Toheed Alam _ Chapter9
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The document discusses the steps an auditor should take when auditing different types of business concerns. The auditor should verify receipts and payments, cash balances, closing stock, depreciation methods, debtors and creditors, provisions, investments, contingent liabilities, sales, taxation provisions, capital vs revenue expenditures, unusual expenses, and legal formalities. The auditor should also check resolutions, previous audit reports, wages, prepaid/accrued items, and agreements.
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1.1
This document provides an overview of accounting concepts and processes. It begins with introductory information about accounting rules, basic processes, terminology, and objectives. It then discusses the accounting equation, different types of accounts, rules of debit and credit, journal entries, ledger posting, trial balances, and year-end adjustment entries. The purpose is to familiarize students with the fundamental principles and steps of accounting.
Practical Auditing
Vouching is the process by which an auditor examines documentary evidence to verify transactions recorded in accounting books. It involves substantiating entries with evidence like receipts, invoices, contracts, and ensuring transactions are properly authorized, recorded, and classified. The objectives of vouching are to verify genuineness of transactions, ensure all business transactions are recorded, authenticate documentary evidence, and check for fraudulent payments. Vouchers provide documentary evidence to support transactions, and can be primary documents like invoices or secondary documents like copies. Important aspects of vouching cash receipts include verifying serially numbered receipts, ensuring timely recording of receipts, and authorization of discounts.
Statement of Financial Position
1. Equipment P 15,000
2. Annual depreciation P 3,000
3. Accumulated depreciation as of Dec 31, 2016 (P 3,000 x 2 years) P 6,000
4. Net book value of Equipment as of Dec 31, 2016 (P 15,000 - P 6,000) P 9,000
Statement of Financial Position
Vouching of cash transactions
This document provides information on the process of vouching in accounting. It defines vouching as comparing accounting entries to supporting documents like receipts. It then discusses vouching for different types of cash transactions recorded in the cash book, including opening balances, cash sales, payments to creditors, and payments for expenses. For each transaction type, it lists the supporting documents that should be examined to verify the entry, such as cash memos, invoices, pay stubs, and receipts. The document provides guidance on steps an auditor should take to properly voucher transactions during an audit.
Accounting Equation Transaction Sample
The document discusses the accounting equation and how business transactions affect the equation. The accounting equation is Assets = Equities, where equities are made up of liabilities and proprietorship. Several examples are provided of different types of business transactions and how each affects the accounting equation by increasing or decreasing assets, liabilities, and proprietorship.
Vouching and Verification
The document discusses procedures for verifying and auditing various expenses and incomes. It provides guidance on examining documentary evidence for transactions like payments of taxes, customs duties, salaries, travel expenses, capital receipts, interest income and verification of assets like plant and machinery, land and buildings, investments and more. The auditor is advised to check documents like invoices, bills, receipts, registers, title deeds to validate transactions and asset ownership, value and existence.
Vouching and voucher
1. Vouching involves establishing the accuracy and authenticity of accounting entries by examining documentary evidence supporting transactions.
2. A voucher is documentary evidence of a transaction, such as a receipt, invoice, or agreement.
3. The auditor must carefully examine vouchers to ensure they are properly numbered, dated, approved, and relate to the business. Attention should be paid to amounts, accounts, and names.
6. vouching
Vouchers provide documentary evidence of transactions recorded in accounting books. Auditors examine vouchers to verify transactions are valid, authorized, and correctly recorded. The extent of vouching depends on the strength of the company's internal controls - stronger controls allow auditors to check a sample rather than all transactions. Vouching typically involves two people comparing details in books to supporting documents. Cut-off procedures ensure physical inventory and account balances agree by properly accounting for stock movements and sales/purchases around the reporting date.
Recommended
1.1
This document provides an overview of accounting concepts and processes. It begins with introductory information about accounting rules, basic processes, terminology, and objectives. It then discusses the accounting equation, different types of accounts, rules of debit and credit, journal entries, ledger posting, trial balances, and year-end adjustment entries. The purpose is to familiarize students with the fundamental principles and steps of accounting.
