What is Special Audit?

The meaning of a special audit is the audit that is conducted to probe the specific organization's activities. This type of audit is initiated by a third party most of the time. The third party can be a tax authority or a government agency. Any other relevant entity, such as the internal authorities, can also conduct the special audit. 

A few examples of the special audits are fraud audits, cost audits, royalty audits, control audits, and compensation audits. 

Need for Special Audit Report

If any abnormal behaviour is suspected within the organization, then the need for a special audit arises. If the laws and regulations in the organisation have been overlooked in the finances or financial management, then the authorities are called for a special purpose audit. 

These special audits are not limited only to cases of fraud. They can also be conducted for other violations in the organisation. They can be related to authorizations, duties, responsibilities of senior management, or internal control procedures. Similarly, the special audits are also related to bankruptcy or corporate reorganization. 

Applicability of Special Report 

As you know, the special audits are normally conducted outside of routine with a special purpose. These special purposes are generally different in nature, and the overall outcomes are based on these audits. 

• Construction Audit: This audit analyzes the total cost spent on a construction project. It also makes a report about the actual amount paid to the suppliers, contractors, etc.  
• Compliance Audit: It is conducted to check whether the procedures and policies are being followed. It also checks if the regulatory or internal standards are followed properly.
• Investigate Audit: This audit is conducted when a suspicious event or incident occurs within the company. And if there is a need to find the details about it. 
• Information Systems Audit: This audit is performed when there is a need to review all the controls of software development. It also provides a review of the controls related to software development. It processes the data and all other access to computer systems.