Difference Between Search & Browse Methods in Odoo 17
319155985-project-report-on-a-CA-firm (1).pdf
1. Major Project Report
ON
THE STUDY OF AUDITING FUNCTIONS WITH
REFERENCE TO NEOSIS ADVISORY PVT. LTD.
Submitted in partial fulfillment of requirement of Bachelor of
Business Administration (B.B.A) General
BBA VTH SEMESTER (MORNING) (B)
BATCH 2012-2015
Submitted to: Submitted by:
Mrs. Prabhjot Kaur Neela Kohli
Designation 11514101712
JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL
KALKAJI
2. ACKNOWLEDGEMENTS
A lot of effort has gone into this training report. My thanks are due to many
people with whom I have been closely associated.
I would like all those who have contributed in completing this project. First of all, I
would like to send my sincere thanks to MRS. PRABHJOT KAUR for her helpful
hand in the completion of my project.
I would like to thank my entire beloved family & friends for providing me monetary
as well as non – monetary support, as and when required, without which this
project would not have completed on time. Their trust and patience is now
coming out in form of this thesis.
3. STUDENT’S UNDERTAKING
I hereby certify that this is my original work and it has never been submitted
elsewhere.
By: Neela Kohli
11514101712
4. CONTENTS
S. No Description Page No.
1. List of Tables
2. List of Figures
3. Executive Summary
4. Certificate of completion
5. Introduction to Topic
6. Objectives
7. Literature review
8. Research Methodology
9. Analysis & Interpretation
10. Findings & Inferences
11. Limitations
12. Recommendations and Conclusion
13. Appendices
14. Bibliography
LIST OF TABLES
5. LIST OF TABLES
S. No Table title Page No.
1.
EXECUTIVE SUMMARY
The general definition of an audit is a planned and documented activity
performed by qualified personnel to determine by investigation, examination,
6. or evaluation of objective evidence, the adequacy and compliance with
established procedures, or applicable documents, and the effectiveness of
implementation. The term may refer to audits in accounting, internal controls,
quality management, project management, water management, and energy
conservation.
Auditing is defined as a systematic and independent examination of data,
statements, records, operations and performances (financial or otherwise) of
an enterprise for a stated purpose. In any auditing the auditor perceives and
recognizes the propositions before him for examination, collects evidence,
evaluates the same and on this basis formulates his judgment which is
communicated through his audit report. The purpose is then to give an opinion
on the adequacy of controls (financial and otherwise) within an environment
they audit, to evaluate and improve the effectiveness of risk management,
control, and governance processes.
7. CERTIFICATE OF COMPLETION
This is to certify that Neela Kohli, pursuing V semester (B) (M) from Jagannath
International Management School, Kalkaji, has completed her project on the topic
“Study on Auditing Functions with reference to NEOSIS ADVISORY PVT LTD.”
under my guidance. Her work is appreciable.
Project guide:
Mrs. Prabhjot Kaur
9. The general definition of an audit is a planned and documented activity
performed by qualified personnel to determine by investigation, examination, or
evaluation of objective evidence, the adequacy and compliance with established
procedures, or applicable documents, and the effectiveness of
implementation. The term may refer to audits in accounting, internal controls,
quality management, project management, water management, and energy
conservation.
Auditing is defined as a systematic and independent examination of data,
statements, records, operations and performances (financial or otherwise) of an
enterprise for a stated purpose. In any auditing the auditor perceives and
recognizes the propositions before him for examination, collects evidence,
evaluates the same and on this basis formulates his judgment which is
communicated through his audit report. The purpose is then to give an opinion on
the adequacy of controls (financial and otherwise) within an environment they
audit, to evaluate and improve the effectiveness of risk management, control,
and governance processes.
A commonly used definition for internal audit is:
‘An independent, objective assurance and consulting activity designed to add
value and improve an organisation’s operations. It helps an organisation
accomplish its objectives by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, control and
governance processes’.
This definition recognises two roles for internal audit:
• to provide an independent assurance service to the board, audit committee and
management, focusing on reviewing the effectiveness of the governance, risk
management and control processes that management has put into place.
• to provide advice to management on governance risks and controls, for
example, the controls that will be needed when undertaking new business
ventures.
Professional guidance is available from a number of sources. Building on the
definition above, the Institute of Internal Auditors (IIA) has issued professional
10. standards for both assurance and consulting work. Public sector organisations
are likely to follow internal auditing standards and guidance set by HM Treasury
and other public sector related bodies such as the Chartered Institute of Public
Finance and Accountancy (CIPFA).
Internal audit
Staffing internal audit is a joint exercise that includes input from the audit
committee and management. Several factors — such as an organization’s size,
complexity, level of risk and geographic diversity — can infl uence decisions
regarding the level of internal audit certifi cation that may be desired.
Selection criteria
Audit committees and management might consider the following factors in staffi
ng an internal audit function:
• A strong leader — Internal audit leaders (often called chief audit executives or
directors of internal audit) must not be afraid to bring potential problems to light.
• Reporting relationships — Regardless of its defi ned reporting relationship to
management and the board,1 internal audit should have frequent, open and
direct lines of communication with the audit committee, and the freedom to
address meaningful organizational risks.
• Need for specialists to deal with complex or diffi cult transactions.
