December 15, 2021

Working papers should record the audit plan, nature, timing and extent of auditing procedures performed, and the conclusions drawn from the evidence obtained. The form and content of working papers are affected by matters such as : Nature of the engagement.  Form of the auditor’s report. Nature and complexity of the client’s business  Nature and […]

The audit working papers constitute the link between the auditor’s report and the client’s records. Documentation is one of the basic principles listed in AAS 1. According to AAS 3 (reproduced in Appendix I), documentation refers to working papers prepared or obtained by the auditor and retained by him in connection with performance of his

The auditor must gather sufficient competent evidential matter as a basis for forming his opinion on :  the truth and fairness of the accounts and also their compliance with the provisions of the related laws, rules and regulations;  the proper keeping of the accounting records, and other records and related registers of the client. These

As stated in the previous chapter, materiality is an important consideration for an auditor to evaluate whether the financial statements reflect a true or fair view or not. AAS 13 on “Audit Materiality” requires that an auditor should consider materiality and its relationship with audit risk while conducting an audit. When planning the audit, the

Final or Completed or Periodical Audit : A final or completed audit is commonly understood to be an audit which does not begin until the books have closed at the end of the accounting period and thereafter is carried on continuously until completed. Whether an audit ought to be conduct continuously after the close of

In order than an audit may be carried out in a systematic and efficient manner, the following steps should be taken : (1) Work must be carried on regularly and record kept of time of arrival/departure of the staff and also of the work done each day; (2) As far as possible, a definite portion

It provides the assistant carrying out the audit with total and clear set of instructions of the work generally to be done.  It is essential, particularly for major audits, to provide a total perspective of the work to be performed.  Selection of assistants for the jobs on the basis of capability becomes easier when the

It is desirable that in respect of each audit and more particularly for bigger audits an audit programme should be drawn up. Audit programme is nothing but a list of examination and verification steps to be applied set out in such a way that the inter-relationship of one step to another is clearly shown and

The auditor should prepare a written audit programme setting forth the procedures that are needed to implement the audit plan. The programme may also contain the audit objectives for each area and should have sufficient details to serve as a set of instructions to the assistants involved in the audit and as a means to

The auditor should consider the following matters in developing his overall plan for the expected scope and conduct of the audit :  The terms of his engagement and any statutory responsibilities.  The nature and timing of reports or other communication.  The applicable legal or statutory requirements. The accounting policies adopted by the client and changes

It is one of the important principles in developing an overall audit plan. Infact without adequate knowledge of client’s business, a proper audit is not possible. AAS-20 on “Knowledge of the Business” deals in detail about the significance of such knowledge on the part of the auditor. The auditor needs to obtain a level of

As per Auditing and Assurance Standard 1, “Basic Principles Governing an Audit”, Audit Planning is one of the basic principles. Accordingly, it states : “The auditor should plan his work to enable him to conduct an effective audit in an efficient and timely manner. Plans should be based on knowledge of the client’s business. Plans