The document provides an overview of regulations on audit and accounts in 2020. It discusses several types of audits in the IT environment, including audit of IT systems and IT-assisted audits. It also outlines the broad framework for financial, compliance and performance audits conducted by the Comptroller and Auditor General of India. This includes examining transactions and rules for legality and effectiveness. Performance audits assess economy, efficiency and effectiveness of government spending. The document also discusses audits of specific areas like expenditure, receipts, stores and stock, grants and loans, and government companies.
This document discusses topics related to auditing receipts and payments. It covers vouching, documentary evidence, safeguards, verification of transactions, and audit of specific types of receipts and payments, including cash, investments, rentals, loans, and sales. The key points are that auditors must verify transactions by examining supporting documentation, ensure compliance with accounting principles, evaluate internal controls, and check that receipts and payments are properly recorded and authorized.
The document discusses government auditing standards and requirements for auditing billions of dollars in federal grants, loans, and other funding provided by the government each year. It outlines general standards for auditors, including independence, due care, continuing education, supervision, and quality control. It also lists responsibilities for auditors such as compiling accounts, keeping records, providing audit plans and reports, meeting deadlines, maintaining resources and records, and coordinating with the entities being audited.
Verification involves checking balance sheet items like stock, while vouching involves checking profit and loss items like expenses.
The document then discusses the process for physically verifying different types of assets like cash, inventory, and fixed assets. This involves notifying the client, conducting counts on scheduled dates, preparing reports on findings, reconciling any differences, and getting management approval on adjustments.
Procedures like surprise cash counts, inventory classification methods, and examining fixed asset documents are described. Reasons for excess or deficits in quantities are also covered.
This document outlines requirements for audit documentation according to standards set by the PCAOB. It defines audit documentation as the written record of the audit work performed, evidence obtained, and conclusions reached. Audit documentation supports the auditor's conclusions and representations in their report. It must contain sufficient information for another auditor to understand the work performed and conclusions reached. The documentation must also include any significant issues identified and how they were addressed. Audit documentation must be retained for seven years after the report release date.
There are four main types of auditors:
1) External auditors perform independent reviews of a company's financial records
2) Internal auditors provide independent evaluations of a company's financial and operational activities
3) Government auditors are employed by state and local government agencies
4) Forensic auditors are trained to detect, investigate, and deter fraud and white-collar crime.
The document provides information on tax audit requirements in India. It discusses that tax audits are mandated for businesses and professionals with annual sales/receipts over certain thresholds. The purpose is to ensure accurate income reporting and compliance with tax laws. Tax auditors must be chartered accountants and are responsible for examining accounts, reporting discrepancies, and certifying tax audit reports using amended Forms 3CA, 3CB, and 3CD. The amended forms require additional details on various transactions to facilitate tax assessments.
The document outlines the procedures for finalizing pension and commutation cases for retiring government employees in India.
1. The process should begin 2 years before retirement by collecting service details and examining records for deficiencies. Pension papers must be completed within 8 months of retirement.
2. Qualifying service, average emoluments, pension and gratuity must be determined within 2 months and papers sent to the Pay & Accounts Office 6 months before retirement for pension orders.
3. Provisional pension may be granted if departmental proceedings are pending at retirement to avoid hardship.
This document discusses topics related to auditing receipts and payments. It covers vouching, documentary evidence, safeguards, verification of transactions, and audit of specific types of receipts and payments, including cash, investments, rentals, loans, and sales. The key points are that auditors must verify transactions by examining supporting documentation, ensure compliance with accounting principles, evaluate internal controls, and check that receipts and payments are properly recorded and authorized.
The document discusses government auditing standards and requirements for auditing billions of dollars in federal grants, loans, and other funding provided by the government each year. It outlines general standards for auditors, including independence, due care, continuing education, supervision, and quality control. It also lists responsibilities for auditors such as compiling accounts, keeping records, providing audit plans and reports, meeting deadlines, maintaining resources and records, and coordinating with the entities being audited.
Verification involves checking balance sheet items like stock, while vouching involves checking profit and loss items like expenses.
The document then discusses the process for physically verifying different types of assets like cash, inventory, and fixed assets. This involves notifying the client, conducting counts on scheduled dates, preparing reports on findings, reconciling any differences, and getting management approval on adjustments.
Procedures like surprise cash counts, inventory classification methods, and examining fixed asset documents are described. Reasons for excess or deficits in quantities are also covered.
This document outlines requirements for audit documentation according to standards set by the PCAOB. It defines audit documentation as the written record of the audit work performed, evidence obtained, and conclusions reached. Audit documentation supports the auditor's conclusions and representations in their report. It must contain sufficient information for another auditor to understand the work performed and conclusions reached. The documentation must also include any significant issues identified and how they were addressed. Audit documentation must be retained for seven years after the report release date.
There are four main types of auditors:
1) External auditors perform independent reviews of a company's financial records
2) Internal auditors provide independent evaluations of a company's financial and operational activities
3) Government auditors are employed by state and local government agencies
4) Forensic auditors are trained to detect, investigate, and deter fraud and white-collar crime.
The document provides information on tax audit requirements in India. It discusses that tax audits are mandated for businesses and professionals with annual sales/receipts over certain thresholds. The purpose is to ensure accurate income reporting and compliance with tax laws. Tax auditors must be chartered accountants and are responsible for examining accounts, reporting discrepancies, and certifying tax audit reports using amended Forms 3CA, 3CB, and 3CD. The amended forms require additional details on various transactions to facilitate tax assessments.
The document outlines the procedures for finalizing pension and commutation cases for retiring government employees in India.
1. The process should begin 2 years before retirement by collecting service details and examining records for deficiencies. Pension papers must be completed within 8 months of retirement.
2. Qualifying service, average emoluments, pension and gratuity must be determined within 2 months and papers sent to the Pay & Accounts Office 6 months before retirement for pension orders.
