auditing is an examination of accounting
records undertaken with a view to establish whether they correctly and completely reflect the transactions to which they relate.
auditing is an examination of accounting
records undertaken with a view to establish whether they correctly and completely reflect the transactions to which they relate.
This is presentation on Auditing by my friend Rohin Nadaf which was presented during ITT training of Institute of Chartered Accountants of India (ICAI)
Every company has to mandatorily appoint statutory auditors for examining the true and fair view of the financial statements and to express an opinion on such financial statements. Apart from statutory auditors, there are other types of auditors to be appointed for monitoring the statutory compliances, risk / fraud management system, internal control system and for reviewing the overall performance of the management and various functions in an organisation. The webinar covers the aspects of provisions relating to appointment of statutory auditors/ internal auditors, qualification and eligibility criteria for appointment, statutory compliances and judicial precedents.
There are various types of Audit which are mentioned below: -
Based on Organizational Structure
Statutory Audit
Non-Statutory Audit
Based on Scope
Complete Audit
Partial Audit
Based On Time
Continuous Audit
Final Audit
Interim Audit
Based on Object
Special Audit
Cost Audit
Management Audit
Internal Audit
Social Audit
Tax Audit
Proprietory Audit
Statutory Audit is compulsory audit prescribed under statute i.e. law. Statutory audit is conducted after preparation of final accounts.
Non-Statutory Audit
Non-Statutory Audit is voluntary audit. They are not compulsory under any law.
Complete Audit
In this type of audit, the auditor is required to check each and every transaction recorded in the books of accounts.
Partial Audit
In Partial audit, the auditor is not required to examine all the books of accounts.
Continuous Audit
Continuous Audit means an audit at regular intervals throughout the accounting year.
Final Audit
Generally, it starts after the close of the financial period.
Interim Audit
Interim Audit is an audit conducted in between the annual audits
Special Audit
Central Government has power to order a special audit of the accounts of a company for a specific period.
Cost Audit
It is a type of audit which involves verification of cost records maintained by the organization
Management Audit
Management audit involves examines of the plans, policies, procedure, method and strategies and evaluates the performance of management with a view to improve organizational effectiveness. It does not look into the past, present but also in the future.
Internal Audit
Internal Auditing is a continuous, critical review of financial and other operating activities by a staff of auditors, functioning as full time salaried employees.
This is presentation on Auditing by my friend Rohin Nadaf which was presented during ITT training of Institute of Chartered Accountants of India (ICAI)
Every company has to mandatorily appoint statutory auditors for examining the true and fair view of the financial statements and to express an opinion on such financial statements. Apart from statutory auditors, there are other types of auditors to be appointed for monitoring the statutory compliances, risk / fraud management system, internal control system and for reviewing the overall performance of the management and various functions in an organisation. The webinar covers the aspects of provisions relating to appointment of statutory auditors/ internal auditors, qualification and eligibility criteria for appointment, statutory compliances and judicial precedents.
There are various types of Audit which are mentioned below: -
Based on Organizational Structure
Statutory Audit
Non-Statutory Audit
Based on Scope
Complete Audit
Partial Audit
Based On Time
Continuous Audit
Final Audit
Interim Audit
Based on Object
Special Audit
Cost Audit
Management Audit
Internal Audit
Social Audit
Tax Audit
Proprietory Audit
Statutory Audit is compulsory audit prescribed under statute i.e. law. Statutory audit is conducted after preparation of final accounts.
Non-Statutory Audit
Non-Statutory Audit is voluntary audit. They are not compulsory under any law.
Complete Audit
In this type of audit, the auditor is required to check each and every transaction recorded in the books of accounts.
Partial Audit
In Partial audit, the auditor is not required to examine all the books of accounts.
Continuous Audit
Continuous Audit means an audit at regular intervals throughout the accounting year.
Final Audit
Generally, it starts after the close of the financial period.
Interim Audit
Interim Audit is an audit conducted in between the annual audits
Special Audit
Central Government has power to order a special audit of the accounts of a company for a specific period.
