07 October 2013
in audit exam, wht all pts v shud learn in special audit, verification n vouching to secure good mrks.. instt's study mat mentions too many points impossible to b learned. .
08 October 2013
Remember code word – a – affairs - I D -injury or damage S- solvency - Sec 233A - Power of Central Government to direct special audit in certain cases. (1) Where the Central Government is of the opinion- (a) that the affairs of any company are not being managed in accordance with sound business principles or prudent commercial practices ; or (b) that any company is being managed in a manner likely to cause serious injury or damage to the interests of the trade, industry or business to which it pertains ; or (c) that the financial position of any company is such as to endanger its solvency ;
Inspection This covers the physical review or examination of records, documents and tangible assets. An Observation auditor observing the client's inventory count to gain evidence that the inventory figure in the financial statements had been arrived at accurately. 3. Enquiry Seeking relevant information from knowledgeable persons inside or outside the enterprise. An example in substantive testing is asking management for an explanation as to why a receivable has, or has not, been treated as bad.
4.Computation
Checking the arithmetical accuracy of records or performing independent calculations, for example computing or re-computing the depreciation expense for the year. 5. Analytical procedures
You should note that these procedures are mainly used in substantive testing rather than as a test of controls. They may help the auditor to understand relationships between figures in the financial statements. This is sometimes referred to as the business approach to auditing.
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