3. Provisional pension may be granted if departmental proceedings are pending at retirement to avoid hardship.
The document discusses the process of vouching in auditing. It defines vouching as the examination of documentary evidence supporting transactions. The objectives of vouching include detecting errors and frauds, verifying the truth and completeness of accounts, and ensuring transactions are authorized. The document outlines the principles, techniques, types of vouchers, and importance of vouching transactions such as cash sales, purchases, rent receivables, and payments to creditors. It also discusses routine checking which regularly monitors accounts to detect errors.
Internal controls are defined as the entire system of controls, both financial and non-financial, established by management to carry out business operations in an orderly manner, safeguard assets, and ensure accurate and reliable record keeping. An effective internal control system includes proper organization structure and division of responsibilities, adequate authorization and accountability, sound practices and procedures, competent personnel, and controls over assets, liabilities, revenues, and expenses. However, internal controls also have limitations such as high implementation costs for small businesses, the potential for human error, possibility of collusion between employees, and risk of misuse of authority or manipulation by management.
The document outlines key points for a special audit of a company under section 142(2A) of the Indian Income Tax Act of 1961. It lists several areas the audit should review, including proper maintenance of books of accounts, accounting for all income accruals, compliance with tax deduction and deposit provisions, expenses and deductions claimed, and checks for embezzlement. The special audit aims to inspect the company's financial records and transactions in depth to ensure compliance with relevant taxation laws and accounting standards.
Principles to Develop Good Internal Check SystemDhrumil Shah
The document outlines principles for developing a good internal check system and internal check systems for purchases and sales. Some key principles include: implementing job rotation to avoid fraud, reporting exceptional items to management, conducting regular stock and asset verifications after hours by external parties, not giving one person 100% power over a function, having uniform disciplinary actions, conducting actual evaluations compared to standards, having daily reporting and timely supervision, having clear job profiles, doing book reconciliation on a daily basis, and having an internal auditor external to the organization. The internal check system for purchases involves requisition, purchase order, receipt of goods, and invoice. For sales, principles are having separate clerks for cash, immediate recording in the cash book, only allowing responsible officers
This document summarizes the key leave rules for Central Civil Service employees as per the CCS (Leave) Rules, 1972. It covers the various types of leave including earned leave, half pay leave, commuted leave, leave not due, extra ordinary leave, maternity leave, paternity leave, child care leave, study leave, and casual leave. For each type of leave, it provides details on credit, accumulation, combination with other leaves, maximum periods allowed, and procedures. The document aims to help participants understand and correctly apply the complex CCS leave rules.
Auditing procedure & internal control systemRadhikaGupta215
This document discusses auditing procedures and internal control systems. It begins by acknowledging the author's teacher for providing guidance on the topic. It then defines audit procedures as the steps auditors take to evaluate a company's financial statements and determine if they accurately reflect the company's financial position. The document outlines different types of audit procedures like substantive and analytical procedures. It also discusses internal control systems, their objectives and features, as well as principles and types of internal controls. Advantages and disadvantages of internal controls are provided.
I. Auditing originated in ancient times to audit public accounts but expanded with the development of trade and commerce. Luca Paciolo introduced double-entry bookkeeping which enhanced the scope of auditing.
II. In India, auditing has existed since ancient times as mentioned in Kautilya's Arthashastra but became more prominent with the industrial revolution and formation of joint stock companies.
III. Auditing involves the systematic and independent examination of an organization's financial and non-financial data, statements, operations and performance for a stated purpose.
This document discusses auditing procedures for investments, cash and bank balances, and revenue and expenditures. It provides the purpose, evidence, suitable audit objectives and assertions, and audit procedures for each area. For investments, the objectives are to ensure proper authorization, recording, valuation and disclosure of investments. Suitable procedures include verifying purchase and sale documentation, payments, dividends received, and financial statement disclosure. For cash and bank balances, the objectives are around existence, completeness, accuracy, cut-off and classification. Recommended procedures include bank confirmation, reconciliation checks, and sampling transactions. The revenue and expenditures section outlines audit tests around authorization, completeness, accuracy and other assertions through examining documentation and tracing samples.
The document outlines the process for filing GST returns in India. It discusses that returns must be filed electronically and includes key details like common e-returns for CGST, SGST and IGST. It also summarizes the different types of registered taxpayers that must file returns, including normal taxpayers, composition scheme taxpayers, input service distributors etc. The document then provides an example to illustrate the return filing process for a company, including filing outward supply details in GSTR-1, viewing inward supplies in GSTR-2A, reconciling and filing GSTR-2, and ultimately filing the final monthly GSTR-3 return along with payment of taxes.
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
The document discusses the concept of supply under the GST law. It defines supply under Section 7 of the CGST Act to include all forms of supply of goods or services such as sale, transfer, license etc. made for a consideration in the course of business. It also includes import of services for consideration and activities listed in Schedule I without consideration. The key activities that constitute supply are discussed along with relevant definitions.
Verification and valuation of assets and liabilitiessuganyababu14
The document discusses verification and valuation of assets and liabilities. It describes the auditor's role in verifying the existence, ownership, classification, and valuation of assets and liabilities. Key aspects of verification include examining documentary evidence, testing internal controls, and confirming physical existence, ownership, and proper use of assets. Valuation involves determining the exact value of assets based on original cost, depreciation, and factors like useful life. Specific guidance is provided on verifying types of assets like fixed assets, investments, stock, debtors, creditors, and bills payable.
Penalties and Prosecution under Income tax on TDS DefaultsCA. Pankaj Shah
This document discusses penalties and prosecution for defaults related to tax deducted at source (TDS) in India. It covers various types of TDS defaults like non-deduction, short deduction, late deduction, and late deposit. It describes the assessee in default's automatic liability and how interest under section 201(1A) and penalties under sections 221, 271C and 271CA are levied for such defaults. It also discusses the offenses of failing to pay deducted tax under section 276B which can lead to prosecution and imprisonment. The document provides details on reasonable causes, limitations on prosecution, standard operating procedures for prosecution, and the option for compounding offenses.