Cost Audit
It is a type of audit which involves verification of cost records maintained by the organization
Management Audit
Management audit involves examines of the plans, policies, procedure, method and strategies and evaluates the performance of management with a view to improve organizational effectiveness. It does not look into the past, present but also in the future.
Internal Audit
Internal Auditing is a continuous, critical review of financial and other operating activities by a staff of auditors, functioning as full time salaried employees.
BCom Auditing and Corporate Governance Notes-1.pdfMystatus4
In this Slides we have Provided BCom Auditing and Corporate Governance most important Questions and Answers with some important Points and notes which helps you to score good marks.
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Auditing is the process of verifying the validity of a company's various financial statements. Many renowned experts have defined auditing from their own perspectives. Below are the thoughts of some of the authors who commented on their respective opinions.
7 Steps to Conducting a Financial Audit | The Enterprise WorldTEWMAGAZINE
Overview of the financial audit process: 1. Preparing for the Audit 2. Assessing Internal Controls 3. Gathering and Reviewing Financial Data 4. Testing Financial Transactions and Balances 5. Summarizing Findings and Preparing Audit Reports 6. Post-Audit Follow-Up 7. Wrapping up
Concept of Auditing B.Com(Hons)/B.Com .pdfUmakantAnnand
Concept of Auditing
The term audit is derived from a Latin word “audire” which means to hear authenticity of accounts is assured with the help of the independent review. Audit is performed to ascertain the validity and reliability of information. Examination of books and accounts with supporting vouchers and documents to detect and prevent error, fraud is the primary function of auditing. Auditor has to check the effectiveness of internal control systems for determining the extent of checking out the audit.Initially its meaning and use were confined merely to cash audit, and the auditor has to ascertain whether the persons are responsible for the maintenance of accounts had adequately accounted for all the cash receipts and the payment on behalf of this principle.
But the word audit has an extensive usage, and it now means a thorough scrutiny of the books of accounts and its ultimate aim is to verify the financial position disclosed by the balance sheet and profit and loss accounts of a company. In short, an audit implies an investigation and a report. The process of checking and vouching continues until the study is completed and the auditor enables himself to report under the terms of his appointment
Definition of Auditing
“An audit is an examination of accounting records undertaken with a view of establishing whether they correctly and completely reflect the transactions to which the purport to relate.” –Lawrence R. Dickey
“Audit is defined as an investigation of some statements of figures involving examination of certain evidence, so as to enable an auditor to make a report on the statement.” –Taylor and Perry
Classification of Auditors
Auditors of financial statements & non-financial information (including compliance audit) can be classified into three categories:
1) External auditor/Statutory auditor is an independent firm engaged by the client subject to the audit to express an opinion on whether the company's financial statements are free of material misstatements, whether due to fraud or error. For publicly traded companies, external auditors may also be required to express an opinion on the effectiveness of internal controls over financial reporting. External auditors may also be engaged to perform other agreed-upon procedures, related or unrelated to financial statements. Most importantly, external auditors, though engaged and paid by the company being audited, should be regarded as independent and remain third party.
2) Cost auditor/Statutory cost auditor is an independent firm engaged by the client subject to the cost audit to express an opinion on whether the company's cost statements and cost sheet are free of material misstatements, whether due to fraud or error. For publicly traded companies, external auditors may also be required to express an opinion on the effectiveness of internal controls over cost reporting.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
The Indian economy is classified into different sectors to simplify the analysis and understanding of economic activities. For Class 10, it's essential to grasp the sectors of the Indian economy, understand their characteristics, and recognize their importance. This guide will provide detailed notes on the Sectors of the Indian Economy Class 10, using specific long-tail keywords to enhance comprehension.
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Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
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Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
Students, digital devices and success - Andreas Schleicher - 27 May 2024..pptxEduSkills OECD
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Unit 1. Introduction of audit.pptx
1. Auditing and Taxation
T.Y.Bcom Sem I
Dr.Minal Bhandari.