Practical Auditing
Vouching is the process by which an auditor examines documentary evidence to verify transactions recorded in accounting books. It involves substantiating entries with evidence like receipts, invoices, contracts, and ensuring transactions are properly authorized, recorded, and classified. The objectives of vouching are to verify genuineness of transactions, ensure all business transactions are recorded, authenticate documentary evidence, and check for fraudulent payments. Vouchers provide documentary evidence to support transactions, and can be primary documents like invoices or secondary documents like copies. Important aspects of vouching cash receipts include verifying serially numbered receipts, ensuring timely recording of receipts, and authorization of discounts.
Statement of Financial Position
1. Equipment P 15,000
2. Annual depreciation P 3,000
3. Accumulated depreciation as of Dec 31, 2016 (P 3,000 x 2 years) P 6,000
4. Net book value of Equipment as of Dec 31, 2016 (P 15,000 - P 6,000) P 9,000
Statement of Financial Position
Vouching of cash transactions
This document provides information on the process of vouching in accounting. It defines vouching as comparing accounting entries to supporting documents like receipts. It then discusses vouching for different types of cash transactions recorded in the cash book, including opening balances, cash sales, payments to creditors, and payments for expenses. For each transaction type, it lists the supporting documents that should be examined to verify the entry, such as cash memos, invoices, pay stubs, and receipts. The document provides guidance on steps an auditor should take to properly voucher transactions during an audit.
Accounting Equation Transaction Sample
The document discusses the accounting equation and how business transactions affect the equation. The accounting equation is Assets = Equities, where equities are made up of liabilities and proprietorship. Several examples are provided of different types of business transactions and how each affects the accounting equation by increasing or decreasing assets, liabilities, and proprietorship.
Vouching and Verification
The document discusses procedures for verifying and auditing various expenses and incomes. It provides guidance on examining documentary evidence for transactions like payments of taxes, customs duties, salaries, travel expenses, capital receipts, interest income and verification of assets like plant and machinery, land and buildings, investments and more. The auditor is advised to check documents like invoices, bills, receipts, registers, title deeds to validate transactions and asset ownership, value and existence.
Vouching and voucher
1. Vouching involves establishing the accuracy and authenticity of accounting entries by examining documentary evidence supporting transactions.
2. A voucher is documentary evidence of a transaction, such as a receipt, invoice, or agreement.
3. The auditor must carefully examine vouchers to ensure they are properly numbered, dated, approved, and relate to the business. Attention should be paid to amounts, accounts, and names.
6. vouching
Vouchers provide documentary evidence of transactions recorded in accounting books. Auditors examine vouchers to verify transactions are valid, authorized, and correctly recorded. The extent of vouching depends on the strength of the company's internal controls - stronger controls allow auditors to check a sample rather than all transactions. Vouching typically involves two people comparing details in books to supporting documents. Cut-off procedures ensure physical inventory and account balances agree by properly accounting for stock movements and sales/purchases around the reporting date.
Interim visit 2
This document outlines internal controls for the purchasing and payment process. It identifies potential misstatements at each step, from requisitioning goods to recording liabilities. For each step, it lists necessary controls to prevent or detect errors, such as requiring purchase requisitions and purchase orders that are pre-numbered and approved. It also lists possible tests of controls, such as examining documentation and observing employee performance.
Interim visit 1
Typical errors in accounts receivable and credit sales include incorrectly recorded sales amounts, goods shipped but not billed, goods billed but not shipped, and sales recorded in the wrong period. An internal control questionnaire identifies controls over credit approval of customers, order acceptance, goods delivery, invoicing, and cash receipt posting to ensure accurate financial reporting. Weaknesses identified include a lack of goods monitoring, weak goods checking, a lack of segregation of duties, and easy vault access. Recommendations include implementing documents to check goods availability, having both the loader and deliverer check goods, properly segregating duties among staff, and restricting vault access.
Vouching
The document discusses the process of vouching during an audit. It can be summarized as:
1. Vouching involves carefully examining original documents like invoices, receipts, correspondence, minutes and contracts to verify the accuracy of entries in the books of accounts and detect any omitted transactions.
2. The auditor checks that vouchers are properly arranged, dates are correct, signatures show proper authority, there are no alterations, words match figures, transactions relate to the business, account heads are accurate, and revenue stamps are correct.
3. The goal of vouching is to verify the truth and accuracy of book entries, ensure no fraud has occurred, and allow the auditor to certify the accounts as correct
Vouching
Vouching involves examining documentary evidence to verify transactions recorded in accounting books. It establishes the accuracy and authenticity of entries.