The document provides guidelines for maintaining service books and leave accounts for central government employees. Some key points:
1. Service books must be maintained for all permanent and temporary employees expected to serve over 1 year. They record all career events and are kept until retirement.
2. Entries for events like promotions, suspensions, increments are made in red ink and attested. Corrections require attestation.
3. Annual verification of service is required. On transfer, the previous office records verification for the period served there. Certified copies may be provided on payment.
Meaning of auditing
Objectives of auditing
Primary objectives
Secondary objectives
Types of errors
Technical errors
Errors of omission
Errors of commission
Duplicating errors
Compensating errors
Errors of principle
Detection and prevention
MCQ
Company audits involve examining a company's financial statements to give an expert opinion on whether they fairly represent the company's financial position. The auditor must follow compliance procedures to ensure reliance on internal controls and perform substantive procedures to check financial data in statements. Auditors must also ensure transactions comply with company law. Appointment, removal, and responsibilities of auditors are outlined in the Company Act.
The document defines key terms related to profits and gains from business and profession under the Income Tax Act. It discusses the charging provisions for income from business and profession and outlines the methods for computing income from business and allowable deductions. It also discusses the provisions for maintenance of accounts, audit requirements, and presumptive taxation schemes for certain businesses where accounts are not maintained.
This document discusses the concepts of audit verification and vouching. It defines an audit as the evaluation of a person, organization, system, process, enterprise, project or product. Verification is the process of ensuring accuracy through inspection, observation, and analysis, particularly of assets and liabilities on a balance sheet. Vouching involves carefully examining original documents like invoices and receipts to prove the accuracy of accounting entries and identify any omitted transactions. The document outlines the objectives, principles, procedures, techniques, differences and advantages of audit verification and vouching.
http://www.thewrightcpa.com Wright and Associates, CPA's are highly proficient at E-Auditing, and specialize in serving Non-Profits and Colleges. Check us out!
The document discusses various provisions related to clubbing of income and deemed incomes under the Income Tax Act. It explains that income of other persons may be included in the assessee's total income in certain cases like transfer of income without transfer of asset, revocable transfer of assets, income of spouse or minor child, etc. It also discusses the concept of deemed incomes where certain amounts like unexplained cash credits, investments, money, etc. are deemed as income of the assessee even if they are not actual incomes. The objectives and key terms related to clubbing of income are also explained briefly.
This document discusses auditing and provides definitions and explanations of key auditing concepts and procedures. It begins by explaining the origins and evolution of auditing from verifying spoken words to written financial records. It then defines auditing and describes fundamental principles like integrity, independence, planning, evidence, and reporting. It also explains concepts like audit evidence, audit plans, audit programs, and audit sampling which are techniques used to efficiently and effectively evaluate financial statements and internal controls.
An IT audit examines an organization's IT infrastructure and systems to evaluate their security, integrity, efficiency, and effectiveness in achieving business objectives. The goal is to determine if information systems are protecting assets, maintaining data integrity, and operating as intended. Key areas assessed include controls, change management, security, and business continuity planning. IT audits follow a process involving planning, fieldwork, reporting, and follow-up to analyze evidence and issue recommendations for improving the IT system.
The document discusses the process of vouching in auditing. It defines vouching as the examination of documentary evidence supporting transactions. The objectives of vouching include detecting errors and frauds, verifying the truth and completeness of accounts, and ensuring transactions are authorized. The document outlines the principles, techniques, types of vouchers, and importance of vouching transactions such as cash sales, purchases, rent receivables, and payments to creditors. It also discusses routine checking which regularly monitors accounts to detect errors.
Internal controls are defined as the entire system of controls, both financial and non-financial, established by management to carry out business operations in an orderly manner, safeguard assets, and ensure accurate and reliable record keeping. An effective internal control system includes proper organization structure and division of responsibilities, adequate authorization and accountability, sound practices and procedures, competent personnel, and controls over assets, liabilities, revenues, and expenses. However, internal controls also have limitations such as high implementation costs for small businesses, the potential for human error, possibility of collusion between employees, and risk of misuse of authority or manipulation by management.
The document outlines key points for a special audit of a company under section 142(2A) of the Indian Income Tax Act of 1961. It lists several areas the audit should review, including proper maintenance of books of accounts, accounting for all income accruals, compliance with tax deduction and deposit provisions, expenses and deductions claimed, and checks for embezzlement. The special audit aims to inspect the company's financial records and transactions in depth to ensure compliance with relevant taxation laws and accounting standards.
Principles to Develop Good Internal Check SystemDhrumil Shah
The document outlines principles for developing a good internal check system and internal check systems for purchases and sales. Some key principles include: implementing job rotation to avoid fraud, reporting exceptional items to management, conducting regular stock and asset verifications after hours by external parties, not giving one person 100% power over a function, having uniform disciplinary actions, conducting actual evaluations compared to standards, having daily reporting and timely supervision, having clear job profiles, doing book reconciliation on a daily basis, and having an internal auditor external to the organization. The internal check system for purchases involves requisition, purchase order, receipt of goods, and invoice. For sales, principles are having separate clerks for cash, immediate recording in the cash book, only allowing responsible officers
This document summarizes the key leave rules for Central Civil Service employees as per the CCS (Leave) Rules, 1972. It covers the various types of leave including earned leave, half pay leave, commuted leave, leave not due, extra ordinary leave, maternity leave, paternity leave, child care leave, study leave, and casual leave. For each type of leave, it provides details on credit, accumulation, combination with other leaves, maximum periods allowed, and procedures. The document aims to help participants understand and correctly apply the complex CCS leave rules.