• Geographic diversity — Organizations with wide geographic reach may
benefit from having internal audit personnel located near significant operations.
• Form of compensation fosters appropriate focus on audit quality.
• Objectivity or “independence” — Internal auditors should be familiar with the
subject matter, but should not be so closely tied to the area that their neutrality is
impaired.
Audit committee considerations
To ensure that the organizational framework for the internal auditing function is
comprehensive and balanced, the audit committee should consider the following
11. three areas.
Internal audit philosophy
Corporate accountability and governance necessitate an ongoing appraisal of the
entity’s auditing philosophy. Some internal audit functions focus exclusively or
primarily on operations, while others extend their focus to fi nancial reporting.
The audit committee and management should:
• understand and agree with the operating philosophy, and
• be confi dent that internal audit has appropriately skilled resources to execute
on the chosen philosophy.
Internal audit independence
Appropriate levels of independence enable internal audit to design and execute
audit procedures in all necessary areas and fully support findings and
recommendations to management and the audit committee or the full board.
COSO’s Guidance on Monitoring Internal Control Systems contains some helpful
direction regarding the broad concept of objectivity.
Objectivity refers to the extent to which evaluators and information sources can
be expected to perform an evaluation or provide information with no concern
about possible personal consequences and no vested interest in manipulating
the results for personal benefit or self-preservation. Personal integrity is a
primary consideration in assessing objectivity, but other, more easily observed
factors include compensation incentives, reporting responsibilities, personal
relationships and the degree to which individuals might be otherwise affected by
the results of monitoring.
Structure and logistics
Organizations, depending largely on their nature, size and complexity, have
different internal auditing needs. The audit committee should review the plans
and budgets of the internal auditors in relation to the entity’s auditing needs and
potential auditing benefits.
12. Equally important, the committee should review the organization chart of the
internal auditing function to determine that it is balanced in accordance with the
audit plan. An illustrative organization chart shows how the internal audit function
of a multinational enterprise might be organized on a centralized basis.
Monitoring the internal audit function
The audit committee’s routine oversight of internal audit is beneficial for the
following reasons. First, it enhances the audit staff’s independence and
strengthens its image in the corporate structure. Second, the audit committee
can help coordinate internal and external audit activity, thus improving the
efficiency of both. Third, an effective internal audit function assists the audit
committee in discharging its responsibilities in light of its limited time and
oversight capacity.
13. Appraising the quality of internal auditing staff
Chief audit executives (CAEs) should be able to articulate to the audit committee
how they meet the standards set forth by the IIA.4 Criteria for which the audit
committee should look include the following:
• Proficiency
• Due professional care
• Continuing professional development
• Internal and external quality assessments
• Reporting on the quality assurance and improvement program
The audit committee also should inquire of the independent auditor regarding the
quality of internal auditing personnel in relation to:
• the professional qualifi cations and educational backgrounds of the staff,
• the use of professional training and development programs for the corporate
audit staff, and
• the performance appraisal and evaluation system.
Finally, while each audit committee may develop its own approach to monitoring
the activities of the internal audit function, the following summary thoughts should
be helpful. In general audit committees should:
1. assist in the overall internal auditing policy determination and approve such
policies to ensure that the staff has authority commensurate with its
responsibilities;
2. review the scope of the internal and external auditing plans in order to
maximize the resources allocated to the audit function and minimize the outside
auditing fees;
3. review copies of the internal auditing reports and critically evaluate findings,
recommendations, management’s response and courses of action taken, and
14. review the disposition of the recommendations in the independent auditor’s
management letter;
4. review and appraise the staff’s organization regarding its auditing philosophy,
independence and logistical operations;
5. assess the quality of the auditing personnel and training to ensure that the
internal auditing function is adequately staffed;
6. assure the CAE that the audit committee supports his function in the corporate
structure and the director has access to the committee and the functional areas
within the entity, and obtain assurance that the staff is receiving the proper
cooperation from management; and
7. determine the need for specialists, such as in complex areas of accounting or
evaluation of computer security.
Status of internal audit
Where there is an internal audit function, its status and remit derives from the
needs of the organisation and should be set at the top of the organisation, i.e. by
the board and the audit committee. There is no single model for internal audit
and each organisation will determine what is appropriate to suit its requirements.
In general, internal audit could, if agreed by the audit committee, seek assurance
that:
• The organisation has a formal governance process which is operating as
intended: values and goals are established and communicated, the
accomplishment of goals is monitored, accountability is ensured and values are
preserved.
• Significant risks within the organisation are being managed and controlled to an
acceptable level as determined by the board. In addition, internal audit can be
used to facilitate the strengthening of the governance and risk framework within
the organisation.
Terms of reference
15. The overall status and remit of internal audit should be formalised in terms of
reference, often referred to as an audit charter, and approved by the board,
normally through the audit committee. These should then be communicated to
relevant people within the organisation. Internal audit’s terms of reference or
charter should provide clarity about its:
• Strategy and objectives;
• Role and responsibilities within the organisation;
• Scope of work;
• Accountability to the audit committee;
• Reporting lines for line management purposes;
• Accessibility to the board and the audit committee; and
• Unfettered access to all information, people and records across the
organisation.
The terms of reference should make it clear that internal audit should not be put
in a position where it has to review its own work.