Some key aspects of vouching include checking that vouchers are numbered and cancelled, examining high risk transactions like those with owners, and verifying dates, amounts, and names match the cash book. The auditor must also consider the nature of payments.
Vouching is important as it forms the basis for further audit work and fulfills the purpose of checking entries. It helps ensure transactions are valid, correctly recorded, and supported by evidence. This detects errors and potential fraud.
Journalising
This document discusses journalizing transactions in accounting. It explains that journalizing involves recording transactions in a journal and covers the rules of debit and credit for personal, real, and nominal accounts. Personal accounts include natural, artificial, and representative accounts. Real accounts are tangible and intangible assets. Nominal accounts include expenses/losses and incomes/gains. The document provides examples of journal entries and discusses subdivisions of journals, including general, cash, purchases, and sales journals. It also covers opening, adjusting and closing entries that are recorded in the general journal.
Final visit receivables
The document outlines an audit program for testing trade receivables for Sheridan AV for the year ending March 31, 2021. Substantive testing is to be carried out on the statement of financial position to assess presentation and disclosure, accuracy/classification/valuation, rights and obligations, completeness and cut-off, and existence. Tests include vouching samples of receivables to supporting documentation, testing bad debt provisions, and cut-off testing of sales and returns. A trade receivables circularization is also to be performed. The auditor notes issues with amounts presented, calculations, and lack of support for bad debts, but otherwise the receivables appear fairly stated subject to matters highlighted.
Type of voucher
This document discusses various types of vouching procedures an auditor should perform when auditing different accounts and transactions. It covers vouching of primary documents and collateral documents, cash sales, rent receivable, dividends received, interest receipts, sale of investments, payments to creditors, capital expenditures, trading transactions like purchases and returns. The auditor needs to check supporting documents, calculations, authorization and proper recording of transactions.
Auditing Chapter III --
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.
Chapter 2 statement of comprehensive income
The document discusses the Statement of Comprehensive Income (SCI). It provides 6 learning objectives about understanding the SCI. It then describes the SCI as reporting the results of a company's operations for an accounting period, including revenue, costs, and income. It notes the SCI is prepared first and the bottom line is transferred to other statements. The document outlines the key components of the SCI, including revenues, expenses, and how they are defined and classified. It provides examples of revenue from services and sales to illustrate preparing the SCI.
Practical auditing
An auditor faces various liabilities for negligence or misconduct in performing their duties. They can be held civilly liable for damages caused by negligence in auditing, such as failing to detect errors or fraud. Auditors are also liable for misfeasance, which is a breach of duty or trust that causes loss to the company. Criminal liability may also exist under statutes like the Companies Act or Income Tax Act for offenses such as falsifying documents or aiding tax evasion. An auditor can also face penalties for professional misconduct from regulatory bodies as well as potential liability to third parties who rely on the audited financial statements.
Reason for the audit letter
- Private and public limited companies in India must undergo annual audits of their financial statements by a chartered accountant. This process ensures compliance with legal requirements and proper accounting practices.
- The statutory duties of an auditor include giving an independent opinion on the accuracy of the company's financial statements and assessing if they were prepared according to accounting standards. The auditor must also check for compliance with relevant laws.
- Company directors are responsible for preparing accurate financial statements according to International Financial Reporting Standards and for making sure proper accounting records are maintained. They must also safeguard company assets and take steps to prevent fraud.
- Regular audits provide several advantages like ensuring compliance, improving business systems, enhancing credibility with stakeholders, detecting
Vouching of subsidiary books
Vouching involves verifying book entries against source documents like invoices and receipts. When vouching purchase books, checks include examining invoices for supplier name, goods received, and approval. Purchase return books are vouched by checking debit notes and goods records. For sales books, checks involve verifying invoices, order books, dispatch records, and asset sales. Sales return books are vouched by examining credit notes and goods received records to validate returned item details and postings.
Unit 5 vouching
This document discusses the process of vouching in auditing. It defines vouching as verifying the authenticity and authority of transactions recorded in accounting books by comparing them to supporting documentation. The key types of vouchers and objectives of vouching are ensuring transactions are correctly recorded, supported by evidence, and properly authorized. Vouching is an important audit procedure for examining transactions in cash books, subsidiary books, journals, and ledgers.