Auditing procedure & internal control systemRadhikaGupta215
This document discusses auditing procedures and internal control systems. It begins by acknowledging the author's teacher for providing guidance on the topic. It then defines audit procedures as the steps auditors take to evaluate a company's financial statements and determine if they accurately reflect the company's financial position. The document outlines different types of audit procedures like substantive and analytical procedures. It also discusses internal control systems, their objectives and features, as well as principles and types of internal controls. Advantages and disadvantages of internal controls are provided.
I. Auditing originated in ancient times to audit public accounts but expanded with the development of trade and commerce. Luca Paciolo introduced double-entry bookkeeping which enhanced the scope of auditing.
II. In India, auditing has existed since ancient times as mentioned in Kautilya's Arthashastra but became more prominent with the industrial revolution and formation of joint stock companies.
III. Auditing involves the systematic and independent examination of an organization's financial and non-financial data, statements, operations and performance for a stated purpose.
This document discusses auditing procedures for investments, cash and bank balances, and revenue and expenditures. It provides the purpose, evidence, suitable audit objectives and assertions, and audit procedures for each area. For investments, the objectives are to ensure proper authorization, recording, valuation and disclosure of investments. Suitable procedures include verifying purchase and sale documentation, payments, dividends received, and financial statement disclosure. For cash and bank balances, the objectives are around existence, completeness, accuracy, cut-off and classification. Recommended procedures include bank confirmation, reconciliation checks, and sampling transactions. The revenue and expenditures section outlines audit tests around authorization, completeness, accuracy and other assertions through examining documentation and tracing samples.
The document outlines the process for filing GST returns in India. It discusses that returns must be filed electronically and includes key details like common e-returns for CGST, SGST and IGST. It also summarizes the different types of registered taxpayers that must file returns, including normal taxpayers, composition scheme taxpayers, input service distributors etc. The document then provides an example to illustrate the return filing process for a company, including filing outward supply details in GSTR-1, viewing inward supplies in GSTR-2A, reconciling and filing GSTR-2, and ultimately filing the final monthly GSTR-3 return along with payment of taxes.
This presentation explains about the meaning as well as various types of audit report which an auditor has present in his books of accounts for the sake of the company's shareholders and various other groups.
The document discusses the concept of supply under the GST law. It defines supply under Section 7 of the CGST Act to include all forms of supply of goods or services such as sale, transfer, license etc. made for a consideration in the course of business. It also includes import of services for consideration and activities listed in Schedule I without consideration. The key activities that constitute supply are discussed along with relevant definitions.
Verification and valuation of assets and liabilitiessuganyababu14
The document discusses verification and valuation of assets and liabilities. It describes the auditor's role in verifying the existence, ownership, classification, and valuation of assets and liabilities. Key aspects of verification include examining documentary evidence, testing internal controls, and confirming physical existence, ownership, and proper use of assets. Valuation involves determining the exact value of assets based on original cost, depreciation, and factors like useful life. Specific guidance is provided on verifying types of assets like fixed assets, investments, stock, debtors, creditors, and bills payable.
Penalties and Prosecution under Income tax on TDS DefaultsCA. Pankaj Shah
This document discusses penalties and prosecution for defaults related to tax deducted at source (TDS) in India. It covers various types of TDS defaults like non-deduction, short deduction, late deduction, and late deposit. It describes the assessee in default's automatic liability and how interest under section 201(1A) and penalties under sections 221, 271C and 271CA are levied for such defaults. It also discusses the offenses of failing to pay deducted tax under section 276B which can lead to prosecution and imprisonment. The document provides details on reasonable causes, limitations on prosecution, standard operating procedures for prosecution, and the option for compounding offenses.
The document provides guidelines for maintaining service books and leave accounts for central government employees. Some key points:
1. Service books must be maintained for all permanent and temporary employees expected to serve over 1 year. They record all career events and are kept until retirement.
2. Entries for events like promotions, suspensions, increments are made in red ink and attested. Corrections require attestation.
3. Annual verification of service is required. On transfer, the previous office records verification for the period served there. Certified copies may be provided on payment.
Meaning of auditing
Objectives of auditing
Primary objectives
Secondary objectives
Types of errors
Technical errors
Errors of omission
Errors of commission
Duplicating errors
Compensating errors
Errors of principle
Detection and prevention
MCQ
Company audits involve examining a company's financial statements to give an expert opinion on whether they fairly represent the company's financial position. The auditor must follow compliance procedures to ensure reliance on internal controls and perform substantive procedures to check financial data in statements. Auditors must also ensure transactions comply with company law. Appointment, removal, and responsibilities of auditors are outlined in the Company Act.
The document defines key terms related to profits and gains from business and profession under the Income Tax Act. It discusses the charging provisions for income from business and profession and outlines the methods for computing income from business and allowable deductions. It also discusses the provisions for maintenance of accounts, audit requirements, and presumptive taxation schemes for certain businesses where accounts are not maintained.
This document discusses the concepts of audit verification and vouching. It defines an audit as the evaluation of a person, organization, system, process, enterprise, project or product. Verification is the process of ensuring accuracy through inspection, observation, and analysis, particularly of assets and liabilities on a balance sheet. Vouching involves carefully examining original documents like invoices and receipts to prove the accuracy of accounting entries and identify any omitted transactions. The document outlines the objectives, principles, procedures, techniques, differences and advantages of audit verification and vouching.
http://www.thewrightcpa.com Wright and Associates, CPA's are highly proficient at E-Auditing, and specialize in serving Non-Profits and Colleges. Check us out!
The document discusses various provisions related to clubbing of income and deemed incomes under the Income Tax Act. It explains that income of other persons may be included in the assessee's total income in certain cases like transfer of income without transfer of asset, revocable transfer of assets, income of spouse or minor child, etc. It also discusses the concept of deemed incomes where certain amounts like unexplained cash credits, investments, money, etc. are deemed as income of the assessee even if they are not actual incomes. The objectives and key terms related to clubbing of income are also explained briefly.
