What to see in a b/shet given for stat audit

As an stat auditor,what should be focussed on in a balance sheet or p& L

i mean when a auditor examine a balance sheet or whole final accounts ,what should be kept in mind..whether he check the balance sheet or p/L items with a presumption/intention that client must have done some sort of window dressing in by inflating incomes in order to defraud its stakeholders OR the client must have tries to show lower profits by showing genuine exp but bogus sales..

More clearly..what co always to want to have while presenting or preparing its balance.....what should always be the client's/cos intention while preparing or presenting its balance sheet..whether company/client always want to show less profit so that tax will become lower OR they prepare their balance sheet keeping in mind to attract or defraud its investor or shareholder by overstating income in their final accounts

I know all these can be able to detected after examining the each and every schedule and routing checking but still i have seen many experts/partners who easily able to recognise or detect any wrongdoing just by going through balance sheet or p/l(i.e final accounts)...i know this comes from hard core experience of auditing but if i would know the company intenton in advance...then i can also start reading balance sheet that way.(.i.e with that perspective.) and enhance my ability to judge the balance sheet..

nutshel ques..wht co wants..to prepare accounts having less profit (to save taxes) or to window dresses or overstated income (to attract it investor toward co to generating faith or deploy their money )

Window dressing and creating secret reserves are frauds of opposite natures and you may not really judge off hand about what the company may really be doing without knowing the client. My advice is to approach the financials objecvtively, going by basics of financial and accounting concepts. Do not have any prejudice in mind. But if you need to know this for carrying out the audit, please take inputs from partners of your firm or other seniors since they know the clients better based on their experience in the audit in the past years.

Generally, a listed company or a company with plans to get listed in near future may involve in window dressing (not always, there are scrupulous companies also who present truthful picture) whereas closely held companies may resort to secret reserves creation.