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AUDITING STANDARDS DAY 2 SESSION NO.1 (THEORY)

AUDITING STANDARDS DAY 2 SESSION NO.1 (THEORY). 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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AUDITING STANDARDS DAY 2 SESSION NO.1 (THEORY)

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  1. AUDITING STANDARDSDAY 2 SESSION NO.1 (THEORY) RTI, MUMBAI

  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

  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

  4. Audit Objectives • To safeguard the 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/PUCs RTI, MUMBAI

  5. Scope of Audit Includes: • Performance Audit • Regularity Audit • Financial Audit • Compliance Audit RTI, MUMBAI

  6. Basic Postulates • Audit must exercise his best judgement in determining - • audit procedure • basis of forming opinion • contents of his report • due professional care • independence RTI, MUMBAI

  7. Auditing standards can be broadly grouped under 1 General Standards 2 Operational Standards 3 Reporting Standards RTI, MUMBAI

  8. General Standards A Professional B Manuals and Instructions C Quality Assurance RTI, MUMBAI

  9. General Standards - Professional • Qualification • Training • Auditor should develop proper insight RTI, MUMBAI

  10. General Standards • Quality Assurance • Appropriate internal control system to ensure quality of work RTI, MUMBAI

  11. Operational Audit Standards *Audit Planning *Financial Statement Audit *Regularity and Legal Audit *Performance Audit (VFM Audit) RTI, MUMBAI

  12. 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

  13. Operational Standards - Financial Statements Audit • Financial Statements are accurate and complete • True and fair view • prepared based on generally accepted accounting principles • sufficient disclosure RTI, MUMBAI

  14. 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

  15. Operational Standards -Performance Audit (contd..) • Delays in completion • overstaffing RTI, MUMBAI

  16. 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

  17. Reporting Standards Field Audit Report - Observations and conclusions in an appropriate form Contents should be easy to understand Report should be complete RTI, MUMBAI

  18. Reporting Standards (contd…) Accurate Convincing Clarity Concise Follow up of Audit Reports RTI, MUMBAI

  19. Reporting Standards (contd…) • Report should be free from vagueness or ambiguity • relevant information • supported by audit evidence • timeliness RTI, MUMBAI

  20. Reporting Standards (contd…) • Follow up of Audit reports • Adequate • Prompt • Proper RTI, MUMBAI

  21. Session Summary • In this session we discussed : • INTOSAI Auditing Standards • CAG’s DPC Act • Auditing Standards RTI, MUMBAI

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