Asst. Professor
Pratibha College of Commerce and Computer Studies, Chinchwad
2. Chapter I – Introduction to Principles of
Auditing and Audit Process
1. Auditing
Introduction to Auditing
Terms Book-Keeping, Accountancy, Auditing and Investigation
Meaning and Definitions
Nature
Scope
Objectives
Principles
Importance
Types or Classes of Audit
Audit Process
Advantages of Auditing
3. Introduction to Auditing
The origin of auditing can be traced to Italy. Around
the year 1494, Luca Pacioli introduced the double entry
system of bookkeeping and described the duties and
responsibilities of an Auditor.
Book-Keeping, Accountancy and Investigation are
different terms than Auditing.
Auditing is done for authentication of financial
statements of business organizations by external
qualified person who is called as an auditor and process
is termed as an auditing process.
5. Terms : Book Keeping, Accountancy and
Auditing, Investigation
Bookkeeping
A Bookkeeper records day-to-day transaction in
the books of accounts in a systematic manner.
Bookkeeping includes −
Journalizing
Posting to ledger
Totaling and balancing of ledger accounts
6. Accountancy
The job of Accountancy begins where bookkeeping ends
and includes the following :
Rectification of errors
Preparation of Trial Balance
Preparation of financial statements
(Trading and Profit & Loss account and Balance Sheet etc.)
7. Auditing
Preparation of accounts is not the duty of an
Auditor. “Auditing begins, where accountancy
ends”. Auditor is only concerned for checking and
verification of records. Auditor is a qualified
person appointed for the purpose of certification
of work done by others.
8. Investigation
An investigation may be done with a specific purpose. It
is usually conducted to know the financial position of a
business, extent of fraud and misappropriation and the
earning capacity of any business unit, etc. The time
duration for investigation may also extend beyond one
year. Investigation may not be necessarily done by a
qualified Chartered Accountant.
9. Meaning and Definitions
The word ‘Audit’ came from the Latin word ‘Audire’ which means ‘to hear’. In
organization, an expert is appointed by the owners to find of suspected fraud, to
check accuracy of accounts and to hear explanations given by the person
responsible for such transactions.
The process of verification of the accuracy and correctness of the books of
accounts by independent, external, qualified person is known as Audit.
Definition by ICAI : “Auditing is a systematic and independent
examination of data, statements, records, operations and performances
(financial or otherwise) of an enterprise for a stated purpose.”
In any auditing situation, the Auditor perceives and recognizes the
propositions before him for examination, collects evidence, evaluates
the same and on this basis, formulates his judgment which is
communicated through his audit report.
10. Definition by J.R.Batliboi : “Auditing is an intelligent and
critical scrutiny of books of accounts of a business with the
documents and vouchers from which they have been written
up, for the purpose of ascertaining whether the working
results of a particular period as shown by Profit and Loss
Account and also the financial position as reflected in the
Balance-sheet are truly and fairly determined and presented
by those responsible for their compilation.”
Definition by Prof. Montgomery : “Auditing is a systematic
examination of the books of records of organization in order to
ascertain or to verify and to report upon the facts regarding its
financial operations and the result thereof.”
11. Scope of Auditing
In comparison with earlier days, where the main objective of
auditing was to detect fraud, we now have enhanced ways to
determine a true and fair view of financial statements.
In recent times, almost every country of the world has
introduced various legislations and framed rules and
regulation of auditing.
In India also legislations related to Tax Audit, Cost Audit,
Management Audit and operation Audit, etc. are coming up.
The main purpose of auditing is to certify the correctness of
financial statements and to detect errors and frauds.
12. Scope of Auditing
Legal compliances
Company need
Proper communication
Reliable and valid information
Evaluation and test
Comparison and verification
Errors and frauds, if any
Judgments and conclusions
Opinion
13. Techniques of Auditing
Checking of posting and casting.
Physical verification of assets.
Verification and examination of transactions with available
evidences.
Scrutiny of the books of accounts,
Checking of various calculations.
Checking of carried forward balances in next year.
Checking of Bank reconciliation statements.
Auditor can get information from inside and outside sources
of organization.
