Download - 1. history of audit jan 14
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AUDIT
TO HEAR OR LISTEN
AUDIO
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INTIALLY WAS ASSUMED TO BE
TRUST WORTHY PERSON OF
OWNERS IRRESPECTIVE OF HIS
QUALIFICATION.EYES &EARS OF
THE OWNER.
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SALES OF DATES 2000.00
1262.50
PURCHASE OF DATES
SALARY
MAZDOORI
OCTRIO
CLEANING OF DATES
PACKING
1000.00
200.00
10.00
0.50
2.00
50.00
CASH IN HAND WITH MUNSHI 737.50
KHATA (ACCOUNTS IN ANCIENT AGES
(1-10-1550)
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ASSETS
CASH
1000
2000
3000
OPENING CASH
LOANS TAKEN
SALES
TOTAL RECEIPTS
500
500
5000
6000
LIABILITY
OWNERS MONEY
500
2500
3000
ASSETS PURCHASED
PURCHASES
EXPENSES
TRANSPORT
LABOR
PACKING
TOTAL PAYMENTS
CASH IN HAND
1000
2000
100
200
700
4000
2000
DEVELOPING DAYS IN ACCOUNTINGPROFESSION
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BALANCE SHEET Rs. in Million
CAPITAL
RESERVES
PROFIT FOR THE YEAR
LONG TERM DEBITS
CURRENT LIABILITIES
ACCOUNTS PAYABLE
TAX PAYABLE
OTHERS
100,000
2000
1500
103,500
100,000
50,000
2,500
5,000
261,000
FIXED ASSETS
CURRENT ASSETS
ACCOUNTS RECOVERABLE
BILLS RECOVERABLE
100,000
100,000
61,000
261,000
PROFIT & LOSS Rs. in Million
SALES
PURCHASED
LABOR
MARKETING EXP
SELLING EXP
REPAIRS
FINANCIAL EXP
DEP
PROFIT BEFORE TAX
TAX
PROFIT AFTER TAX
100,000
50,000
2500
2500
7000
15000
20000
3000
1500
1500
200000
200,000
200000
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(A) GLOBALIZATION IMPORTS EXPORTS
TRAVELLING
(B) COMPETITION QUALITY MACHINES
COMPUTERIZATION
QUALITY SERVICE
QUALIFIED STAFF.
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ACCOUNTANTS - CHARTERED ACCOUNTANTS
(MUNSHI’S)
MARKETING - MBA MARKETING
PRODUCTION - MASTER – TEXTILE
- TEXTILE ENGINEERS
MANAGERS - IT EXPERTS
- TOP OF THE LINE
SALES BANKING IMPORTS/ QUALIFICATIONS
EXPORTS
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THE CONCEPT OF EYES & EARS OF MANAGEMENT FAILED
QUALIFICATION LIMITATIONS CAME IN.
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AS THE AUDITOR WAS CONSIDERED
ONLY TO CHECK FINANCIALS.
THE OWNER APPOINTED
•- EITHER A PERSON MORE QUALIFIED
THAN ACCOUNTANT OR
• EQUAL TO ACCOUNTANT’S
QUALIFICATION
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PAYMENT - PRE AUDIT
DEBITS & CREDITS
ACCOUNTS - ARITHMATICAL
ACCURACY
HISTORICAL AUDITOR
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LIQUIDITY & VIABILITY ISSUES
CHANGES IN INTERNAL CONTROL
UNUSUAL TRANSACTION
TRANSACTIONS WITH RELATED PARTIES
TRANSACTIONS INVOLVING OFF BALANCE SHEET ITEMS
ADEQUACY OF DISCLOSURE
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SPECIFIC FINANCIAL STATEMENTS RISKS
Long termed Assets goodwill and other tangible assets.
Impairment of inventory
Revenue Recognition
Accounting Estimates
Deferred taxes
Restructuring changes
Debt covenants
Other than temporary declining in value of
Marketable debt and equity securities.
Pension and other post retirement benefits
New issued standards.
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BUSINESS PERSON
KNOWLEDGE OF INDUSTRY
KNOWLEDGE OF ECONOMY
KNWOLEDGE OF TECHNOLOGY
- BEST PRACTICES – BENCHMARKING
MARKET TRENDS
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- VALUE ADDITION
- WOULD ONLY SEE HISTORICAL ACCOUNTING
ONLY AS IT RELEATES TO FUTURE DECISION
MAKING
- INVOLVED IN ORGANISATION PLANNING &
STRATEGY
- IDENTIFY BUSINESS RISKS & EXPOSURES
- IDENTIFY MISSED OPPORTUNITIES
- RISK MANAGEMENT FOR RISK TAKERS
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- OWNER’S PRE-OCCUPATION DUE TO EXPANSION
OF BUSINESS
- FINANCIAL DISCIPLINE WAS REQUIRED
- PROCESSES GAINED COMPLEXITIES
- TECHNOLOGICAL ADVANCEMENTS
- CREATE CONTROL ENVIRONMENT
- USED AS A TOOL FOR CHECKS & BALANCES
- RISK MANAGEMENT
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UNDERSTANDING RELATIONSHIP BETWEEN RISK
AND CONTROL.
RISK AS POTENTIAL FOR LOSS.
THREAT.
VULNERABILITY.
IMPACT.
PROBABILITY.
RISK OF INFORMATION SYSTEM (AVAILABILITY,
CONFIDENTIALITY INTEGRITY).