ADVANCED AUDITING AND PROFESSIONAL ETHICS:
Hope you are doing good.
Sorry for the delay in the Article.
This is in continuation with my previous Articles,
/articles/cracking-the-ca-final-code-group-1-paper-1--21588.asp#.VIH1SjGUcYU – Financial Reporting
/articles/cracking-the-ca-final-code-group-1-paper-2--21627.asp#.VIH1RzGUcYU – Strategic Financial Management
“Audit” – What comes to your mind when you hear this word - Statutory audit, Internal audit, Tax audit or perhaps Stock audit?
Before starting this subject you might as well think, what is there to study in this subject??
After all we have dedicated 3 years (or perhaps more) of our Body &
Mind (sometimes not) towards it.
I have seen many students flunking in this subject, but don’t worry I am here to guide you on your “Audi-ting” journey.
1. Firstly take out the 2 most heavy books from your desk (undoubtedly have to be Audit SM’s).
2. Please remove the notion from your mind that – But these are very fat, How will I study? Imagine by only learning 2 books you are one step closer to getting 2 very prestigious letters in front of your name? As also mentioned in my earlier articles that SM is “The Bible”.I got 77 in this subject and believe me its easy.
3. Ask yourself did you only buy those books from the Institute so that after 3 years you can sell them and buy yourself a “McDonalds Happy meal” and really ‘Be Happy’?
Priority wise Chapters:-
1. Professional Ethics:
A sure shot 16 marker – Should not miss this for God sake!
- One must learn the schedule/clause/part by heart along with the provisions (Sorry no other option – if you want to score high)
- One more thing students miss is that along with this also write the disciplinary action to be taken if the CA is held guilty along with the penalty and imprisonment under the relevant body imposing such action.
2. Standards on Auditing:
Another very important topic and asked mostly in the compulsory question are the SA’s. It is very important for all of you to remember the name of the SA along with the number along with the provisions.
If you find it difficult to remember, try using a technique to remember.
I have developed/come across the following technique to remember some of the SA’s which might be useful to you all.
b. SA 210 - "Agreeing the Terms of Audit Engagements" – 21 is considered a legal age to get married so “Engaged”
c. SA 220 - "Quality Control" – Quality when pronounced sounds similar to 220 (when pronounced)
d. SA 230 "Audit Documentation" – Generally Articles do so much of documentation that no one forgets this SA.
e. SA 240 - "Fraud" – People associate ‘420’ with fraud so 240 is just 420 in different order
f. SA 250 - "Laws and Regulations" – When you are caught by traffic police for breaking laws, you have to pay a fine of Rs. 250.
g. SA 260 and SA 265 – Both related to Communication
h. SA 299 - "Joint Auditors" – 99 are together are so “Joint”
i. SA 300 – "Planning" – First SA of the series and planning also comes first in doing any task
j. SA 320 – Again pronouncing 320/Materiality
k. SA 402/SAE 3402 – Both relate to Service Organisation.
l. SA 505 – "External confirmations" – Generally both the both the balances (as per our books and as per the third party should match) – So balance in my books is Rs. 5 and as per third party is also Rs.5.
m. SA 560 – "Subsequent events" – 6 comes subsequent to 5 in (560)
You can make similar techniques for other topics too.
3. Company audit and Audit report:
These two topics are fairly easy; don’t forget to do CARO.
And please practice the drafting of Audit reports once (Have been given in the study material elaborately in the relevant SA’s).
4. Other Chapters:
For all the other chapters, no option but to study them all.
But I can give you hints based on the my analysis of past papers –
Banking and Insurance chapters cover hell lot of pages of the study material but whenever ICAI has asked them they have come together in the same question (So it is possible that you can skip the question in the choice).ICAI is unpredictable but if you want to take the risk go for it.
Peer Review – Covers only a few pages, so an easy picking.
Generally a 4 marker is expected from the following chapters –
> Audit under Fiscal laws
> Audit in CIS
> Investigation and due diligence
> Audit committee and corporate governance
Any other help in any specific chapter or in the approach to study, will be more than happy to help.
Will be glad to hear from all of you!!!