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WELCOME TO A TALK ON…

WELCOME TO A TALK ON…. AUDITING STANDARDS. INTRODUCTION. Audit Mandate - CAG’s (DPC) Act, 1971 prescribes functions, duties and powers of SAI Audit Mandate includes Audit of Receipt and Expenditure from Consolidated Fund. Introduction (contd.). Contingency Fund and Public Accounts

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WELCOME TO A TALK ON…

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  1. WELCOME TO A TALKON… AUDITING STANDARDS RTI, MUMBAI / DAY 1 / Slide 1.3.1

  2. INTRODUCTION • Audit Mandate - • CAG’s (DPC) Act, 1971 prescribes functions, duties and powers of SAI • Audit Mandate includes Audit of • Receipt and Expenditure from • Consolidated Fund RTI, MUMBAI / DAY 1 / Slide 1.3.1

  3. Introduction (contd.) • Contingency Fund and Public Accounts • Trading, Manufacturing, Profit and Loss Account and Balance Sheet • Accounts of Stores and Stock • Government Companies • Statutory Corporations • Authorities and Bodies substantially financed • Grants and Loans for specific purposes RTI, MUMBAI / DAY 1 / Slide 1.3.1

  4. Audit Objectives • To safeguard financial interests of the Government • Uphold and promote public accountability • Sound and economical financial practices • Audit assists Parliament/Legislatures in exercising financial control through • PACs/COPUs RTI, MUMBAI / DAY 1 / Slide 1.3.1

  5. Audit objectives (contd.) • Executive Governments and not Audit is responsible for enforcing economy and efficiency in expenditure RTI, MUMBAI / DAY 1 / Slide 1.3.1

  6. Scope of Audit • Term includes financial as well as performance audit RTI, MUMBAI / DAY 1 / Slide 1.3.1

  7. Basic Postulates • Audit must exercise its best judgement in determining - • audit procedure • basis of forming opinion • contents of his report • due professional care RTI, MUMBAI / DAY 1 / Slide 1.3.1

  8. Basic Postulates (contd.) • test audit and hence auditor is not responsible • independent attitude • Audit independent • Auditor’s right to inspect any record, documents, call for information, clarification RTI, MUMBAI / DAY 1 / Slide 1.3.1

  9. Auditing standards can be broadly grouped under • 1 General Standards • 2 Operational Standards • 3 Reporting Standards RTI, MUMBAI / DAY 1 / Slide 1.3.1

  10. 1 GENERAL STANDARDS A Professional B Manuals and Instructions C Quality Assurance RTI, MUMBAI / DAY 1 / Slide 1.3.1

  11. General Standards -Professional • Qualification • Training • Auditor should develop proper insight RTI, MUMBAI / DAY 1 / Slide 1.3.1

  12. General Standards • Manuals and instructions RTI, MUMBAI / DAY 1 / Slide 1.3.1

  13. General Standards • Quality Assurance • Appropriate internal control system to ensure quality of work RTI, MUMBAI / DAY 1 / Slide 1.3.1

  14. 2. OPERATIONAL AUDIT STANDARDS • Audit Planning • Financial Statement Audit • Regularity and Legal Audit • Performance Audit RTI, MUMBAI / DAY 1 / Slide 1.3.1

  15. Operational Standards -Audit Planning • Audit should be properly guided • directed and • supervised • sufficient understanding of the internal control system of the auditee organisation RTI, MUMBAI / DAY 1 / Slide 1.3.1

  16. Operational Standards - Financial Statements Audit • Financial Statements are accurate and complete • True and fair view • prepared based on generally accepted accounting principles(GAAPs) • sufficient disclosure RTI, MUMBAI / DAY 1 / Slide 1.3.1

  17. Operational Standards -Performance Audit • Achievement of physical and financial goals and targets • social and economic objects • utilisation of resources as per projected outlay • cases of overpayment, losses, avoidable, excess or infructuous expenditure due to improper planning RTI, MUMBAI / DAY 1 / Slide 1.3.1

  18. Operational Standards -Performance Audit(contd..) • Delays in completion • overstaffing RTI, MUMBAI / DAY 1 / Slide 1.3.1

  19. 2 OPERATIONAL AUDIT STANDARDS(contd) • Audit of Receipts • Audit of Government Companies • Auditing in EDP Environment • Audit Evidence • (i) Sufficiency • (ii) Relevance • (iii)Competence RTI, MUMBAI / DAY 1 / Slide 1.3.1

  20. Reporting Standards • Field Audit Report - • Observations and conclusions in an appropriate form • Contents should be easy to understand • Report should be complete RTI, MUMBAI / DAY 1 / Slide 1.3.1

  21. Reporting Standards (contd.) • Accurate • Convincing • Clarity • Concise • Follow up of Audit Reports RTI, MUMBAI / DAY 1 / Slide 1.3.1

  22. Reporting Standards (contd.) • Report should be free from vagueness or ambiguity • relevant information • supported by audit evidence • timeliness RTI, MUMBAI / DAY 1 / Slide 1.3.1

  23. Reporting Standards (contd.) • Follow up of Audit reports • Adequate • Prompt • Proper RTI, MUMBAI / DAY 1 / Slide 1.3.1

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