Auditing and Economics

As is well known, accounting is concerned with the accumulation and presentation of data relating to
economic activity. Though the concept of income as put forward by economists is different as compared
to the accountants concept of income, still, there are lot of similar grounds on which the accounting has
flourished. From the auditing view point, the auditors are more concerned with Micro economics rather
than with the Macro economics. The knowledge of Macro economics should include the nature of
economic force that affect the firm, relationship of price, productivity and the role of Government and
Government regulations. Auditor is expected to be familiar with the overall economic environment in
which his client is operating.Auditing and Economics