This document discusses auditing and provides definitions and explanations of key auditing concepts and procedures. It begins by explaining the origins and evolution of auditing from verifying spoken words to written financial records. It then defines auditing and describes fundamental principles like integrity, independence, planning, evidence, and reporting. It also explains concepts like audit evidence, audit plans, audit programs, and audit sampling which are techniques used to efficiently and effectively evaluate financial statements and internal controls.
An IT audit examines an organization's IT infrastructure and systems to evaluate their security, integrity, efficiency, and effectiveness in achieving business objectives. The goal is to determine if information systems are protecting assets, maintaining data integrity, and operating as intended. Key areas assessed include controls, change management, security, and business continuity planning. IT audits follow a process involving planning, fieldwork, reporting, and follow-up to analyze evidence and issue recommendations for improving the IT system.
Why do we need internal control in an organization What is its purp.pdfmarketing413921
Why do we need internal control in an organization? What is its purpose, and what are its
objectives (not components)? Can you explain with examples?
Solution
INTERNAL CONTROL - The process designed, implemented and maintained by those charged
with governance, management and other personnel to provide reasonable assurance about the
achievement of an entity’s
objectives with regard to reliability of financial reporting,
effectiveness and efficiency of operations, safeguarding of assets, and compliance with
applicable laws and regulations. The term \"controls\" refers to any aspects of one or more of the
components of the internal control
WE NEED INTERNAL CONTROL SYSTEM IN THE ORGANISATION TO REDUCE THE
RISK OF FRAUD AND ERRORS
MAIN OBJECTIVES OF THE INTERNAL CONTROL SYSTEM IN THE ORGANISATION
ARE
Aims of Internal Control in relation to Financial and Accounting Aspects: Internal
controls relating to financial and accounting aspects are concerned with achieving the
following objectives -
(1) transactions are executed in accordance with management’s general or specific authorisation;
(2) all transactions and other events are promptly recorded in the correct amount, in the
appropriate accounts and in the proper accounting period so as to permit preparation of
financial statements in accordance with the applicable accounting standards, other recognised
accounting policies and practices and relevant statutory requirements, if any,
and to maintain accountability for assets;
(3) assets and records are safeguarded from unauthorised access, use or disposition; and
(4) the recorded assets are compared with the existing assets at reasonable intervals and
appropriate action is taken with regard to any differences.
For example : an auditor may perform a \"walk-through\" test that is, tracing a few transactions
through the accounting system. When the transactions selected are typical of those
transactions that pass through the system, this procedure may be treated as part of the tests of
control. The nature and extent of walk through tests performed by the auditor are such that they
alone would not provide sufficient appropriate audit evidence to support a control risk
assessment which is less than high.
Thank you hope this usefull.
Audits are performed to evaluate information validity, reliability, and internal controls. The goal is to express an opinion on the subject based on test work. IT audits specifically examine technology infrastructure, applications, development processes, and governance to evaluate security, integrity, effectiveness, and risk management. Key areas include systems, facilities, development lifecycle, management, architecture, and client/server environments. Findings are reported to assess controls and risks with recommendations for improvement.
This document provides an overview of key concepts related to auditing, including:
- The objectives of an audit are to obtain reasonable assurance about whether financial statements are free from material misstatement and to report on the financial statements.
- An auditor must be independent, consider materiality, and determine if financial statements present a true and fair view.
- Planning an audit involves assessing risks, developing an audit strategy and plan, and determining appropriate audit procedures.
- Internal controls are evaluated to determine if they are properly designed and operating effectively.
PART II INTERNAL AUDITING in local government.pptCamellaCandon
This document provides definitions and discusses the scope of internal auditing. It defines internal auditing as an independent and objective assurance activity that aims to add value and improve an organization's operations. The scope of internal auditing includes evaluating controls related to strategic objectives, operations, financial and operational information, asset protection, and compliance. The document also discusses the traditional audit approach and risk-based audit approach used in internal auditing.
The document discusses the differences between performance auditing and financial auditing. Performance auditing examines the economy, efficiency, and effectiveness of an organization, assessing if resources are being used appropriately and if the organization is achieving its objectives. Financial auditing focuses on ensuring financial statements are accurate and that the organization is complying with accounting standards and regulations. Some key differences highlighted are that performance auditing evaluates if targets are being met and makes recommendations for improvement, while financial auditing does not.
The document provides an introduction to auditing principles and practices. It defines auditing and distinguishes it from accounting. Auditing involves accumulating and evaluating evidence to determine if information matches established criteria, while accounting identifies, analyzes, records and communicates financial information. The purpose of auditing is to provide reliable financial information for decision making and ensure accountability. There are three main types of audits - financial statement audits, compliance audits, and operational/performance audits. Auditors can also be independent, internal to an organization, or from the government.
1 2Week 4 Evidence and Standards ACC49142020Week .docxpoulterbarbara
1
2
Week 4 Evidence and Standards ACC/491
4/20/20Week 4 Evidence and Standards
Comparison of Audit, Scientific and Legal Evidence Standards.
According to "Investopedia" (2020), generally accepted auditing standards (GAAS) are a set of systematic guidelines used by auditors when conducting audits on companies' financial records. GAAS helps to ensure the accuracy, consistency, and verifiability of auditors' actions and reports. The Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA) created GAAS. (para 1).
Scientific evidence is information gathered from scientific research, which takes a lot of time to conduct. But there are a few things that all this research needs to have in common to make it possible for businesses to accept it as "evidence" ("The Conversation," 2020).
Legal evidence is represented by what is lawful to be proven by law to be valid or invalid, true or untrue.
Consideration of Sample Sizes and Methods (random, haphazard, monetary unit sample, judgmental) and how sampling affects evidence.