Audit approach
The audit approach taken by internal audit will largely depend on its remit and the
objective assurance that the board requires.
Audit plans
Internal audit should, on at least an annual basis, develop a plan of work that it
will cover to provide the required assurance to the audit committee and the
board. This plan should retain some flexibility to enable internal audit to respond
to new issues as they arise. The audit plan should identify how internal audit will:
• Obtain assurance on the effectiveness of the governance and risk management
processes;
• Support the development and maintenance of governance and risk
management processes;
• Challenge the board’s assessment of risk and the controls in place to manage
the identified risks;
16. • Evaluate and test the effectiveness of controls in place to manage the identified
risks; and
• Co-ordinate with other sources of assurance, e.g. health and safety, external
auditors, etc.
In setting the audit plan, there should be effective dialogue between the audit
committee, management, internal audit and external auditors to ensure that there
is adequate assurance from all sources to cover all key business risks. Audit
committees need to make clear their expectations that both internal and external
auditors will communicate effectively with each other about how their respective
audit plans and objectives will cover these key business risks. The IIA’s
Performance Standard 2201, Planning Considerations, states that internal
auditors, in planning their work, should consider the objectives of the activity
being reviewed, the risks related to that activity, the adequacy and effectiveness
of the activity’s risk management and control systems and the opportunities for
making significant improvements to those systems.
Skills and resources
Internal audit needs to have adequate budget and resources to complete its work
plan and fulfil its remit. In achieving appropriate coverage of the agreed risk
areas, it will need to have staff with the right skills and expertise. It may also
require access to specialist resources which might include using staff from
elsewhere in the organisation or external resources.
Sourcing of internal audit
There is no requirement for internal audit to be provided by an organisation’s own
employees. The organisation may choose to have the service provided fully from
within, may outsource it entirely to an external provider or may consider a mixture
of internal and external sourcing. However the service is provided, it needs to fit
into the overall remit and scope that has been set and its effectiveness needs to
be monitored and reviewed on a regular basis by the audit committee.
17. Performing the audit work
In order to perform its work efficiently and effectively, internal audit will need to
have unfettered access to necessary information, people, records and
outsourced operations across the organisation. IIA Performance Standard 2300,
Performing the Engagement, states that internal auditors should identify, analyse,
evaluate and record sufficient information to achieve the engagement’s
objectives. The head of internal audit will need to determine how internal auditors
carry out their work and the level of evidence required to support their
conclusions.
Evaluation of findings
Internal auditors will normally evaluate the findings of each engagement. They
should assess whether the actions adopted by management address risks in the
manner and to the extent intended and identify and report any weaknesses.
Communication of results
Under the IIA’s Performance Standard 2400, Communicating Results, it is
recommended that internal auditors report internally to the board, the audit
committee and management on a regular basis. Internal audit’s reports, opinions
and any recommended management actions need to be communicated in a
clear, concise, reliable and constructive way. They should demonstrate a clear
understanding of the organisation and its objectives. All significant actions need
to be communicated to the audit committee regularly, together with dates of
implementation. Where key agreed actions are not appropriately implemented by
management, there needs to be a mechanism for internal audit to investigate the
reasons why and, if necessary, escalate matters to the audit committee. It is
important for both internal and external auditors to co-operate, communicate and
share their evaluations and the results of their audit work when relevant and
subject to any confidentiality requirements. This dialogue should take place
regularly throughout the year.
18. External audit
Selecting and evaluating the external auditor
Few decisions that audit committees make are more important than the
recommendation or selection of external auditors.5 Audit committee members
should, therefore, be diligent in selecting the right auditor and in evaluating the
auditor’s performance throughout the engagement. Exhibit 2 includes some
selection criteria for audit committee consideration. These same criteria also can
be used to evaluate the auditor’s performance during or at the end of an audit.
External auditor selection/evaluation criteria
Industry experience Audit committees of large, complex organizations,
and those that venture into complicated industries
like software or finance, need to ensure the external
auditors have an appropriate level of industry
experience.
Support network available
within the external auditing
firm
Audit committees should be confident that the
external auditor has access to specialized technical
resources — whether in a national office or spread
around its geographic footprint. Ask the prospective
auditor to describe the process for answering a
technical question that cannot be handled solely by
the engagement team.
19. Independence Audit committees should be confident that the
external auditor has appropriately evaluated and
reported the firm’s independence, considering
family relationships, investment holdings or other
business relationships. Independence requirements
apply to the engagement team, to the firm’s local
office, and in most public company situations, to the
firm as a whole.
Reasonableness of audit
plan
The audit committee should be confi dent that the
prospective auditor’s audit scope is reasonable and
adequate, and that it includes locations that, on their
own, are material to the fi nancial statements.
Smaller locations may be included on a rotating or
limited-scope basis.
Audit committees should heed unusually low
competitive bids, which may signal that the auditor
doesn’t understand the scope required or that he
plans to make up the difference through special
billing. Require proposing fi rms to quote both hours
and fees by major audit area to evaluate differences
in hourly rates (which may refl ect the personnel
level planned for the work)
and number of hours (which may refl ect audit plan
adequacy or excessiveness).
