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


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 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


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


Audit objectives (contd.)

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


Scope of Audit

Term includes financial as well as

performance audit


Basic Postulates

Audit must exercise its best judgement in determining -

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


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


Auditing standards can be broadly grouped under

1 General Standards

2 Operational Standards

3 Reporting Standards


1 GENERAL STANDARDS

A Professional

B Manuals and Instructions

C Quality Assurance


General Standards -Professional

Qualification Training Auditor should develop proper

insight


General Standards

Manuals and instructions


General Standards

Quality Assurance Appropriate internal control system to

ensure quality of work


2. OPERATIONAL AUDIT STANDARDS

Audit Planning

Financial Statement Audit

Regularity and Legal Audit

Performance Audit


Operational Standards -Audit Planning

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

internal control system of the auditee organisation


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


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


Operational Standards -Performance Audit(contd..)

Delays in completion overstaffing


2 OPERATIONAL AUDIT STANDARDS(contd)

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


Reporting Standards

Field Audit Report -

Observations and conclusions in an appropriate form

Contents should be easy to understand

Report should be complete


Reporting Standards (contd.)

Accurate

Convincing

Clarity

Concise

Follow up of Audit Reports



Report should be free from vagueness or ambiguity

relevant information supported by audit evidence timeliness



Follow up of Audit reports Adequate Prompt Proper

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

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