Final visit cash
The auditor carried out substantive testing on Sheridan AV's cash balances as of March 31, 2021. Tests included calculating ratios, checking prior year balances, reperforming the bank reconciliation, requesting a bank confirmation letter, and confirming reconciling items. The bank confirmation did not match the cash book balance, and there were cash and checks held outside the bank. Subject to resolving these matters, the auditor concluded that cash was fairly stated.
Final visit nca
The document is an audit programme for non-current assets for Sheridan AV for the year ending March 31, 2021. It outlines the audit assertions to be tested, including presentation and disclosure, accuracy/classification/valuation, rights and obligations, completeness and cut-off, and existence/occurrence. Tests are described to check the non-current asset balances, additions, disposals, depreciation calculations, and physical verification of assets. Issues were noted regarding presentation of figures and lack of information in depreciation reports. Subject to these matters, the auditor confirms non-current assets are fairly stated.
Financial statement
The document provides information about financial statements including profit and loss account and balance sheet. It discusses the preparation, components, and purpose of profit and loss account and balance sheet. Some key points include:
1) Profit and loss account is prepared to ascertain the net profit or loss of a business over an accounting period. It includes income and expenses that are used to determine the net profit or loss.
2) Balance sheet provides the financial position of a business on a particular date by listing assets, liabilities, and capital. It categorizes assets as current and fixed and liabilities as current and long term.
3) Various items included in the profit and loss account and balance sheet are explained such as treatment
Basis accounting procedure
I have made a PPT on introduction to accounting and basic accounts..
Pls check the enclosure..
Hope this will be useful for non-accounts student..
Acct chapter 14
The document discusses the operating cycle and accounting process for merchandising businesses that purchase inventory for resale, including how to record sales, cash receipts, accounts receivable, sales returns, and cash/sales discounts. It introduces the merchandise inventory, sales, and sales returns and allowances accounts, and explains how to maintain an accounts receivable subsidiary ledger to track customer accounts.
Chapter 3 vouching
This document discusses the process of vouching in accounting. It defines a voucher as documentary evidence that supports an accounting transaction. The main objectives of vouching are to detect errors and frauds, verify the accuracy of accounts, and ensure that all transactions are authorized. When vouching, the auditor examines documents to check for proper evidence of transactions, verification of amounts and time periods, and that the transactions are related to the business. Vouching of source documents and ledger accounts is a key part of the auditing process, as it helps validate the accuracy of financial records.
PRINCIPLES AND PRACTICE OF AUDITING.
The document provides information on auditing educational institutions, insurance companies, and cooperative societies. It discusses the key tasks of auditors for these different entities. For educational institutions, the auditor should verify items like fees collected, grants, donations, expenses, and assets. For insurance companies, the auditor's duties include examining policies, premiums, claims, investments, and ensuring compliance with insurance laws. Cooperative society audits involve verifying loans, interest, repayments, adherence to by-laws, and reporting irregularities to registrars. The document outlines the specific procedures and checks auditors must perform for each type of audit.
Audits of Different types of Entity
Advanced audit
For downloading this contact- bikashkumar.bk100@gmail.com
Prepared by Students of University of Rajshahi
Final project of auditing
The document discusses the history, meaning, purpose, need and process of auditing. It begins with the history of auditing originating from merchants assigning transactions to be heard to detect fraud. The main purposes of auditing are to check the true and fair view of accounting records and detect errors and frauds. An audit is needed when ownership is separate from management and transactions are numerous. The auditor's role is to examine transactions, verify assets/liabilities, and prepare a report. Key steps in an audit include appointment confirmation, engagement letters, understanding the business, risk assessment, determining materiality, and developing an audit plan.
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Interim visit 2
This document outlines internal controls for the purchasing and payment process. It identifies potential misstatements at each step, from requisitioning goods to recording liabilities. For each step, it lists necessary controls to prevent or detect errors, such as requiring purchase requisitions and purchase orders that are pre-numbered and approved. It also lists possible tests of controls, such as examining documentation and observing employee performance.
Interim visit 1
Typical errors in accounts receivable and credit sales include incorrectly recorded sales amounts, goods shipped but not billed, goods billed but not shipped, and sales recorded in the wrong period. An internal control questionnaire identifies controls over credit approval of customers, order acceptance, goods delivery, invoicing, and cash receipt posting to ensure accurate financial reporting. Weaknesses identified include a lack of goods monitoring, weak goods checking, a lack of segregation of duties, and easy vault access. Recommendations include implementing documents to check goods availability, having both the loader and deliverer check goods, properly segregating duties among staff, and restricting vault access.
