rti, mumbai / day 1 / slide 1.3.1 welcome to a talk on… auditing standards

RTI, MUMBAI / DAY 1 / Slide 1.3.1

WELCOME TO A TALKON…

AUDITING AUDITING STANDARDSSTANDARDS

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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

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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

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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

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Audit objectives (contd.)

Executive Governments and not Audit is responsible for enforcing economy and efficiency in expenditure

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Scope of Audit

Term includes financial as well as

performance audit

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Basic Postulates

Audit must exercise its best judgement in determining -

audit procedure basis of forming opinion contents of his report due professional care

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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

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Auditing standards can be broadly grouped under

1 General Standards

2 Operational Standards

3 Reporting Standards

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1 GENERAL STANDARDS

A Professional

B Manuals and Instructions

C Quality Assurance

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General Standards -Professional

Qualification Training Auditor should develop proper

insight

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General Standards

Manuals and instructions

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General Standards

Quality Assurance Appropriate internal control system to

ensure quality of work

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2. OPERATIONAL AUDIT STANDARDS

Audit Planning

Financial Statement Audit

Regularity and Legal Audit

Performance Audit

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Operational Standards -Audit Planning

Audit should be properly guided directed and supervised sufficient understanding of the

internal control system of the auditee organisation

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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

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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

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Operational Standards -Performance Audit(contd..)

Delays in completion overstaffing

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2 OPERATIONAL AUDIT STANDARDS(contd)

Audit of Receipts Audit of Government Companies Auditing in EDP Environment Audit Evidence (i) Sufficiency (ii) Relevance (iii)Competence

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Reporting Standards

Field Audit Report -

Observations and conclusions in an appropriate form

Contents should be easy to understand

Report should be complete

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Reporting Standards (contd.)

Accurate

Convincing

Clarity

Concise

Follow up of Audit Reports

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Reporting Standards (contd.)

Report should be free from vagueness or ambiguity

relevant information supported by audit evidence timeliness

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Reporting Standards (contd.)

Follow up of Audit reports Adequate Prompt Proper