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Unlike a full audit that checks everything in a business, a limited audit is made for smaller checkups and typically is easier to perform. While a full audit is typically done once a year, a limited audit may occur several times during the course of a year. The purpose of this audit is to limit the overall work and to make it easier for a business to operate without interruption, so the auditor will typically isolate his or her work to one account or purpose. Another thing that may be limited during such an audit is the amount of years checked, in terms of accounting information. If the aspect of the business being audited is broad, then the auditor typically will just check the most essential areas instead of every detail.
A full audit generally is performed once a year, and the auditor will check every aspect of the business in detail. It takes substantially less time, so a limited audit can be scheduled to occur several times a year. The business may or may not be told about the audit, depending on what is being checked and the auditor's preference. This commonly occurs each quarter but may be more or less and usually is scheduled at random.
With a limited audit, only a portion of the business is typically checked. For example, instead of going through an entire store and every account, only one account may be audited. This also can be done for just one purpose. Instead of checking on the business’s inventory numbers, taxes, money coming in and out, and potential fraud or ledger manipulation, the auditor may just quickly check inventory numbers to ensure they are accurate, while leaving the other areas for the next audit, whether limited or full.
During a full audit, especially with accounts, an auditor typically will check several years of financial information to ensure everything is correct. In this aspect, a limited audit will scale back the amount of years that are searched. Instead of several years, just one or two will be checked for accuracy, and it may be with one or several accounts.
A limited audit is sometimes concerned with a broad area of a business, such as the entire business’s inventory. This typically is much more work than a limited audit is supposed to encompass, so the work usually will be scaled back so only important items are audited. This may include big sellers or areas the hold most of the business’s inventory.