Ability to toe the line Audit committees should be confi dent that the audit
partner has the fortitude to deliver constructive
criticism. Over time — in executive session — ask
open-ended questions about management’s and/or
internal audit’s performance, and evaluate the
partner’s demeanor and response. To evaluate how
well a prospective auditor communicates diffi cult
20. information, ask references or the audit partner for
examples of issues he has reported. Confi dentiality
may rightly prevent full disclosure of such issues,
but the audit committee should be able to get a
sense of the auditor’s candor.
21. Form and frequency of
communications
• With management
• With internal audit
• With the audit committee
The audit committee should expect frequent, open
auditor communication with management and
internal audit, and may reasonably expect the
auditor to spend time talking to managers and
employees outside of the executive suite.
Auditing standards require the auditor to have
certain types of communications with the audit
committee.
At a high level the audit committee should expect:
• An audit planning discussion early in the year
describing what the auditor plans to do, where he
plans to do it and how much effort he expects it to
take
• Interim updates measuring progress against the
plan
• Immediate communication of issues like
suspected fraud, major internal control problems or
indication of a prior-period material error
Lack of surprises Audit surprises, in this context, come in two forms:
• Those related to last-minute audit adjustments
• Those related to last-minute cost overruns
Both can be caused either by the company’s failure
to provide necessary information to the auditor by
the agreed-upon date, or by the auditor’s failure to
perform necessary procedures early enough to
detect a particular problem. Proper interim
communication and routine audit committee/auditor
exchanges about the status of requested
information usually prevent auditor downtime,
overruns and rushed audit procedures.
Partner and manager A typical audit includes 20 to 30 percent
22. involvement partner/manager time, but audit complexity can
raise or lower those percentages. The mix of
partner and manager time also varies based on the
number of audit managers staffed and their level of
experience. The quality of the hours spent,
especially by the partner, is more important than the
number of hours spent. The partner’s early
involvement in the planning process, frequent
interim reviews of the audit work, and adequate
review time in the field translate into an effective
and efficient audit.
Quality control procedures Auditors of public companies are required to have
concurring or second partner reviews,6 often called
“engagement quality reviews.” The audit committee
should inquire about the skills and involvement of
the concurring partner, who should have appropriate
industry experience and be available to the
engagement team as needed.
Using the work of others The audit committee should be confident that the
external auditor is making appropriate but not
excessive use of the internal control testing
performed by others, including internal audit.
Usefulness of
recommendations
External auditors are uniquely positioned to add
value beyond the assurance provided in the audit
opinion, and audit committees should be confident
that the auditors they select have a continual
improvement mindset. With unprecedented access
to business operations and related books and
records, and valuable knowledge gained from other
companies’ best practices.
Team chemistry —
Balancing client
Audit committees should expect the audit team to
be courteous, respectful and reliable, and at the
23. relationships with duty to
financial statement users
same time, to maintain a “healthy skepticism.”8
Committee members should ask management
periodically about the auditor relationship — looking
equally for signs of excessive tension and excessive
collegiality9 — and should ask the auditor about the
nature of management’s interactions.
External auditor reporting
Auditing standards require the external auditor to communicate certain things to
“those charged with governance,” which usually includes management and the
board (through the audit committee).12 In general, the audit committee should
expect the auditor to communicate:
• The auditor’s responsibilities in relation to the financial statement audit,
• Planned scope and timing of the audit,
• Significant findings from the audit, and
• Auditor independence.
24. Accounting
Auditing is a vital part of accounting. Traditionally, audits were mainly associated
with gaining information about financial systems and the financial records of a
company or a business.
Financial audits are performed to ascertain the validity and reliability of
information, as well as to provide an assessment of a system's internal control.
The goal of an audit is to express an opinion of the person / organization /
system (etc.) in question, under evaluation based on work done on a test basis.
Due to constraints, an audit seeks to provide only reasonable assurance that
the statements are free from material error. Hence, statistical sampling is often
adopted in audits. In the case of financial audits, a set of financial statements are
said to be true and fair when they are free of material misstatements – a concept
influenced by both quantitative(numerical) and qualitative factors. But recently,
the argument that auditing should go beyond just true and fair is gaining
momentum. And the US Public Company Accounting Oversight Board has come
out with a concept release on the same.
Cost accounting is a process for verifying the cost of manufacturing or producing
of any article, on the basis of accounts measuring the use of material, labor or
other items of cost. In simple words, the term, cost audit means a systematic and
accurate verification of the cost accounts and records, and checking for
adherence to the cost accounting objectives. According to the Institute of Cost
and Management Accountants of Pakistan, a cost audit is "an examination of
cost accounting records and verification of facts to ascertain that the cost of the
product has been arrived at, in accordance with principles of cost accounting.
An audit must adhere to generally accepted standards established by governing
bodies. These standards assure third parties or external users that they can rely
upon the auditor's opinion on the fairness of financial statements, or other
subjects on which the auditor expresses an opinion.
The definition for Audit and Assurance Standard AAS-1 by the Institute of
Chartered Accountants of India (ICAI): “Auditing is defined as a systematic and
independent examination of data, statements, records, operations and
25. performance (financial or otherwise) of an enterprise for a stated purpose. In any
auditing situation, the auditor perceives and recognizes the proposition before
him for examination, collects evidence, evaluates the same and on this basis
formulates a judgment which is communicated through an audit report. An audit
is an independent examination of financial information of an entity, irrespective of
its size and form, when such examination is conducted with a view of expressing
an opinion thereon.”
