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ICAI releases Guidance Note on Audit of Banks (2023 Edition)

Auditing and Assurance Standards Board The Institute of Chartered Accountants of India 16th March, 2023 Guidance Note on Audit of Banks (2023 Edition)   A. Foreword and Preface of Past Years B. Text of Guidance Note on Audit of Banks (2023 Edition)   C. Appendices of the Guidance Note on Audit of Banks (2023 Edition) Appendices of Section B - Bank Branch Audit of Guidance Note on Audit of Banks (2023 Edition) Appendices of Section A - Statutory Central Audit o..

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ICAI | Implementation Guide to SA 580 Written Representations

Introduction and Overview 1.1 The purpose of this Implementation Guide is to provide practical guidance on implementation of the principles laid down in Standard on Auditing (SA) 580, "Written Representations" (hereinafter referred as "the Standard"). The Standard is effective for audits of financial statements for periods beginning on or after April 1, 2009.   1.2 The Standard deals with the auditor’s responsibility to obtain written representations from ..

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Detecting Fictitious Sales: A Guide to Identifying Red Flags and Protecting Your Business

Identifying fictitious sales can be a challenging task, but there are several ways to detect red flags that may indicate the presence of fictitious sales. Here are some steps to follow: 1. Analyze sales patterns Look at sales patterns over time to see if there are any unusual spikes or dips that can't be explained by normal market fluctuations.   2. Review customer records Check the customer records to ensure that they are legitimate and that the sales were made to actual..

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Audit of Charitable Institutions

Charitable Institutions refer to those organizations which are constituted and worked for the purpose of public charity. It may be a trust registered under respective act or a company registered under section 8 of the Companies Act, 2013 (or section 25 of the Companies Act, 1956) for the cause of social wellbeing. Charitable Institutions can be a Public Trust, Society, Section 8 Company, Co-operative Society, Multi State Co-operative Society, Non-Profit Organizations etc. They can be gover..

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Importance of Follow up procedure in Internal Audit

Internal audit is a process which provides assurance to the management regarding company’s risk management, control procedures and their operational efficiency. The recommendations provided by the Internal auditor and which are agreed by the management may not be implemented during the course of audit due to various circumstances. It may require some additional resources or adoption of a different methodology. Thus, there may be delay in the implementation of those recommendations. Hence t..

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Forensic Accounting vs Normal Auditing: A Comparative Analyses

Forensic Accounting is an emerging field for professionals. It is somewhat different than other conventional accounting and auditing practices. Therefore, it becomes necessary to understand the differences between a normal audit and a forensic accounting. A normal audit is designed to provide assurance that the financial statements of an organization are accurate and reliable. On the other hand, a forensic accounting is designed to uncover potential fraud or misappropriation of funds. Unli..

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ICAI issues Framework for Social Audit Standards

Introduction 1. This Framework defines and describes the elements and objectives of a social audit performed by social auditors. It provides a frame of reference for: (a) Social auditors when performing social audit i.e., social impact assessment of project/ program executed by social enterprises. (b) The responsible party, the engaging party, if any, and other stakeholders who are the intended users of social audit report. This Framework does not itself establish standards or provid..

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Comments On Publication Of Annual Transparency Reports By Auditor/Audit Firms

DHFL has diverted Rs 34,615Cr borrowed from banks. The CBI has alleged that DHFL‘s promoters formed 87 shall companies, created more than 2,60,000 "Fictitious borrowers' and set up "Virtual Branch "to divert money borrowed from banks". In case NEFRA thinks that Publication of Annual Transparency Reports by Auditors/ Audit Firms could control financial frauds like DHFL case, the NEFRA may go ahead with the implementation of the proposal of “Publication of An..

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Appointment Process Of Cost Auditor

An appointment of a cost auditor refers to the process of appointing an independent expert to review and assess the costs incurred in a legal matter. This is typically done in cases where there is a dispute over the amount of costs that should be awarded to one party or the other, or where a court wants to ensure that the costs being claimed are reasonable. The cost inspector will review the costs incurred by the parties and make recommendations to the court on how much should be awarded. The co..

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Cost Auditing & its Process

Cost auditing is the process of examining and verifying the accuracy and completeness of a company's cost accounting records. The purpose of cost auditing is to ensure that a company's financial statements accurately reflect the cost of goods sold and the cost of operating the business. This helps to ensure that a company is pricing its products or services correctly and that it is not overstating or understating its costs.   Advantages of cost auditing Ensures accuracy ..

