portfolio of auditor

7/31/2019 PORTFOLIO of Auditor

1/16


2/16

Professional accountants have an important rolein society. Investors, creditors, employees andother sector of the bussiness community, as wellas the government and public at large depend on

professional accountants for sound financialaccounting and reporting, effective financialmanagement and competent advice on a variety ofbusiness and taxation matter.

In order to achieve the objectives of theaccountancy profession, professional accountanthave to abserve a number of prerequisites or

fundamental principles as under:


3/16

INTEGRITY

OBJECTIVITY

CONFIDENTIALITYPROFESSIONAL

BEHAVIOUR

AUDITING AND

ASSURANCE


4/16

An officer or employee of the company.

A partner or an employee of an officer or

employee of the company; or Indebted to the company for a sum exceeding of

rs 1,000.

A person holding any security of that companyafter a period of one year from the date of thecommencement of the companies act, 2000.


5/16

Peer review of auditors to monitor whether an auditoris maintaining proper standards.

Not allowing auditor to derive more than a certainpercentage of their gross revenue from any onecompany or group of companies.

Prohibition on persons to act as auditor of a companyif they are related to directors they have common

financial interest with them. Not allowing auditors to render management services

or other non audit services to the company underaudit.

Dissociation with audit where there is actual orthreatened litigation with the client.

Rotation of auditors.


6/16

Assessing risk and

identifying

problems.

Planning and

performing theaudit effectively

and efficiently.

Evaluating audit

evidence..

Providing betterservice to the

client.

AUDITORS

PROFESSIONAL

COMPETENCIES.


7/16

If the division of work between the joint auditors is such that a specific partof audit work in relation to a particular area is done by each auditor alone,each joint auditor will be responsible only for the work allocated to him.

Division of work between joint auditors should be by mutual discussion &the client should be informed as to their respective areas of work.

Matters requiring discussions, disclosure or application of judgment shouldbe brought to the attention of the other joint auditors before finalization of

audit.

Each joint auditor has a separate and specific responsibility to evaluate &review the existing system of internal control & determine the audit tests &depth of review.

If audit of different branches or divisions has been entrusted to differentJoint auditors, each joint auditor will have specific & separateresponsibility to review the returns of the respective branches & divisions.

It is not incumbent on any Joint auditors to review the work done by otherjoin auditors & he is entitled to presume that they have carried out theirrespective parts of the work accordingly to the normal standards laid downby the Institute and generally accepted auditing standards.

If the joint auditors are not in agreement in respect of the report each ofthem may make a separate report. There is no question of majority orminority opinion in the case of a joint audit report and each joint auditorhas both a right and a duty to express his own opinion.


8/16

ACCESS TO BOOKS

AND VOUCHERS.

OBTAIN

INFORMATION AND

EXPLANATIONS.

TO VISIT BRANCHOFFICES AND ACCESS

TO BRANCH

ACCOUNT.

TO RECEIVE NOTICES

AND TO ATTEND

GENERAL MEETINGS.

RIGHTS OFCOMPANY AUDITOR.


9/16


10/16

Sec 227(2) of an Act provides that the auditor shall make a report to themembers of the company on the accounts examined by him, & on every balancesheet & profit & loss account & on every other document declared by this Act tobe part of or annexed to the balance sheet or profit & loss account, which are laidbefore the company in the general meeting during his tenure of office

Thus, the main duty of auditor is to make a report to the members of thecompany.

The auditor is not required to certify the financial statements. The report has tobe on the accounts of the company as well as on the balance sheet & the profit &loss account, including the documents annexed thereto.

It may also be noted that the duty of an auditor to report on the balancesheet & profit & loss account is not with reference to these statements of aparticular year.

Sec227 lays down the various matters that are required to be included in

the auditors report. Primarily, the auditor is required to state whether thefinancial statements of the company present a true & fair view of its state ofaffairs & working results. Apart from this, he has to include certain othermatters in his audit report.

Under sec. 227(1A) he has to inquire into certain matters & report thereonif he is not satisfied with the results of his enquiry.

Under sec. 227(4A) he has to include in his report a statement on the

matters specified in the order of the central government in thus regard.


11/16


12/16

CIVIL LIABILITIES IN THE

COMPANIES ACT.

CRIMINAL LIABILITIES IN THE

COMPANIES ACT.


13/16


14/16


15/16


16/16

portfolio of auditor

Documents