Evidence gathered should be representative of the population. The chances that the sample taken is not representative of the population is sampling risk, which should be controlled by using proper sample size and appropriate selection. (Arens, Elder, & Beasley, 2014, p. 476)
The selection of a sample is made using the following methods: random, haphazard, monetary unit, and judgmental.
Random sample selection is made by giving all items in a population the same chance of being selected. Sample selection is used when there is no need to emphasize some items in the population. (Arens, Elder, & Beasley, 2014, p. 478)
Haphazard sample selection is made without any distinguishing characteristics such as size or source. (Arens, Elder, & Beasley, 2014, p. 480)
Monetary unit sampling is a statistical method used for testing details of balances. Samples are selected based on the probability proportional to size sample selection. (Arens, Elder, & Beasley, 2014, pp. 566-567)
Judgmental sampling is based on the auditor's decision on which items from the population to review. It's based on auditor's knowledge of the business and industry, as well as their experience in auditing.
Relevance, Reliability and Sufficiency of Evidence.
Our company's control over financial reporting is a process that's designed to assure the reliability of financial reporting and the preparation of financial statements for external purposes under generally accepted accounting principles. Management is responsible for establishing and maintaining internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). They assess the effectiveness of the internal control over financial reporting based on the criteria that were set forth in the Internal Control-Integrated Framework that was issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Managem.
Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...Taufir Alam
Introduction to the Presentation on internal financial control over financial reporting_a complete guide
The Companies Act, 2013 has introduced some new requirements relating to audits and reporting by the statutory auditors of companies.
One of these requirements is given under Section 143(3)(i) of the Act which requires the statutory auditor to state in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
The section has cast onerous responsibilities on the statutory auditors because reporting on internal financial controls is not covered under the Standards on Auditing issued by the ICAI.
Since the concept of reporting on internal financial controls is still new in India this new reporting requirement has thrown up many challenges for the members.
To help the members properly understand and perform the various aspects of this reporting responsibility, the Auditing and Assurance Standards Board of the Institute of Chartered Accountants of India has brought out this Guidance Note on Audit of Internal Financial Controls Over Financial Reporting.
The Guidance Note covers aspects such as Scope of reporting on internal financial controls under Companies Act 2013, essential components of internal controls, Technical guidance on the audit of Internal Financial Controls, Implementation guidance on the audit of Internal Financial Controls.
I have presented the above guidance note into a presentation that will have a complete guide for those who are planning to go for Audit of Internal financial control over financial reporting. this presentation will cover all the relevant aspects and also provide the standard operation process for the efficient conduct of the IFCR Audit. You don't need to read the complete Guidance note.
An audit is an independent examination of an organization's accounts and financial records to check that they are accurate and in accordance with relevant regulations. The main types of audits discussed are financial audits, internal audits, cost audits, and management audits. Financial audits check that financial statements comply with accounting standards. Internal audits evaluate risk management and controls. Cost audits verify cost accounting records. Management audits review managerial efficiency. Audits provide assurance to stakeholders and can help detect errors and frauds, but do not guarantee future viability and do incur additional costs.
The depth and scope of examination, time of audit, processing methods, etc. In deciding on a specific technique, also need to take account of the objective of the audit action and the capacities limited by time or other factors.
This document provides information about different types of audits: compliance audit, financial audit, operational audit, integrated audit, and forensic audit. It also includes sample exam questions and answers about auditing. The key points are:
- Compliance audits review adherence to regulations, financial audits verify financial statements, and operational audits evaluate organizational effectiveness and efficiency.
- Integrated audits combine financial and operational audit steps to assess overall organizational objectives.
- Forensic audits gather evidence to investigate financial crimes like theft or fraud.
- Sample exam questions test knowledge of the different audit types and how to ensure security policies are up-to-date.
The audit process involves 6 phases:
1) Preliminary planning
2) Pre-survey
3) Survey
4) Data collection and analysis
5) Reporting
6) Postaudit evaluation
The objective of an audit is to enable the auditor to express an opinion on whether the financial statements are prepared in accordance with the applicable financial reporting framework. The scope of an audit determines the audit procedures necessary to achieve the audit's objective.
The document provides an overview of the audit process. It defines an audit and describes the various types including financial, operational, compliance, information systems, and specialized audits. It then outlines the key steps in the audit process, including planning, fieldwork, reporting, and follow-up. Planning involves notifying the client, reviewing controls and processes, and developing an audit program. Fieldwork consists of transaction testing, documentation, and communication with the client. Reporting includes draft reports, an exit conference, formal reports, and client responses. Follow-up ensures issues are resolved.
The document discusses audit approaches and procedures. It begins by explaining the nature and steps of an audit approach, differentiating between interim, financial, and compliance audits. It then describes various audit tests like vouching, verification, tests of control, and substantive tests, explaining their purposes. The document outlines procedures for analytical procedures and substantive procedures. It emphasizes that the need for audit procedures and techniques is to obtain evidence in performing the audit.
1) The document discusses internal financial controls as defined in the Companies Act 2013, which requires companies to establish adequate internal financial controls and for auditors to evaluate their effectiveness.
2) It outlines the key components of internal financial controls - control environment, risk assessment, control activities, information and communication, and monitoring activities.
3) The roles and responsibilities of directors, auditors, and audit committees in evaluating internal financial controls and reporting on their adequacy are also summarized.
The stages of auditing are as follows: determine audit approach, understand the entity, assess risk of material misstatement, select audit procedures, prepare report, and report to management. Auditors determine risks, formulate responses like additional procedures, and test controls and substantive procedures. Audit risk is the risk of giving an inappropriate opinion and comes from inherent, control, and detection risk. Business risk impacts the organization directly from operations.
Demystifying Fixed Asset Verification_ A Crucial Component of Financial Manag...Sapient Services
Fixed asset verification helps ensure compliance with regulations such as International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP).
Similar to Overview of regulations on audit and accounts 2020 (20)
Presentation by Rebecca Sachs and Joshua Varcie, analysts in CBO’s Health Analysis Division, at the 13th Annual Conference of the American Society of Health Economists.