Vouching
The document discusses the process of vouching during an audit. It can be summarized as:
1. Vouching involves carefully examining original documents like invoices, receipts, correspondence, minutes and contracts to verify the accuracy of entries in the books of accounts and detect any omitted transactions.
2. The auditor checks that vouchers are properly arranged, dates are correct, signatures show proper authority, there are no alterations, words match figures, transactions relate to the business, account heads are accurate, and revenue stamps are correct.
3. The goal of vouching is to verify the truth and accuracy of book entries, ensure no fraud has occurred, and allow the auditor to certify the accounts as correct
Vouching
Vouching involves examining documentary evidence to verify transactions recorded in accounting books. It establishes the accuracy and authenticity of entries.
Some key aspects of vouching include checking that vouchers are numbered and cancelled, examining high risk transactions like those with owners, and verifying dates, amounts, and names match the cash book. The auditor must also consider the nature of payments.
Vouching is important as it forms the basis for further audit work and fulfills the purpose of checking entries. It helps ensure transactions are valid, correctly recorded, and supported by evidence. This detects errors and potential fraud.
Journalising
This document discusses journalizing transactions in accounting. It explains that journalizing involves recording transactions in a journal and covers the rules of debit and credit for personal, real, and nominal accounts. Personal accounts include natural, artificial, and representative accounts. Real accounts are tangible and intangible assets. Nominal accounts include expenses/losses and incomes/gains. The document provides examples of journal entries and discusses subdivisions of journals, including general, cash, purchases, and sales journals. It also covers opening, adjusting and closing entries that are recorded in the general journal.
Final visit receivables
The document outlines an audit program for testing trade receivables for Sheridan AV for the year ending March 31, 2021. Substantive testing is to be carried out on the statement of financial position to assess presentation and disclosure, accuracy/classification/valuation, rights and obligations, completeness and cut-off, and existence. Tests include vouching samples of receivables to supporting documentation, testing bad debt provisions, and cut-off testing of sales and returns. A trade receivables circularization is also to be performed. The auditor notes issues with amounts presented, calculations, and lack of support for bad debts, but otherwise the receivables appear fairly stated subject to matters highlighted.
Type of voucher
This document discusses various types of vouching procedures an auditor should perform when auditing different accounts and transactions. It covers vouching of primary documents and collateral documents, cash sales, rent receivable, dividends received, interest receipts, sale of investments, payments to creditors, capital expenditures, trading transactions like purchases and returns. The auditor needs to check supporting documents, calculations, authorization and proper recording of transactions.
Auditing Chapter III --
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.
Chapter 2 statement of comprehensive income
The document discusses the Statement of Comprehensive Income (SCI). It provides 6 learning objectives about understanding the SCI. It then describes the SCI as reporting the results of a company's operations for an accounting period, including revenue, costs, and income. It notes the SCI is prepared first and the bottom line is transferred to other statements. The document outlines the key components of the SCI, including revenues, expenses, and how they are defined and classified. It provides examples of revenue from services and sales to illustrate preparing the SCI.
Practical auditing
An auditor faces various liabilities for negligence or misconduct in performing their duties. They can be held civilly liable for damages caused by negligence in auditing, such as failing to detect errors or fraud. Auditors are also liable for misfeasance, which is a breach of duty or trust that causes loss to the company. Criminal liability may also exist under statutes like the Companies Act or Income Tax Act for offenses such as falsifying documents or aiding tax evasion. An auditor can also face penalties for professional misconduct from regulatory bodies as well as potential liability to third parties who rely on the audited financial statements.
Reason for the audit letter
- Private and public limited companies in India must undergo annual audits of their financial statements by a chartered accountant. This process ensures compliance with legal requirements and proper accounting practices.
- The statutory duties of an auditor include giving an independent opinion on the accuracy of the company's financial statements and assessing if they were prepared according to accounting standards. The auditor must also check for compliance with relevant laws.
- Company directors are responsible for preparing accurate financial statements according to International Financial Reporting Standards and for making sure proper accounting records are maintained. They must also safeguard company assets and take steps to prevent fraud.
