Please help very very important question regarding auditing

Thanks for the query, Madhusudan,
Your query relates to Standards on Auditing issued by ICAI, The relevent SA 600 on Using the work of Another Auditor, provides as follows,
The principal auditor is required to perform procedures to confirm competence of other auditor, ie branch auditor including the procedures applied by him, adequacy of work performed, discussion with management about audit findings by the branch auditor, perform tests etc.
ALSO THE PROCEDURES INCLUDE VISITING THE BRANCH EXAMINATION OF BOOKS OF ACCOUNTS OF BRANCH IF THE PRINCIPAL AUDITOR DEEMS IT ESSENTIAL.

The second issue is answered by SA 230 on "Documentation" which clearly provides that the working papers of an auditor are his property and thus he can deny them to make available to any one, unless law provides for a disclosure such as in case of peer review by ICAI(it is a diff. story altogether, main point is that law presently does not require tge branch auditor to disclose his working papers to Principal auditor)
He at his discretion provide the working papers or part of it to the CLIENT, provided it does not undermine his independence or validity of his work performed.

Thus, to conclude,
1. Principal auditor may visit the branch if he feels it to be necessary, no explicit permission is required from anyone.
2. Principal auditor can not inspect the working papers of branch auditor, unless he willingly provide them to the client(though co-op. and co-ordination between principal and branch auditor is expected but that too can not force branch auditor to give away the working papers).

Hope above helps and provide you with legal backing you wanted,
Should you need further info. or in case of any query,
Please revert,
Abhimanyu

can you provide any pdf from icai.org or any book because rpsc board relies only on authentic information .....

i can't argue with them because they have this so called rule to rely only on books or authentic source

Thanks for reverting,
Please visit and download SAs from the website of ICAI, numbers SA 230 and 600 within the text you will find the application material in which you would be able to easily find the above mentioned paras,
I believe the para no. are
A25 of SA 230 Documentation and
10-18 of SA 600 Using the work of another auditor.
You can get SAs here,

https://www.icai.org/new_post.H T M L?post_id=450&c_id=141

That should help, for any issue revert back,
Thanks,
Abhimanyu

Thanks for reverting,
Please visit and download SAs from the website of ICAI, numbers SA 230 and 600 within the text you will find the application material in which you would be able to easily find the above mentioned paras,
I believe the para no. are
A25 of SA 230 Documentation and
10-18 of SA 600 Using the work of another auditor.
You can get SAs here,

https://www.icai.org/new_post.H T M L?post_id=450&c_id=141

That should help, for any issue revert back,
Thanks,
Abhimanyu

para 10-18 of SA 600 does the work specially para 10 really really thanks Abhimanyu i will be able to object on this question now. Thanks a lot....
 

thanks to you abhimanyu that question was changed now there is another one if you can help...

isn't this question debatable. This was asked in a exam any one who can give me full proof. which of the following is not a business transaction : 1. Appointment of Ms usha as typist on a salary of 5000 per month (for personal work) 2. Payment of 5000 out of business bank account for school fees of child. please tell which one is correct and which is not ..and if both are correct. Please provide a solid proof, or logics.  
 

Thanks for the reply, I am happy that I was helpful,

For the present query, let me first shoot the answer what I think, I think it's No.1 which is not a business transaction.
It is my view but I would not lay fence to guard it, though I do have a theory which is followed by me to get on to it, which I will discuss latter.
Nevertheless, I can say that some learned person could raise a point or two to reprimand No.2 out of the preview of a Business transaction, thus it could fall into a debate, thought however I think it should not.

But before I reveal my learning behind saying that No.1 is not a Business transaction and not the No.2, could you please provide me with knowledge that you have gathered on this issue, so that I can create an one to one conversation by learning the thinking behind this which is going into your mind or information you have so far gathered.

Sorry, for asking you in reverse but to understand the issue it is required and for, this long msg.

Regards,
Abhimanyu

HI abhimanyu thanks for your reply,

here is the question itself

as per question it is not clear whether this child is of employee or himself or they are doing a charity sort of work. As per concept of seperate entity -  The separate entity concept is the basic accounting concept that we should always separately record the transactions of a business and its owners. Otherwise, there is a considerable risk that the transactions of the two will become intermingled.

 

The problem is that this question has been given in class 11 th books and question 1 is treated as answer, though 1 is right but what about 4 i am a bit confused.

 

I am very sorry for being too unresponsive for such a long time,
Now, Since fundamentally a transaction in business must create an asset or liability because of that deal, however in case of (1), neither a liability nor an asset is created at the time of deal, it will though create after completion of work or specified period that too if payment is made vide the business money/bank a/c.
In case of (4) there is a transaction of payment of money on account of drawings/loan, that means it is an asset for the company in the form of money given.

Hope it helps, I was a little concise about explanation though, but if you have doubts please write back for prompt reply.

Thanks,
Abhimanyu

i am still confused on option(4) as it was not stated that this money is being given in form of a loan. And it is also not showed that whose child this is, it can be his own child or somebody else. Please explain 4th one

Thanks for writing,
As for who's child, this is obvious that he is of business owner otherwise it would have been stated clearly.
And, moreover it wouldn't make any difference in this context of it being a business transaction, since there was a flow of business resources due to this transaction, in any case, be it charity, loan or drawing, this deal would be regarded as business transaction.
Let me explain you this in another fashion,
If a payment is made out of business money, due to which either an expense is booked or asset is created or liability is reduced.
In whatever manner such transaction would be a business transaction because one part of the transaction is money of business.

Does this make sense to you!
Reply with you concern and understanding of this.

Thanks,
Abhimanyu