Integrated audits
In US audits of publicly traded companies are governed by rules laid down by
the Public Company Accounting Oversight Board (PCAOB), which was
established by Section 404 of the Sarbanes–Oxley Act of 2002. Such an audit is
called an integrated audit, where auditors, in addition to an opinion on the
financial statements, must also express an opinion on the effectiveness of a
company's internal control over financial reporting, in accordance with PCAOB
Auditing Standard No. 5.
There are also new types of integrated auditing becoming available that use
unified compliance material (see the unified compliance section in Regulatory
compliance. Due to the increasing number of regulations and need for
operational transparency, organizations are adopting risk-based audits that can
cover multiple regulations and standards from a single audit event. This is a very
new but necessary approach in some sectors to ensure that all the
necessary governance requirements can be met without duplicating effort from
both audit and audit hosting resources.
Assessments
The purpose of an assessment is to measure something or calculate a value for
it. Although the process of producing an assessment may involve an audit by an
independent professional, its purpose is to provide a measurement rather than to
express an opinion about the fairness of statements or quality of performance.
26. Auditors
Auditors of financial statements can be classified into two categories:
External auditor / Statutory auditor is an independent firm engaged by the
client subject to the audit, to express an opinion on whether the
company's financial statements are free of material misstatements, whether
due to fraud or error. For publicly traded companies, external auditors may
also be required to express an opinion over the effectiveness of internal
controls over financial reporting. External auditors may also be engaged to
perform other agreed-upon procedures, related or unrelated to financial
statements. Most importantly, external auditors, though engaged and paid by
the company being audited, are regarded as independent auditors.
Cost auditor / Statutory Cost auditor is an independent firm engaged by
the client subject to the Cost audit, to express an opinion on whether the
company's Cost statements and Cost Sheet are free of material
misstatements, whether due to fraud or error. For publicly traded companies,
external auditors may also be required to express an opinion over the
effectiveness of internal controls over Cost reporting. These are Specialized
Person called Cost Accountants in India & CMA globally either Cost &
management Accountant or Certified management Accountants.
The most used external audit standards are the US GAAS of the American
Institute of Certified Public Accountants; and the ISA International Standards on
Auditing developed by theInternational Auditing and Assurance Standards
Board of the International Federation of Accountants.
Internal auditors are employed by the organizations they audit. They work
for government agencies (federal, state and local); for publicly traded
companies; and for non-profit companies across all industries. The
internationally recognized standard setting body for the profession is the
Institute of Internal Auditors - IIA (www.theiia.org). The IIA has defined internal
auditing as follows: "Internal auditing is an independent, objective assurance
and consulting activity designed to add value and improve an organization's
operations. It helps an organization accomplish its objectives by bringing a
27. systematic, disciplined approach to evaluate and improve the effectiveness of
risk management, control, and governance processes".[5]
Thus professional
internal auditors provide independent and objective audit and consulting
services focused on evaluating whether the board of directors, shareholders,
stakeholders, and corporate executives have reasonable assurance that the
organization's governance, risk management, and control processes are
designed adequately and function effectively. Internal audit professionals
(Certified Internal Auditors - CIAs) are governed by the international
professional standards and code of conduct of the Institute of Internal
Auditors.[6]
While internal auditors are not independent of the companies that
employ them, independence and objectivity are a cornerstone of the IIA
professional standards; and are discussed at length in the standards and the
supporting practice guides and practice advisories. Professional internal
auditors are mandated by the IIA standards to be independent of the
business activities they audit. This independence and objectivity are achieved
through the organizational placement and reporting lines of the internal audit
department. Internal auditors of publicly traded companies in the United
States are required to report functionally to the board of directors directly, or a
sub-committee of the board of directors (typically the audit committee), and
not to management except for administrative purposes. As described often in
the professional literature for the practice of internal auditing (such as Internal
Auditor, the journal of the IIA) or other similar and generally recognized
frameworks for management control when evaluating an entity's governance
and control practices; and apply COSO's "Enterprise Risk Management-
Integrated Framework" or other similar and generally recognized frameworks
for entity-wide risk management when evaluating an organization's entity-
wide risk management practices. Professional internal auditors also use
Control Self-Assessment (CSA) as an effective process for performing their
work.
Consultant auditors are external personnel contracted by the firm to
perform an audit following the firm's auditing standards. This differs from
the external auditor, who follows their own auditing standards. The level of
independence is therefore somewhere between the internal auditor and the
external auditor. The consultant auditor may work independently, or as part of
the audit team that includes internal auditors. Consultant auditors are used
28. when the firm lacks sufficient expertise to audit certain areas, or simply for
staff augmentation when staff are not available.
Risk is inherent in the decisions that an organisation takes to manage and run
its business and in the business processes established to assist in the
achievement of its business objectives. Changes in the way organisations carry
out their normal activities resulting from, for example, expansion of the
business or changes in the regulatory framework, can place enormous strain
on an organisation’s control mechanisms and become major sources of risk.
That is why establishing, implementing and embedding effective risk and
control elements of the overall corporate governance framework are of
fundamental importance to all organisations.
Internal audit can play an important assurance role in an organisation’s
governance processes, particularly in the area of risk management and control.