- Regular audits provide several advantages like ensuring compliance, improving business systems, enhancing credibility with stakeholders, detecting
Vouching of subsidiary books
Vouching involves verifying book entries against source documents like invoices and receipts. When vouching purchase books, checks include examining invoices for supplier name, goods received, and approval. Purchase return books are vouched by checking debit notes and goods records. For sales books, checks involve verifying invoices, order books, dispatch records, and asset sales. Sales return books are vouched by examining credit notes and goods received records to validate returned item details and postings.
Unit 5 vouching
This document discusses the process of vouching in auditing. It defines vouching as verifying the authenticity and authority of transactions recorded in accounting books by comparing them to supporting documentation. The key types of vouchers and objectives of vouching are ensuring transactions are correctly recorded, supported by evidence, and properly authorized. Vouching is an important audit procedure for examining transactions in cash books, subsidiary books, journals, and ledgers.
Final visit cash
The auditor carried out substantive testing on Sheridan AV's cash balances as of March 31, 2021. Tests included calculating ratios, checking prior year balances, reperforming the bank reconciliation, requesting a bank confirmation letter, and confirming reconciling items. The bank confirmation did not match the cash book balance, and there were cash and checks held outside the bank. Subject to resolving these matters, the auditor concluded that cash was fairly stated.
Final visit nca
The document is an audit programme for non-current assets for Sheridan AV for the year ending March 31, 2021. It outlines the audit assertions to be tested, including presentation and disclosure, accuracy/classification/valuation, rights and obligations, completeness and cut-off, and existence/occurrence. Tests are described to check the non-current asset balances, additions, disposals, depreciation calculations, and physical verification of assets. Issues were noted regarding presentation of figures and lack of information in depreciation reports. Subject to these matters, the auditor confirms non-current assets are fairly stated.
Financial statement
The document provides information about financial statements including profit and loss account and balance sheet. It discusses the preparation, components, and purpose of profit and loss account and balance sheet. Some key points include:
1) Profit and loss account is prepared to ascertain the net profit or loss of a business over an accounting period. It includes income and expenses that are used to determine the net profit or loss.
2) Balance sheet provides the financial position of a business on a particular date by listing assets, liabilities, and capital. It categorizes assets as current and fixed and liabilities as current and long term.
3) Various items included in the profit and loss account and balance sheet are explained such as treatment
Basis accounting procedure
I have made a PPT on introduction to accounting and basic accounts..
Pls check the enclosure..
Hope this will be useful for non-accounts student..
Acct chapter 14
The document discusses the operating cycle and accounting process for merchandising businesses that purchase inventory for resale, including how to record sales, cash receipts, accounts receivable, sales returns, and cash/sales discounts. It introduces the merchandise inventory, sales, and sales returns and allowances accounts, and explains how to maintain an accounts receivable subsidiary ledger to track customer accounts.
Chapter 3 vouching
This document discusses the process of vouching in accounting. It defines a voucher as documentary evidence that supports an accounting transaction. The main objectives of vouching are to detect errors and frauds, verify the accuracy of accounts, and ensure that all transactions are authorized. When vouching, the auditor examines documents to check for proper evidence of transactions, verification of amounts and time periods, and that the transactions are related to the business. Vouching of source documents and ledger accounts is a key part of the auditing process, as it helps validate the accuracy of financial records.
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The document discusses the history, meaning, purpose, need and process of auditing. It begins with the history of auditing originating from merchants assigning transactions to be heard to detect fraud. The main purposes of auditing are to check the true and fair view of accounting records and detect errors and frauds. An audit is needed when ownership is separate from management and transactions are numerous. The auditor's role is to examine transactions, verify assets/liabilities, and prepare a report. Key steps in an audit include appointment confirmation, engagement letters, understanding the business, risk assessment, determining materiality, and developing an audit plan.
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Auditing,types of auditing,accounting,investigation,report writing,control ma...
Auditing,types of auditing,accounting,investigation,report writing,control ma...DevadattaSai Cheedella
https://docs.google.com/document/d/1zEkd2797JdYpcDbm_NSlHwthwRLy-jCVCY-Udc4NZOA/edit?usp=sharing
auditingUNIT-1 (AFM).ppt
This document provides an overview of key accounting concepts and terms:
- It defines assets, liabilities, capital, revenues, expenses, purchases, sales and stock/inventory. It distinguishes between current and long-term assets/liabilities.