15. Principles governing an efficient audit:
1. Principle of Competency (Member of ICAI)
2. Principle of Independence
3. Principle of Integrity (Moral character and honesty)
4. Principle of Confidentiality
5. Principle of Planning (Audit Programme)
6. Principle of Documentation
7. Principle of Audit Evidence
8. Principle of Study of Internal Control system (Accounting and
administrative)
9. Principle of true and fair audit conclusions & Report
17. 1. On the Basis of Ownership
Private : Sole proprietorship, Partnership Firms and non-
trading organizations. There is no statutory compulsion to
private organizations. In case of
Sole ownership: Exceed turnover (Tax Audit), Partnership
firms to settle financial disputes, NGO for Govt. Grants
Government: Union of India, Govt. Departments, Govt.
undertakings and local bodies. Government (C &A G)are
appointed as per the provisions contained in the
Constitution of India.
Statutory: An audit conducted as per statutory
requirements . Bank, Insurance, Companies, JSC,
Cooperatives and Trust conducts statutory audit.
18. 2. On the Basis of Periodicity
1. Continuous
2. Annual
3. Interim
4. Occasional
5. Concurrent
19. 3. On the Basis of Objectives
1. Financial
2. Operational
3. Cash
4. Management
5. Tax
6. Social
7. Environment
8. Propriety
9. Performance
10.Secretarial
20. 4. On the Basis of Scope
A.Complete or Detailed Audit
(Similar to Annual Audit)
B.Partial Audit
21. 5. On the Basis Employer of Audit
A. Internal Audit
B. External Audit
22. 6. On the Basis of Manner of Checking
A. Standard
B. Balance Sheet
C. Post and Vouch Audit
26. What is audit process
Audit of every company or project is unique as per the
size, nature and type of company, but the basic
is similar. It normally consists of four stages:
1. Planning (sometimes called Survey or Preliminary
Review)
2. Fieldwork (Conduct of Audit)
3. Audit Report
4. Follow-up Review.
27. Kya pakana hai ----- homework i.e. planning and
agenda/programme
Kitne logonka banana hai
Accordingly resources, team
Kaise complete karna hai, time management
Actually starting of decided work i.e actual conduct of
work
To see kam jitna aur jaise bola tha huva ya nahi
Customers ko pasand aya ya nahi i.e feedback (Submission of
audit report about the quality of work)
TO GIVE TRUE AND FAIR OPINION ABOUT THE FINANCIAL
STATEMENTS OF THE COMPANY
Accordingly we can take further decisions
28. Steps in Process of Audit
Scope of
Audit
Knowledge
of Client
Audit
Programme
Manpower
Audit
Evidence
Examination
Coordination
Documentatio
n
Determination
of true and
fair view
Submission of
report
Planning Conduct
of Audit
Audit
Report
30. Audit Programme
An audit programme is a detailed plan
of the auditing work to be performed.
It specifies the procedures to be
followed by the team of audit in the
conduct of audit more efficiently.
The auditor outlines the whole
procedure of audit from beginning till
the finalization of audit report.
31. Content or Elements of Audit Programme
Area or Scope of Auditing
Legal requirements
Scope or type of audit
Examination of last 2-3 years financial
statements and audit report
Division of work and responsibility
Evaluation of internal check and internal
control system
Preparation of audit report within
32. Advantages of Audit Programme
Division of work
Assurance of
process of work
Charge
of
negligence
in work
Final
review
Ascertainment
of
responsibility
A basis
for next
audit
34. Audit Programme: Purchases
Sr.
No.
Procedures Check List
1 Check purchase requisition for serial
numbering
2 Check whether purchase requisitions were
signed by authorized person
3 Were quotations called by authorized
person?
4 Obtain evidence of comparative statement
prepared by authorized person
5 Whether goods ordered were same as
mentioned in purchase requisition, if not
then ask clarification and document
36. Audit Notebook
It is a systematic record of the queries
made by the auditor and his assistant
and the replies received accordingly.
It is maintained by the assistants of
chief auditor.
It can be maintained in the form of
register/file.
37. Contents of an Audit Notebook
Technical details, accounting methods followed by company
Provisions of Articles of Association or Memorandum of Association
Queries and concerned department
Explanations asked to specific employee
Information received
Discussion points on special matter with authority
Bank reconciliation statement, balances of certain books of account
Errors and frauds found, if any
Particulars of missing vouchers, documents
The points needed to refer while preparation of audit report
38. Advantages of
Audit Note Book
Limitations of
Audit Note Book
Documents can be
preserved.