In many organisations, the expectations placed upon internal audit have
increased and the function is being relied on to make a significant contribution.
With the introduction of the revised Combined Code and the Smith Guidance,
audit committees are expected to take a more focused oversight role in respect
of risk management and internal control. They need assurance from
management and independently that good internal controls are in place and
operating effectively. Internal audit can contribute to independent assurance on
the overall risk management, control and corporate governance processes. It
can also be a useful catalyst for change and improvement within the
organisation. It is important therefore for the audit committee to distinguish
between the role of management and that of internal audit. Management has
primary day-to-day responsibility for managing risk and for the operation of
internal controls within an organisation. Internal audit’s role is separate and
independent from management. ‘Independence’ has a different meaning for
internal audit than it does for external audit.(1) The internal audit function is
generally considered independent when it can carry out its work freely and
objectively.
29. Performance Audit
Safety, security, information systems performance, and environmental concerns
are increasingly the subject of audits. There are now audit professionals who
specialize in security audits and information systems audits. With nonprofit
organizations and government agencies, there has been an increasing need
for performance audits, examining their success in satisfying mission objectives.
Quality Audits
Quality audits are performed to verify conformance to standards through review
of objective evidence. A system of quality audits may verify the effectiveness of a
quality management system. This is part of certifications such as ISO 9001.
Quality audits are essential to verify the existence of objective evidence showing
conformance to required processes, to assess how successfully processes have
been implemented, and to judge the effectiveness of achieving any defined target
levels. Quality audits are also necessary to provide evidence concerning
reduction and elimination of problem areas, and they are a hands-on
management tool for achieving continual improvement in an organization.
To benefit the organization, quality auditing should not only report non-
conformance and corrective actions but also highlight areas of good practice and
provide evidence of conformance. In this way, other departments may share
information and amend their working practices as a result, also enhancing
continual improvement.
Project Management
Projects can undergo 2 types of Project audits:
Regular Health Check Audits: The aim of a regular health check audit is
to understand the current state of a project in order to increase project
success.
30. Regulatory Audits: The aim of a regulatory audit is to verify that a project
is compliant with regulations and standards. Best practices of NEMEA
Compliance Center describe that, the regulatory audit must be accurate,
objective, and independent while providing oversight and assurance to the
organization.
Energy Audits
An energy audit is an inspection, survey and analysis of energy flows for energy
conservation in a building, process or system to reduce the amount of energy
input into the system without negatively affecting the output(s).
Operation Audit
An operations audit is an examination of the operations of the client's business.
In this audit the auditor thoroughly examines the efficiency, effectiveness and
economy of the operations with which the management of the entity (client) is
achieving its objective. The operational audit goes beyond the internal controls
issues since management does not achieve its objectives merely by compliance
of satisfactory system of internal controls. Operational audits cover any matters
which may be commercially unsound. The objective of operational audit is to
examine Three E's, namely Effectiveness – doing the right things with least
wastage of resources. Efficiency – performing work in least possible time.
Economy – balance between benefits and costs to run the operations
31. OBJECTIVE
1. Identify different functions taken up by the Auditing firms.
2. Identify the different types of auditing methods.
3. Understand the importance of auditing.
4. Understand the concept of readership and circulation.
33. Advantages of Auditing
1. Assurance of true and fair accounts - An audit provides an assurance
to the investors, government, lenders, creditors, owners, management etc.
That the final account presented shows the true and fair picture of the profit
and losses and financial position of the concern
2. True and fair balance sheet - The user of final accounts can be sure that
the assets and liabilities disclose true and fair view of financial position of
the concern, it’s neither more nor less, and it’s free from window dressing or
secret reserve.
3. True and fair profit and loss account - The user of final accounts should
be sure that the profit and loss account show true amount of profit or less
as it is.
4. Tally with books of accounts - The audited final accounts should tally
with the books of accounts of the concern. So it can be easy to calculate
the taxable income without checking all the transactions.
5. Disclose all material facts - The audited final accounts should disclose
all material facts, thus users can rely on them for making useful decisions
of lending, investing etc.
6. As per law - The audited final accounts should be prepared as per the
rules and guidelines laid down by law.
7. Detection of errors and frauds - It is assumed that the audited final
accounts are free from errors and frauds, the auditor with his expertise
knowledge would detect the errors and fraud so as to show the true figure
of final accounts.
8. Moral check on employees - Auditing techniques such as verification,
vouching of cash, assets, stock etc. act as a moral check on the
employees, this forces them to keep the accounts up-to-date and free from
errors and frauds.
9. Advice to concern - Auditor can also advise the client about internal
control, taxation, finance, accounting system etc.
34. Limitations of Auditing
1. All transactions cannot be checked - It is not possible for an auditor to
check each and every transaction; he has to check them on sample basis.
2. Evidence is not conclusive - Audit evidence is not conclusive in nature
the confirmation of debtors is not conclusive evidence that all amount will
be collected, the conclusions are persuasive rather than conclusive.
3. Not easy to detect some frauds - It’s not easy for an auditor to detect
the deeply laid frauds which involves acts designed to conceal them such
as forgery, false explanation, and not recording transaction and so on.
4. Audit cannot assure about profitability or efficiency of management
- Even though the accounts are audited it doesn’t that the user can take
granted the future profitability or prospects of concern as audit don’t
comment on efficiency of the management.