- It explains the basic accounting equation of assets = liabilities + capital and the dual aspect of transactions.
- It outlines important accounting concepts like business entity, money measurement, cost, going concern and accounting period, as well as conventions like consistency, disclosure and conservation.
- It introduces the accounting cycle and classification of accounts into personal, real and nominal.
Auditing
IT CONTAINS BASICS OF AUDIT AND AUDITOR
MEANING OF AUDIT, DEFINITION, ORIGIN AND DEVELOPMENT, TYPES OF AUDIT, DIFFERENCE BETWEEN ACCOUNT AND AUDIT, AUDITOR
IT WILL HELP THE STUDENTS TO UNDERSTAND THE BASIC OF AUDIT.
Statement of Financial Position (SFP) - Chapter 1
The document discusses various asset accounts including cash, receivables, inventory, and prepaid expenses. It provides details on what each asset includes, such as cash including cash on hand and in bank accounts, receivables arising from credit sales and loans, inventory for goods held for resale, and prepaid expenses for items paid in advance like insurance. Examples are given for each type of asset to illustrate the accounting concepts.
Similar to Toheed Alam _ Chapter9 (20)
Auditing,types of auditing,accounting,investigation,report writing,control ma...
Auditing,types of auditing,accounting,investigation,report writing,control ma...
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Toheed Alam _ Chapter9
- 1. The business concerns can be classified into manufacturing, financial and non profit organizations. The textile mills and sugar mill are treated as manufactures of products for consumers. The banks and insurance companies are financial institutions they provide variety of services to the customers. Club is a non profit concern. 01:32 PM
- 2. The income statements and balance sheets are prepared in different ways . Many new institutions like textile mills, paper mills, newspaper , companies, cinemas and hotels carry on different nature of transaction that arise due to routine working. 01:32 PM
- 3. The banks are registered under the companies ordinance 1984. The working of banks as governed by banking companies ordinance 1962. Insurance companies act 1938. The sugar mills and textile mill are operating under companies ordinance 1984. 01:32 PM
- 4. COMMON POINTS of various concerns What steps should be taken by an auditor while auditing ------------ concern? Or special points involved in the audit of different concerns. 01:32 PM
- 5. 2.COPY OF RESOLUTION: the auditor should check that all those decisions that were decided are implemented and rules and regulations are followed in completion of accounts. 3.PREVIOUS YEAR AUDIT REPORT: The auditor should check the previous audit report and if any qualification found he should pay special attention towards it. 01:32 PM
- 6. 4.Verification of RECEIPTS: The auditor should check the receipts of cash from various sources. He should see that correct amount has been entered. 5.Verification of PAYMENTS: The auditor should check the payments made to various parties. He must verify that all expenses made were for the business purposes . 01:32 PM
- 7. 6.Verfication of CASH IN HAND: The auditor should examine the cash in hand with the cash book and petty cash book. The actual cash must tally with cash book figures. 7.BANK BALANCE: The auditor should verify the bank balance with the certificates obtained from the banks and with the help of pass book. 01:32 PM
- 8. 8.CLOSING STOCK: The auditor should see that the stock in hand has been valued properly as shown in the balance sheet. 9.DEPRECIATION: The auditor should examine that what method and rate is applied for depreciation and either depreciation rate is applied in appropriate manner. He should also examine that is there any amount set aside for this purpose. 01:32 PM
- 9. 10.SUNDRY DEBTORS: The auditor should check the debtor’s name and addresses. He should write letter for confirmation of the balance. 11.SUNDRY CREDITORS: The auditor should verify the creditors of the business concerns and their balances too. 12.PROVISION FOR BAD DEBTS: The auditor must check that the proper provision has been made for bad and doubtful debts in the books of accounts. 01:32 PM
- 10. 13.INVESTMENT: The auditor should verify the existence of investment. It may include shares, debentures, bonds and government securities. The investment should be valued at cost or market price whichever is lower. 14.CONTINGENT LIABILITIES: If there is any contingent liability a foot note must be given in the Balance Sheet indicating what they are. The auditor should also see that either mention liability is really contingent liability. 01:32 PM
- 11. 15.SALES: The auditor should check the entries in the sales journal with the duplicate invoices. He should compare the invoices with the copy of the orders received. 16.PROVISION FOR TAXATION: The auditor should see that adequate provision has been made for the tax payable by the company or any other business organization. 01:32 PM