I have problem in understanding the difference of interim and final audit . my most focus is on the understanding of the interim audit/
To give u an overview, Audit is process that is done within 12 months period. That 12 months, the auditor does many procedures/steps to reach conclusion on the Financial statement and at last to give audit report to the shareholder.
Therefore to do that, as you can guess, its a long process and wont be a smart idea to start the audit at the end of the target year, say 31-Dec-2015 and give opinion immediately somewhere in Feb-2016 as there will be more test to carry out before the year end to gain evidence....so in this case, the auditor divides the 12 months in two sections; one starts before the year end, and that is what we call interim audit, in this period the auditor carries out some procedures mostly testing the controls and doing small limited substantive test, because the assumption is that controls are always there up to the end and will reduce time if they do the test anytime before the year end.......
The second period is what we call final audit and the auditor does many tests including testing whether controls are still effective after the interim and carrying out substantive testing including checking the number/figures in the FS(detailed testing) and carrying out analytical procedures to get a feel on where the trends are going on.
An interim audit is done usually three months before the year end due to time constraints. The auditors would attempt to perform some test of controls (Compliance tests), analytical procedures, and some limited substantive tests. These will enable then to better design audit procedures so that the audit is done efficiently and effectively. At the final audit the auditor would have known with some assurances the high risks areas identified during the interim audit. This will significantly reduce audit risk to an acceptably low level.
Interim audit is done mid-year to report half year results ie 6 mnths whereas final audit is done at year end ie 12 months period.