AUDITING

The Auditing course emphasizes concepts and principles which enable the student to understand the philosophy and environment of auditing and assurance services theory and practice. It provides an overview and understanding of the public accounting profession and the professional standards utilized in providing auditing and other assurance services, and reporting on financial statements.



Introduction on auditing

The practice of auditing existed even in the Vedic period. Historical records show that Egyptians, Greeks and Roman used to get this public account scrutinized by and independent official. Kautaly in his book “arthshastra” has stated that “all undertakings depend on finance, hence foremost attention should be paid to the treasury”. Auditing as it exists today can be associated with the emerging a joint stock company during the industrial revolution.

Internal check
The term internal check implies that the work of various members of the staff is allocated in such a way that the work done by one person is automatically checked by another. It is defined as “such an arrangement of book keeping routine where in errors and frauds are likely to be prevented or discovered by the very occupation of book keeping itself’.
Internal check is a system under which accounting methods and details of an establishment are laid out that the accounts and procedures are not under the absolute and independent control of any one person or the contrary the work of one employee is complementary to that of another
 External-confirmations
 ISA 505: defines external confirmation as “audit evidence obtained as a direct written response to the auditor from a third party (the confirming party), in paper form, or by electronic or other other medium.” (para 6). For example,an auditor would in the normal course of the audit seek direct confirmation of trade receivables by writing to customers asking them to confirm amounts due by them to the client. As confirmations come from sources independent of the client, they are highly persuasive and therefore a much used type of evidence.Read more

WORK OF INTERNAL AUDITOR IN ISA 315 REVISED
 One of the major revisions of ISA 315 relates to the inquiries made by external auditors of the internal audit function since internal auditors have better knowledge and understanding of the organisation and its internal control. This article addresses and highlights the components of internal control.
Audit Procedure
Candidates tend to perform less well when examined on writing audit procedures. This article helps to clarify the concepts behind audit procedures, and gives advice on how to correctly approach such questions, as well as tips on what to avoid