit or Complete Audit. This type of Audit is usually done at the end of the year after the preparation of the Final Accounts. The Auditor does the audit work till the time all the account books and statements prepared are verified and his staff. This type is examined by him or an Audit is done only once a year. Such an audit is most suitable and satisfactory as well as practical for small organizations. However, extensive examination of Account Books is not possible under such an audit.

"Periodical Audit is that which starts at the end of the financial year concerning to the Audit. It does not have the advantages of Continuous Audit."

Lawrence R. Dicksee,


"Periodical Audit means such Audit which does not start before the close of the financial year and continues till the   time the audit work is completed."

Walter W. Bigg,


Periodical Audit has the following disadvantages:

(1) Lack of Deep Checking-

The commercial organization writes the account books throughout the year and prepares the final accounts on its basis only at the end of the year. Audit work takes place only at the end of the year within a limited time and an Auditor thereby cannot make an extensive examination.

(2) Slackness in Moral Duty-

This type of audit work does not leave any moral impact upon the employees because they know that their work is to be audited at the end of the year and that too after several months. This makes them careless. It is also possible that by the time audit takes place they leave the organization for good.

(3) Difficulty in Detecting Errors and Frauds-

The audit work starts only after the end of the year. The Auditor feels difficulty in detecting errors and fraud at this stage. Especially when errors and frauds are intentionally done. Intentional errors and frauds are committed by the staff of the commercial organization throughout the year, and therefore, it is not an easy task for the auditor to detect them within the limited time at his disposal during the course of such an audit.

(4) Delay in Audit Report-

Periodical Audit is done only at the end of the year- The Auditor takes his own time in the preparation and submission of the audit report. The management and the shareholders of the commercial organizations thus have to wait for a long for getting the audit report.

(5) Inconvenient for Big Trading or Manufacturing Business Institutions-

In large-scale commercial and/or manufacturing organizations the number of transactions taking place is quite large. The production is done on a massive scale and the sales turnover is also quite high. In such cases, Periodical Audit is not suitable for such organizations. Continuous Audit is the best choice for them.

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