Auditing question

1. It depends on the size of the entity in question: If the size is too large, auditors have to rely on the internal control of the client's system.
2. Resource allocation: since most of the companies have their year end in March and December, manpower is tight during the season. If part of the audit work can be performed outside peak season, that can increase efficiency of the audit.
3. Statistical assurance: If the operating system is quite complex, statistical analysis will have to be adopted. Normally, we assume the whole system to be applied throughout the year and any biased testing is not desirable from an audit viewpoint.

A simple answer is you can know the accuracy and completeness of the accounting records during the year. And, the internal control system is effective througout the financial year. Hence, the financial statments so prepared is much reliable as risks on it is much lesser. For example, if you just check the year ending vouchers and records, there may be some transactions made during the year which were not proper and which you could discover it on a test basis or on a random sampling selection basis. This is also an issues of statistical assurance of the systems.