## Nature of Auditing — Interdisciplinary Subject

Auditing is not an isolated discipline. It draws on knowledge from multiple fields simultaneously. An auditor encounters all of the following while doing their work:

#	Subject	Why Relevant to Audit
1	Accounts	Reading and understanding financial records
2	Law	Company law, contract law, tax law, regulations
3	Financial Management	Ratio analysis, fund flows, capital structure
4	Economics	Market conditions, industry trends, NRV assessments
5	Costing & Production	Verifying cost records, manufacturing data
6	Human Behaviour	Understanding management motives, staff conduct
7	Statistics & Mathematics	Sampling methods, analytical procedures

> This interdisciplinary nature means a good auditor must have a broad, multi-domain knowledge base — not just accounting skills.

Worked example

### Example 1

When auditing a manufacturing company's inventory, the auditor uses Costing knowledge to verify cost computations, Economics to assess Net Realisable Value (market price), and Statistics to design an appropriate sample of inventory items to physically verify.

### Example 2

An auditor suspects management is concealing related-party transactions. Knowledge of Human Behaviour helps the auditor interpret evasive responses during inquiry, while Law knowledge guides the auditor on the disclosure requirements under Companies Act / Ind AS.

⚠️ Common exam mistakes

Listing only Accounts or Accounts and Law as the relevant disciplines — the question may ask for all 7, and only listing 2-3 will lose marks.
Treating auditing as purely a mechanical checking exercise — its interdisciplinary nature means it requires professional judgment across multiple domains.

Reference:

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