The kind of audit is conducted generally between two annual audit
A. Internal audit
B. Interim audit
C. Final audit
D. Continuous audit
Answer: Interim audit
An interim audit is a type of audit performed half way through the fiscal year. It is an audit that checks the financial records of a company as they are being prepared, rather than after preparation. The purpose of an interim audit is to ensure that mistakes and irregularities are caught during the accounting process, so that they can be quickly corrected before the fiscal year ends.
An interim audit requires time and money, and therefore should not be performed lightly. Companies often have a policy in place for when to perform interim audits, but the decision is ultimately up to management.
The decision to perform an interim audit may be made when management believes that there is a risk of significant error in their financial records. For example, if a company employs new accountants, if there is turnover in accounting management, or if an audit from the previous year turned up errors, an interim audit might be called for.
An interim audit may also be performed when circumstances change during the fiscal year. For example, if a company experiences a major loss due to theft or fraud, this should be reflected in its financial records for that period. An interim audit can verify that these records were properly updated or help catch any errors from adjustments made due to this loss.