Advanced Auditing

CA Final : Group I :: Paper 3: [One paper: Three hours - 100 marks]

Level of Knowledge : Expert knowledge.

Objective . . .

To gain expert knowledge of current auditing practices and procedures and apply them in auditing engagements.

Contents . . .

  1. Audit strategy, planning and programming
    Planning the flow of audit work; drafting of reports; audit strategy, planning, programme, and impor¬tance of super-vision; review of audit notes and working papers; principal's ultimate responsibility; extent of del¬egation; control over the quality of audit work; reliance on the work of other auditor, internal auditor or an expert.
  2. Internal control
    Evaluation of internal control procedures; tech¬niques including questionnaire, flowchart; internal audit and external audit, coordination between the two.
  3. Special audit techniques

    1. Selective verification; statistical sampling.
    2. Special audit procedures; witnessing physical verification of assets, direct circularisation of debtors and creditors.
    3. Analytical review procedures.
    4. Improving the efficiency of auditing, systems auditing, risk-based auditing.
  4. Statements/Standards and Guidance Notes.
  5. Generally accepted accounting practices and auditing procedures. Statements on Standard Auditing Practices and Guidance Notes.
  6. Audit of limited companies: Statutory requirements under the Companies Act 1956; Audit of branches; joint audits. Concepts of true and fair and materiality and audit risk in the context of audit of companies.
  7. Audit reports; qualifications, notes on accounts, distinction between notes and qualifications, detailed observations by the statutory auditor to the management vis-a-vis obligations of reporting to the members; Special reports on offer documents.
  8. Dividends and divisible profits; financial, legal, and policy considerations with special reference to depreciation. 8. Special points in audit of public sector companies. Directions of Comptroller and Auditor General under Section 619; Concepts of propriety and efficiency audit.
  9. Rights, duties, and liabilities of auditors; Third party liability - nature and extent.
  10. Audit Committees and Corporate Governance.
  11. Investigation including Due Diligence.
  12. Cost audit, Environmental Audit, Energy Audit.
  13. Audit of public expenditure.
  14. Certificates under the Payment of Bonus Act, import/export control authorities, etc.; Distinction between certificates and reports; specific services to non-audit clients.
  15. Audit under different statutes, viz; income tax, other direct tax laws and indirect taxes.
  16. Special features of audit of banks, insurance companies, co-operative societies and non-banking financial companies.
  17. Special audit assignments like audit of bank borrowers, audit of stock exchange brokers and depositories; Inspection of special entities like banks, financial institutions, mutual funds, stock brokers.
  18. Professional Liability of Auditors: Code of Ethics with special reference to the relevant provisions of The Chartered Accountants Act, 1949 and the Regulations thereunder.
  19. Internal audit, management and operational audit: nature and purpose, organisation, audit programme; behavioural problems; Specific areas of management and operational audit involving review of internal control, purchasing opera-tions, manufacturing operations, selling and distri¬bution, personnel policies, systems and procedures. Aspects relating to concurrent audit.
  20. Audit under computerised environment: Computer auditing; specific problems of EDP audit, need for review of inter-nal control especially pro¬cedure controls and facility controls; techniques of audit of EDP output; use of computers for internal and man¬agement audit purposes; test packs, computerised audit programmes; involvement of the auditor at the time of setting up the computer system.

Recommended Books

  • Tata McGraw Book Co., New Delhi


    1. Contemporary Auditing
      • Kamal Gupta
  • Mcdonald & Evans, U.K.

    1. Advanced Auditing and Investigation
      • Emile Woolf et al
  • AMACOM Publication.

    1. Management Auditing: A questionnaire approach
      • R.J. Thirauf
  • Prentice Hall

    1. Auditing Today
      • Emile Woolf

Reference Books

  • ???

    1. Compendium of Statements and Standards — Accounting and Auditing,
    2. Compendium of Guidance Notes Vol 1,11,111 and IV
  • John Wiley & Sons USA

    1. Modem Internal Auditing (A Ronald Press Publication)
      • Victor Z. Brink and Herbert Witt

Other Relevant Books


Author Credit : Team Future Accountant

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