Bharat Mata - History of Indian culture.pdfBharat Mata
Bharat Mata Channel is an initiative towards keeping the culture of this country alive. Our effort is to spread the knowledge of Indian history, culture, religion and Vedas to the masses.
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
Indira awas yojana housing scheme renamed as PMAYnarinav14
Indira Awas Yojana (IAY) played a significant role in addressing rural housing needs in India. It emerged as a comprehensive program for affordable housing solutions in rural areas, predating the government’s broader focus on mass housing initiatives.
2. Auditing in Information Technology
Environment
Audits in IT environment cover either or both of
the following:
Audit of IT systems or IT Audits
Financial, compliance or performance audits (or
combined audits) using various IT tools for supporting
the achievement of the audit objectives – also referred
to as “IT assisted audits”.
3. Audit of IT Systems
It is an examination of the implementation of IT
systems and IT controls to ensure that the systems
meet the organization's business needs without
compromising security, privacy, cost, and other
critical business elements. It crucially also determines
areas such as whether, and to what extent, the data
can be relied upon as a single source of truth, for
purposes of audit.
4. Aspects that may be covered as part of the audit
scope could illustratively include:
IT governance and management and planning for IT
systems;
Acquisition, development and implementation of an IT
system;
Application controls for an IT system;
Operations and maintenance (including change
management) of an existing IT system;
IT outsourcing (including addressing vendor lock-in and
exit management);
Information security and risk management for IT
systems;
Disaster recovery and business continuity planning for IT
systems;
5. IT assisted audits
Adequacy and effectiveness of IT and non IT controls
for ensuring data integrity and non-repudiability of
such data may be duly considered by the audit office,
while examining the reliability of such data.
The insights which may be drawn from data analysis/
analytics include, but are not limited to, exceptions,
trends, patterns, deviations, inconsistencies, and
relationships among data elements identified through
analysis, modeling or visualization, can be used while
planning, conducting and reporting audits.
6. Right of access to Audit and
Responsibilities of the auditable
entity
Audit may requisition basic records, data, information
and documents, from the auditable entity, as soon as
intimation for audit is given, to enable a systematic review
and commence the audit assignment remotely by accessing
such information ahead of visits to the auditable entity.
In case information and data as requested cannot be
made available in advance, the officer in charge at the
auditable entity shall ensure that the basic records, data,
information and documents as required in the requisition
sent to him by the Audit, are kept ready before the arrival
of the audit team.
7. CONT..
The auditable entity will be responsible for ensuring
completeness and reliability of data provided to Audit.
The auditable entity shall provide access to its information
systems and data as requested by Audit, irrespective of the
fact whether the systems are owned, maintained and
operated by the auditable entity or by any other agency on
behalf of the auditable entity. Such access maybe through
interfacing the IT system of the audit office with the
audited entity’s IT systems or establishing alternative
equivalent methods of data access for the audit office.
8. Failure to provide data,
information and documents
Cases of failure to provide data, information and
documents shall be immediately reported by the audit
office to the controlling officer and suitably to the
concerned Government/ Ministry, including Secretary of
the Department in case of Government of India or Chief
Secretary of the State for appropriate action. These
authorities shall ensure that requisite access to data,
information and documents is provided to Audit within the
prescribed time frame and inform the concerned Audit
office accordingly.
9. Audit of Expenditure
and Receipts
The basic principles of audit of expenditure incurred
from the Consolidated Fund apply mutatis mutandis
to transactions relating to the Public Account and
Contingency Fund.
Audit all receipts of the Government of India payable
into the Consolidated Fund of India and of each State
and of each Union Territory having a legislative
assembly, and to satisfy himself that the rules and
procedures are designed to secure an effective check
on the assessment, collection and proper allocation of
revenue and are being duly observed.
10. CONT..
Audit of receipts and expenditure is comprehensive and is
carried out in the nature of financial audit, compliance
audits, performance audits and any combinations thereof.
Audit checks include whether financial
statements/accounts of the Government are in compliance
with the prescribed financial accounting framework,
applicable laws, rules and regulations and accounting
principles, policies and applicable standards including
conformity with the form of accounts prescribed by the
President on the advice of the Comptroller and Auditor
General; Audit also checks for relevant assertions, such as
completeness, occurrence, measurement, disclosure,
regularity, existence, valuation and ownership.
11. Broad framework of Audit of
Expenditure
Audit of expenditure examines and verifies whether
adequate, proper and sound systems and procedures
are in place and are being complied with, both in letter
and spirit, for spending public money.
12. Broad framework of Audit of
Receipts
Assessment, collection and allocation of revenue by the tax
department
Prompt investigation of losses of revenue through fraud,
default or mistake including, if required, through the
review of other similar cases;
Any measures introduced to strengthen or improve
revenue administration;
Achievement of targets, accounting and reporting of
receipts and their cross verification and reconciliation with
the accounts records;
The grievance readdress machinery/ mechanism in place
within the department for resolution of taxpayer grievances
and complaints.
13. Audit of stores and stock
Audit of stores and stock involves verifying that adequate and
sound systems and procedures are in place and complied with
for:
establishment of the need for procurement of stores;
proper assessment of requirement of stores, including, where
applicable, determination of reserve stock limits;
authorization of procurement of stores;
procurement of stores in a cost-effective manner in accordance
with the prescribed systems and procedures;
14. Cont..
Receipt, inspection, custody, issue and accounting of
stores including appropriate segregation of duties of
personnel and reconciliation of store accounts with books
of accounts;
verification of physical balances at prescribed intervals,
and reconciliation and resolution of discrepancies
between physical balances and balances as per the
records without delay; and
Identification of obsolete and surplus stores, their
disposal by way of sale and/or transfer to other units,
divisions, etc. and accounting of corresponding receipts,
or write off after proper investigation
15. Audit of grants-in-aid
and loans
Audit of grants-in-aid and loans is primarily an
extension of audit of expenditure and the broad
principles of audit of expenditure shall apply.