5. Rely on experts - The auditor has to rely on experts like lawyers,
engineers, valuers etc. for estimation of contingent liability and valuation of
fixed assets
36. Noesis is a unique hospitality professional services firm in India. It offers a
complete cycle of broad-based services across a wide range of hospitality
retaining the specialist skills, attention to detail, and quality of service.
Considered by its many multi-national, national and regional clients as a
particular “safe pair of hands”, with the resources and skills to offer both, a “one
stop” service and in-depth expertise, Noesis has built up an excellent reputation
for adding value to the client.
Noesis provides Developers, Investors and corporates with a comprehensive
range of services including research, consultancy, transactions, Capital markets,
retail, education and hospitality advisory.
Client Focus:
Noesis places the client first and adopts a genuine partnering approach. From
the outset, Noesis places great emphasis on understanding the client’s current
and likely future business, alongside its challenges and opportunities. Through
this rigorous brief derivation, regular discussion and reporting, Noesis breadth of
experience enables our client to make decisions based on maximum information.
The Noesis Approach:
Noesis team approach, with the right blend of experience and skills, offers the
client effective support. Rigorous proven methodologies, and innovative thinking,
enable Noesis to stimulate imaginative solutions that work. Good
communications and a holistic approach involving all stakeholders with frequent
workshops.
The Noesis Difference:
Noesis is entirely independent and can offer unbiased advice and assistance.
Noesis team works closely with client’s and therefore offer support with a clear
understanding of the client’s perspective.
37. Accustomed to viewing life through the client’s eyes, Noesis offers unrivalled
commercial counsel to protect the client’s interests - whether it is advisory,
transactions or negotiating on behalf of the client.
Location:
Headquartered in the Mumbai, Noesis takes care of its Western and Southern
India’s assignment from this office. Noesis Delhi office takes care of Northern and
Eastern India assignments. Noesis also works extensively internationally,
including in Thailand and the Middle East.
Neosis advisory private limited is a private company incorporated on 27 April
2010. It is classified as Indian non-government company and is registered at
registrar of companies , Delhi. Its authorized share capital is Rs. 100,000 and its
paid up capital is Rs. 100,000.
Neosis advisory private limited’s annual general meeting (AGM) was last held on
30 September 2013 and as per records from ministry of corporate affairs (MCA),
its balance sheet was last filed on 31 March 2013.
Neosis advisory private limited’s corporate identification number (CIN) , is
U67190DL2010PTC202034 and its registration number is 202034. Its registered
address is C-20 Jangpura B, New Delhi – 110014 , Delhi , India.
There are two directors of Neosis advisory private limited.
Neosis Advisory with the aim of providing a wide range of accounting and
financial services to clients in India. We are a team of chartered accountants in
India, with vast knowledge and professional experience, serving its clients and
specializes in the fields of accounting, auditing, taxation, foreign investments,
company law consultancy. software development consultancy, ISO 9000-2001
certificate consultancy.
Neosis Advisory is a team of distinguished chartered accountant, corporate
financial advisors and tax consultants in India. Our firm of chartered accountants
represents a coalition of specialized skills that is geared to offer sound financial
solutions and advices. The organization is a congregation of professionally
38. qualified and experienced persons who are committed to add value and optimize
the benefits accruing to clients.
Capital Market
Noesis Capital Market team advises on investment and divestment strategies
across the entire Hospitality Consultant asset classes. Capital Market team
primarily serves hospitality consultant funds, HNI’s investors, developers and
asset owners. Offer solutions based on the specific needs of the client; we take
mandate from client after understanding the investor’s objectives and assignment
in detail.
Our advice and services are backed by unparallel hospitality consultant market
knowledge, enabling clients to make a quality decision. Our in-depth coverage
ensures we offer a spread of opportunities to our clients.
Capital Market Services include:
Structured joint venture.
Asset investments (pre-let) and securitization.
Project or Joint Venture appraisal and valuation.
Financial structuring and valuation.
39. Investor Relations
We at Noesis Capital Advisors believe in creating long term sustainable value for
our esteemed clients. The services provided by our Investor Relations team
include but are not limited to:
We undergo due diligence as to sector in which client operates and
thereafter detailed due diligence in understanding company’s business
model.
We make financial model, which is then portrayed into investor friendly
investor presentation, in terms of clear understanding.
Client’s business story is communicated to buy side & sell side by
conducting road shows, conference calls, one to one meet and media
channels as required.
Any query as regards to investment & structure of same is handled by our
qualified team.
Any major update with respect to client’s industry will be communicated to
client on regular basis.
Evaluating the current Investor Relations situation based upon
communication with the investment community and current market
sentiment toward your corporation’s
Creation of a Corporate Fact Sheet and Investor Kit geared to both current
and prospective investors of your company notifying current shareholders
of forth-coming events and intriguing new investors with the same
information.
Distributing your company's investor kit and corporate fact sheet
through Direct Mail Programs to Institutional and Individual
Investors housed in Funds and Financial Firms.
Amplifying the message and model in which your company shows
Accountability and Value to shareholders through Road Shows. This
40. allows you to get your company's message in front of hundreds of firms for
evaluation and potential investment.
