Written on Oct, 11, 2016 by in

Vouching is an examination and verification of the authority and authenticity of transactions as recorded in the books of account. On the basis of vouchers, an auditor should satisfy himself that documentary and other evidence of sufficient validity is available in  order. It is widely felt that vouching is an essence of auditing. It is the foundation and the first …

Written on Oct, 08, 2016 by in

CLEAN AUDIT REPORT OR UNQUALIFIED REPORT:- If the auditor is satisfied that the accounts and balance sheet and profit  & loss accounts do present a true and fair picture as per accounting principles and statutory requirements, he will give an unqualified or clean opinion. Thus, if the auditor makes a statement in his report that “in our opinion and to …

Written on Oct, 04, 2016 by in

POWER OR RIGHTS OF THE COMPANY AUDITOR:– Following are the rights of company auditor:- Right to access at all the times to the books and accounts and vouchers of the company whether kept in head office of the company or elsewhere and shall be entitled to require from the office of the company such information and explanation as the auditor …

Written on Sep, 28, 2016 by in

Appointment of Company Auditor Every company, whether public or private company, must appoint an auditor to audit its account. The Board of Directors are empowered to appoint the first auditors of a company who shall hold office until the conclusion of the first annual general meeting. Such powers must be exercised by the board within one month of the date …

Written on Sep, 28, 2016 by in

Qualities of an Auditor:- An auditor must have the following qualities:- He/she must have complete knowledge of general accounts, income tax, cost accounting etc. He/she should be aware of the latest development of the technique of accounting. He/she should  not pass any transaction unless he/she knows that it is correct. It is possible when sh/she knows thoroughly well the principles …

Written on Sep, 27, 2016 by in

Following are the differences between internal audit and statutory audit:- APPOINTMENT:- Internal auditor is appointed by the management while statutory auditor is appointed by the shareholders except in certain cases when the auditor is appointed by the directors of the company or the government. Appointment of internal auditor is optional while statutory auditor is appointed as per the companies act. …

Written on Sep, 27, 2016 by in

Internal check is a method of organizing the accounting system of a business concern or a factory where the duties of different staffs are arranged in such a way that the work of one person is automatically checked by another person and thus, the possibility of fraud or error or irregularity is minimized. For example, the receipt of cash entered …

Written on Sep, 23, 2016 by in

According to Spicer and Peglar “Internal control is best regarded as the whole system of controls, financial and otherwise, established by the management in the conduct of a business including internal check, internal audit and other forms of control”. As per the above definition we can say that :- The internal control is a system of controls. Controls are established …

Written on Sep, 18, 2016 by in

An audit which is conducted in between the two annual audits with a view to find out interim profit to enable to company to declare a interim dividend, is called interim audit. It is a kind of audit which is completed between the periodical or balance sheet audit. Advantages of Interim Audit It is good where the publication of the …

Written on Sep, 18, 2016 by in

Final audit means when the audit is done after the close of financial year or when the final accounts are prepared. The audit is completed in one continuous session. Advantages of Final Audit Less danger of manipulation of figures after they have been checked. Auditor need not maintain a big establishment for this purpose. Preparation of time table for audit …


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