Additionally, it examines whether the amount of
Government assistance is utilized for the intended
purpose.
17. Broad framework of financial
audit of Government
The Comptroller and Auditor General examines and certifies the Finance
Accounts and the Appropriation Accounts of the Union and of each State
and the Union Territory having a legislative assembly, irrespective of the
agency that is responsible for their compilation.
The Finance Accounts of the Government show the receipts and
disbursements of the Government for the financial year, together with the
financial results disclosed by the revenue and capital accounts, the accounts
relating to public debt and assets and other liabilities as prescribed.
The Appropriation Accounts of the Government show the expenditure of
the Government compared with the amounts authorized by the legislature
with explanations for significant variations between the two byway of
saving or excess beyond the prescribed limits of such variations.
Financial audit is carried out as per Auditing Standards, manuals, guidelines
and other relevant orders issued by the Comptroller and Auditor General.
18. Broad framework of
Compliance Audit
Compliance audit is carried out in accordance with the
Auditing Standards, Compliance auditing guidelines and
other relevant orders issued by the Comptroller and
Auditor General.
Compliance auditing is concerned with
Regularity (adherence to formal criteria such as provisions of the
Constitution of India, relevant laws, rules, regulations, orders,
instructions and agreements etc)
Propriety (observance of the general principles, governing
sound financial management and the conduct of public officials).
19. Cont..
Compliance audit also involves examination of the rules, regulations,
orders, transactions and instructions themselves for their legality,
adequacy, transparency, propriety and prudence and effectiveness that is
whether these are:
introverts the provisions of the Constitution of India and the laws
(legality);
sufficiently comprehensive and ensure effective control over
Government receipts, expenditure, assets and liabilities with sufficient
safeguards against loss due to waste, misuse, mismanagement, errors,
frauds and other irregularities (adequacy);
consistent, clear and free from ambiguity and promote observance of
probity in decision making (transparency);
judicious and wise (propriety and prudence); and
implemented in a manner that meets the intended objective
When compliance auditing is part of a performance audit, compliance is
seen as one of the aspects of economy, efficiency and effectiveness.
Noncompliance may be the cause of, an explanation for, or a consequence
of the state of the activities that are the subject matter of the performance
audit.
20. Broad framework of
Performance Audit
Performance audit is carried out in accordance with the
Auditing Standards, Performance auditing guidelines and
other relevant orders issued by the Comptroller and Auditor
General.
Performance audit assesses:
Economy – The principle of economy means minimizing the costs of resources.
The resources used should be available in due time, in and of appropriate
quantity and quality and at the best price.
Efficiency – The principle of efficiency means getting the most from the
available resources. It is concerned with the relationship between resources
employed and outputs delivered in terms of quantity, quality and timing.
Effectiveness – The principle of effectiveness concerns meeting the objectives
set and achieving the intended results, especially in terms of outputs and
outcomes. For example, expenditure on health schemes/ programmers such as
NHM should lead to the intended outputs of having hospitals/ CHC etc, having
the desired number of hospital beds etc; it should also have the outcomes as
intended and/or stated such as delivery of effective health schemes.
21. Cont..
Performance Audit, therefore, is concerned with the audit of economy,
efficiency and effectiveness in receipt and application of public funds.
Comptroller and Auditor General’s function to carry out examinations into
the efficiency and effectiveness with which the Government uses it
resources is inbuilt in the Comptroller and Auditor General’s DPC Act.
In keeping with Regulation 5(3), Performance Audit focuses on inputs,
processes, including planning and preparedness, (for example disaster
preparedness etc), outputs, outcomes (for example learning outcomes in
school education) and results. The analyses in Performance Audit is distinct
from, and goes beyond, compliance issues, and seeks to provide new
information, analysis or insights on the actual benefit of the activity
undertaken by the entity. Where appropriate, the impact of the regulatory,
institutional or operational framework on the performance of the audited
entity or subject matter of Performance Audit should also be taken into
account as part of Performance Audit
22. Audit of Government Companies
Mandate of the Comptroller and Auditor General in regard to the
audit of Government companies
As per section 19 of the Act, the duties and powers of the Comptroller
and Auditor General in relation to the audit of accounts of Government
companies shall be performed and exercised by him in accordance with
the provisions of the Companies Act, 2013.
Appointment of statutory auditor
As per Section 139 (5) and 139 (7) of the Companies Act, 2013 the
Statutory Auditors of a Government company or any other company, is
to be appointed by the Comptroller and Auditor General.
The Comptroller and Auditor General shall appoint the statutory
auditor for a financial year through a process of selection as may be
prescribed and thereafter, subject to the following Regulations; re-
appoint him on year to year basis unless special circumstances warrant
appointment for a longer period. The total period of appointment
including the initial appointment should not ordinarily exceed four
financial years. The appointment shall be subject to such terms and
conditions as may be prescribed from time to time and available on
Comptroller and Auditor General’s website.
23. Cont..
Role of the Comptroller and Auditor General with regard to
audit by statutory auditor
The Comptroller and Auditor General is authorized to direct the
manner in which the statutory auditor shall audit the accounts of
Government company or any other company and to give to such
auditor directions. The statutory auditor shall submit a copy of
his report to the Comptroller and Auditor General and which
shall, among other things, include the directions, if any, issued
by the Comptroller and Auditor General, the action taken
thereon and its impact on the accounts and financial statements
of the company. The Comptroller and Auditor General shall
within sixty days from the date of receipt of the above audit
report have a right to:
conduct a supplementary audit of the financial statement
of the company; and
comment upon or supplement such audit report.
24. Audit of Bodies and Authorities
Role of the Comptroller and Auditor General in
audit of Panchayati Raj Institutions and Urban
Local Bodies