Creation and maintenance of Investor Communications via phone, e-mail,
and Investor Community teleconference calls allowing the Company to
provide an “open book” of information to investors of all types.
Increase of Institutional Awareness through our In House active call
center. Allow our IR reps exhibit the value of your corporation to potential
qualified investors, funds and financial centers over the phone.
Press Release Submission over various News, Market and Press wires in
a timely manner. We can also construct news content for your approval
with facts that you provide in order to keep the Press Release process
time efficient.
Any other Investor Relations Needs provided by our client, we could
provide a direction in which to act throughout consultation with our Market
and IR Experts. We strive for the success of each and every client
contracted through our firm
41. Project Management
Noesis Project Management Consultancy (PMC) vertical provides professional
services to our clients in achieving their goals of projects within time, quality and
budget. We further adds on project cost savings, proactive risk management, and
profitable strategies for sustainability. You gain an unparallel advantage of having
greater control of outcomes through our suite of specialized industry solutions –
Hotel, Commercial, Education, Health, Infrastructure, Industrial, Residential and
Retail.
PMC Division plays the role of a planner, scheduler, coordinator and supervisor
for projects right from concept to completion.
Our consultative and methodical approach brings efficiency and effectiveness
into projects that create real value for your company. A single point-of-contact
(SPOC) provides end-to-end turnkey solutions for Construction Management,
Project Audit Services and Fit-Out Management.
Execution of the project in the quickest possible time, with due diligence to
safety
Delivery at the most competitive cost
Consistently maintaining high levels of quality
Our expert team has delivered variety of projects for owners, occupiers and
investors across the nations. We have largely delivered projects across the
country to mention few are Bengaluru, Mumbai, Pune, Kolkata, Hyderabad, and
Agra and many more.
We have the experience to handles every stage of a project’s life-cycle: Pre-
Construction, Construction & Post-Construction. Our expert professional team
has wide-ranging expertise in design and engineering.
The Project Management Platform:
Greenfield Projects
Project Management - Interior Fit-Outs
Construction Management
Design & Build Services
42. Account Management
Renovation/Refurbishment Manage
Technical Advisory / Due Diligence
Development Advisory/Development Management
Research & Consulting
Noesis Consulting & Advisory team is equipped with requisite skills sets to
provide comprehensive consultation, advisory, research and valuation services,
valuable to a wide range of industries. We provide detailed and accurate
information that are beneficial for your unique circumstances.
Our expertise extends to every aspect of hospitality industry .
Best use Studies or feasibility studies
Independent Market Land Valuation
Portfolio valuation
Acquisition/Disposition consulting
With our services, you can make a quality decision regarding your hospitality
consultant that is based on an independent analysis of current market conditions.
We provide services to clients such as corporations, financial institutions,
government agencies, public sector entities, developers, hospitality consultant
funds and private investors.
43. Hospitality Services
Noesis Hospitality team provide customized and unparallel solutions to clients.
Our in-depth understanding enables us to guide clients in shaping effective entry
strategies. If you need a partner that understands the complexities of the
hospitality industry as an operating business and as a hospitality consultant
investment, we can provide the solutions you need.
Our strong operations and consulting background coupled with the domain
knowledge in hospitality consultant provides a holistic view to both developers
and brands. Developers benefit from our comprehensive analysis of a large
variety of brands, and consequently enable them arrive at the best fit for their
development needs. Brands that work with us can make sound, informed
decisions based on our unbiased and objective evaluation of the developers and
locations.
Noesis offers the full range of services
Advisory services
Entry strategy
Site selection & negotiations
Feasibility and valuation reports
Debt and equity finance
Management Operator selection & negotiations
45. FINDINGS AND INFERENCES
The auditor has a responsibility to plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement, whether caused by error or fraud. Because of the nature of audit
evidence and the characteristics of fraud, the auditor is able to obtain
reasonable, but not absolute, assurance that material misstatements are
detected. The auditor has no responsibility to plan and perform the audit to obtain
reasonable assurance that misstatement, whether caused by errors or fraud, that
are not material to the financial statements are detected.
46. LIMITATIONS
The sample size is not universal , some part of other cities remained
uncovered
Unavailability of some information due of lack of awareness of retailers
Time and expenses were major constraints
Personal basis may be existing as the dealer of varied nature elicits the
information
48. CONCLUSION
The project was a great experience for me in order to study the marketing
aspects in the world. It was a great opportunity for me to express what I have
studied.
This industry is a place where two major players are there in the world.
50. QUESTIONNAIRE
NEWSPAPERS: SURVEY
Q1. Name:
Q2. Age:
a.) 10-20
b.) 20-30
c.) 30-40
d.) 40-50
e.) Above 50
Q3. Which newspaper do you read?
a.) Hindustan Times
b.) Times of India
c.) Hindu
d.) Pioneer
e.) Others
Q4. How often do you read any newspaper?
a.) Daily
b.) Weekly
c.) Never
Q5. Have you heard of Pioneer?
a.) Yes
b.) No
Q6. Why do you read newspapers?
a.) Daily habit
b.) Knowledge
c.) Competitive exam
d.) Gossips
51. Q7. What do you like the most in the newspaper?
a.) Advertisements
b.) Content
c.) Details
d.) Headlines
e.) Pictures
Q8. If you have heard of Pioneer, what did you like the most about it?
