First Audit means an audit done for the first time of an enterprise, whether it is a sole-trade organization, a partnership firm or a joint stock company or any association of persons. It means that the affairs of such an enterprise have not been audited before.

In the 'First Audit,' the auditor has to take many precautions. He has to be very careful before the commencement of the audit, as neither he gets the previous year's audit report, nor the employees of that enterprise have any experience of getting the account books and the relevant material/documents audited. Therefore, the responsibility increases manifold. 

The auditor should take all those precautions he has to do before the commencement of an audit i.e., he should take the following steps for the First Audit:

1. He should collect all important information from his client.

2. He should know the object of the audit.

3. He should have knowledge of the accounting system practiced in the enterprise.

4. He should make a thorough study of the internal check system practiced by the enterprise.

5. He should prepare a list of books and their keepers.

6. He should have knowledge of other technical aspects from his client i.e., the rules and bye-laws, or memorandum of association and the articles of association of the company.

7. He should prepare an audit programme and fix the date of commencement of the audit work.

8. He should ask his client:

To get the account books ready for audit purposes and get the totals of all important accounts, a trial balance, and final accounts completed.

To get the vouchers arranged serially and date-wise.

To get a list of the bad and doubtful debts prepared.

To get a list prepared of outstanding expenses, prepaid expenses, accrued income, and income received in advance.

To get the list of capital expenses, preliminary expenses, and deferred revenue expenses.

To get the list of debtors, creditors, investments, stock in hand, etc.

To get the list of all the fixed assets of the enterprise, names of branches and other offices, etc.

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