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24 Cards in this Set
- Front
- Back
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Sec.128 of Companies Act 2013 says? |
Every company shall prepare and keep at its Registered office books of accounts and other relevant books and papers and f.s for every f.y which gives a true and fare view of the state of affairs of the company , including its branch office . |
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What is the main objective of audit ?? |
To find out whether the financial statements prepared by a company show the true and fare view of f.state of affairs of a company . |
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When are accounts said to be TRUE AND FAIR ? |
1. The books of accounts have recorded all the business transactions correctly 2. The accounts have been prepared according to accepted principles and AS 3. there are no errors and frauds in accounts . 4. P/l account shows the true and fair results of entity's operations 5. The value of assets and liabilities appearing in b.s is showing the correct financial picture 6. The books of accounts must disclose all material facts regarding revenue , expenses , assets and liabilities . ( Material means important and essential ) |
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SA 200 |
BASIC PRINCIPLES GOVERNING AN AUDIT |
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SA 230 |
AUDIT DOCUMENTATIONS |
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SA 500 |
AUDIT EVIDENCE |
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SA 320 |
Materiality in planning and performing an audit |
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What is investigation ??? |
Is an exercise which is carried out with a specific objective . The investigation means in-depth analysis of books of accounts , transaction, and event . Investigation exercise is voluntary in nature and is used by Internal auditors and management auditors. |
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Internal audit ? And who is appointed for internal audit ? |
1.;Evaluation and analysis of business operations by internal audit staff . 2. Is the independent appraisal activity within an organisation for the review of accounting , financial and other business practices as protective and constructive arms of management 3. CA or cost accountant or any other professional as may be decided by the board to conduct internal audit |
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Which companies required to appoint an internal audit |
1. Every listed company 2. Every unlisted public company having :: * paid up sh. Cap. - 50 cr. Or more (p.f.y) * Turnover - 200 Cr. Or more (p.f.y) * O/S loan or borrowings from bank or public financial institutions - 100 Cr. Or more at any point of time in p.f.y * O/S deposit - 25 Cr. Or more any point of time in p.f.y 3. Every private company having : # Turnover - 200 Cr. Or more (p.f.y) #O/S loan or borrowings from bank or public financial institutions - 100 Cr. Or more at any point of time in p.f.y |
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Audit plan |
1. Lays out the strategies to be followed to conduct an audit . 2. It includes the nature , timing and extend of audit procedures to be performed . 3. An audit plan is a step by step , methodical approach that enables auditors to focus on important areas under review . 4. Planing ahead for an audit work will not only guarantee a valid audit opinion but will also help the auditor to ensure that . |
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Audit programme |
1. Is a set of instructions which are to be followed for proper executive of audit . 2. It contains the measures that are generally employed to determine what and how much evidence must be collected and evaluated . 3. It also lays the responsibility for the whole audit team for carrying out different tasks . |
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Working papers are to be kept for atlest ?? |
7 yes from the date of audit report |
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Who can be appointed as auditor of company ? |
Sec. 141(1) : 1.CA 2. A Firm with majority of partners practicing in India 3. A firm including LLP. Is appointed as a auditor of company, only the partner who are CA shall be authorised to act and sign on behalf of firm |
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Appointment of auditor |
Sec . 139(1) |
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Conditions for appointment and notice to registrar |
RULE 4 of companies (audit and auditor ) rule ,2014 FORM ADT-1 WITHIN 15DAYS OF MEETING IN WHICH AUDITOR IS APPOINTED . WITHIN 15DAYS OF MEETING IN WHICH AUDITOR IS APPOINTED . |
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Rotation of auditor |
Sec. 139(2) 1.An individual as auditor - can't be reappointed - for more than one term of 5 consecutive years. 2. An Audit firm - can't be reappointed - for more than two terms of 5 consecutive years. |
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1st auditor appointment : |
Sec. 139(6) - by board of directors -within 30 days from the date of registration of the company * if board of directors failed to appoint then -by members of company - within 90 days at EGM - such auditor shall hold the office till the conclusion of first AGM |
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1dt auditor appointment by government company : |
Sec. 139(7) -by CAG ( comptroller & auditor general ) -within 60 days from the registration of Company *If CAG fails then : - by board of directors -within next 30 days *If board fails then : - by members of company - within 60 days at EGM who hold ths office till first AGM |
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Casual vacancy of auditor : |
Sec. 139(8) - by board of directors -within 30 days.. If casual vacancy is due to resignation of auditor - by shareholders - at general meeting -within 3 months of the recommendation of board and he shall hold the office till the conclusion of the next AGM |
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Filling of casual vacancy of auditor by government company : |
Sec. 139(8)(ii) - by CAG - within 30 days If CAG fails : - board of directors - within next 30 days . |
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Remuneration of auditor |
Sec 142 - fixed in general meeting - board may fix remuneration of first auditor appointed - |
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Branch audit |
Sec. 143(8) The accounts of that office shall be audited by the company auditor appointed for the company or by any other person qualified for appointment as an auditor of the company. If outside India : Pg. 586 |
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Reporting of fraud : |
To central government |