Can save from the
claim for
negligence.
In the absence of
any assistance, work
can be continued.
Helps in preparation
of audit work.
Many times
entries made in
audit note book
are incomplete or
not clear.
Improper audit
note book shows
the negligence of
audit work.
39. Audit Working Papers
All documents prepared or obtained and retained by the auditor
during the course of audit and conclusions are termed as audit
working papers.
Audit working papers help the auditor as a reference to draw the
conclusions about accounts and to prepare audit report.
The ownership belong to the auditor but he can give copy to the
client on demand
Auditor can’t disclose these papers without the consent of
management under the principle of confidentiality, except when
required by law.
Auditor may retain working papers with him for ten years after
submission of audit report.
40. Examples of Audit Working Papers
Audit programme
Correspondence between auditor and
stakeholders
Details of investments, banks, assets
Stock valuation certificate
Photo copies of necessary documents
Abstracts from minute book,
references from articles of association
42. Audit Report
An audit report is a written opinion
of an auditor which is concerned to
an organization’s financial
statements.
An audit report is prepared as per
the standard format prescribed by
GAAS (Generally Accepted
Accounting Principles)
44. Internal Control
Internal controls are the mechanisms, rules, and
procedures implemented by a company to ensure the
integrity of financial and accounting information,
promote accountability, and prevent fraud.
Internal controls system includes a set of rules,
policies, and procedures an organization implements
to provide direction, increase efficiency and
strengthen adherence to policies.
45. Definition
The Oxford Dictionary states,
“The measures an organization employs to ensure that opportunities for
fraud or misfeasance are minimized.”
The internal control structure of a company consists of the policies and
procedures established to provide reasonable assurance that specific
entity objectives will be achieved.
49. Accounting Control
To attain the following:
1. Efficient and orderly conduct of accounting
transactions.
2. Safeguarding the assets.
3. Prevention and detection of errors and frauds.
4. Ensuring accuracy, competencies, reliability and
timely preparation of accounting data
50. Administrative Control
To achieve adherence to management policy in various
areas of business operations:
1. Efficient and orderly system may be established to
ensure that ‘ABC’ control over material is
followed.
2. Timely supply of reliable management information.
3. Maintenance programme for machines.
51. Limitations of Internal
Control
Negligence by employees (Human error)
Possibility of fraud by group
Manipulation by management
Discussion of different examples….
52. Internal Check
One of the method of internal control system.
An accounting procedure whereby routine entries
for transactions are handled by more than one
employee in such a manner that the work of one
employee is automatically checked against the
work of another for detection of errors and
irregularities.
53. Definition of Internal Check
L.R. Disksee : “Internal Check is an arrangement of
accounting routine that errors and frauds are
automatically prevented or discovered by the very
operation of book-keeping itself.”
F.R.M De Paula, “An internal check means practically
a continuous internal audit carried on by the staff
itself, by means of which the work of each individual is
independently checked by the other members of the
staff ”.
54. Features of Internal Check
1. Division of work
2. Separation of custody of assets like cash
and its recording
3. Clear cut hierarchy
4. Application Job rotation in accounting and
administration department
5. Reconciliation and checking
6. Usage of electronic applications
7. Periodical review
8. Proper system of filing and documentation
55. Objectives Of Internal Check
To take precautions regarding
carelessness, inefficiency and fraud by
employees.
To ensure about adequate and
reliable accounting information.
To keep moral check over staff.
To minimize the possibility of errors and
frauds
To detect them at its initial stage if it is
committed.
56. Internalaudit
Internal audit is a part of internal control system.
Internal audits evaluate a company’s internal controls,
including its corporate governance and accounting
processes. These audits ensure compliance with laws and
regulations and help to maintain accurate and timely
financial reporting and data collection. Internal audits also
provide management with the tools necessary to attain
operational efficiency by identifying problems and
correcting lapses before they are discovered in an
external audit.
In addition to ensuring a company is complying with laws
and regulations, internal audits also provide a degree of risk
management and safeguard against potential fraud, waste,
or abuse.