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Audit Report & its Format

An audit report is a document that presents the findings of an audit. Audits are conducted to assess the accuracy and compliance of financial statements and records and an audit report is the written documentation of the auditor's findings and conclusions. The report includes the auditor's opinion on the financial statements, any identified material weaknesses or significant deficiencies, and any recommendations for improvement. The report is typically addressed to the company's mana..

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ICAI releases ED for issuing guidance note on audit of public charitable institutions u/s 12A

Direct Taxes Committee The Institute of Chartered Accountants of India Sub: Exposure Draft for issuing Guidance Note on Audit of Public Charitable Institutions under section 12A of the Income-Tax Act, 1961 for Public Comments   The Exposure Draft for issuing 'Guidance Note on Audit of Public Charitable Institutions under section 12A of the Income-Tax Act, 1961', has been issued by the Direct Taxes Committee for comments. The Exposure Draft can be assessed here. If you d..

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Additional methods for detection of fraud in the financial statement

The corporate world has witnessed an increasing amount of corporate fraud or White-Collar crimes recently. With large number of frauds being unearthing on almost daily basis, the auditors who audits the financial statement of such corporates have to take the blame. The expectation of auditors has thus increased manifolds and auditors are expected to behave like blood-hound instead of watch dogs. The auditors who audit the financial statements, cannot be expected to use the conventional method..

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ICAI | Draft Bank Branch Auditors' Panel (MEF) of CAs/firms for the year 2022-23

Professional Development Committee The Institute of Chartered Accountants of India 2nd January, 2023 Draft Bank Branch Auditors' Panel (MEF) for the year 2022-23 We are pleased to inform that the Draft Bank Branch Auditors' Panel (MEF) of Chartered Accountants/firms for the year 2022-23 has been hosted at   Kindly note that it is a Draft Panel and the category of the applicants of Multipurpose Empanelment Form for the year 2022-23 is subject to verifica..

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An Overview Of Statutory Audit

A statutory audit is an independent examination of an organization's financial records and statements by an external auditor. The purpose of a statutory audit is to ensure that the organization's financial records are accurate and reliable, and to provide assurance to stakeholders that the organization is complying with relevant laws and regulations. Advantages Of statutory audit There are several advantages to a statutory audit checklist: Increased confidence in financial st..

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Materiality and its relevance in audit

Ques. What is Materiality? Ans. It is a Benchmark used to obtain reasonable assurance that an audit does not detect any material misstatement that can significantly impact the usability of financial statements. Materiality is a relative rather than an absolute concept. SA 320 "Materiality in Planning and Performing an Audit" explains materiality: Misstatements, including omissions, are considered to be material if they, individually or in the aggregate, could reasonably be exp..

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GST Audit: A Brief Analysis

GST Audit is verification of the original records, returns and other documents kept with the taxpayer at the business premises (including all Additional Place of business) and correlating them with the information furnished by the taxpayer on the GST Portal in his/her returns/statements to verify the correctness of reported turnover, exemptions/deductions claimed, rate of tax applied, ITC and Refunds claimed etc. The tax officer can examine the documents of taxpayer’s original records eith..

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ICAI issues implementation guide to Standard on Auditing (SA) 230

Introduction Concept of Documentation 2.1 Audit, according to Spicer and Pegler, "may be said to be such an examination of the books, accounts and vouchers of a business as will enable the auditor to satisfy that the Balance Sheet is properly drawn up, so as to give a true and fair view of the state of affairs of the business and the Profit or Loss for the financial period, according to the best of his information and the explanations given to him and as shown by the books, and if not..

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Audit and Accounts

1. Debits and credits are twins of Accounting, On which depend the efficacy of Accounts. 2. 'Debits and credits' are like two genders, The former structure accounts as the latter life. 3. Commercial transactions are reduced in books to figures. On which depend living figures. 4. Audit without assurance is like A heart, that's without beat. 5. What a medical check up to health, Audit is to accounts. 6.' Qualification' is the gradation of acquired knowledge,..

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ICAI | Penalty of Rs 5 lakh imposed on CA for exceeding tax audit limit prescribed u/s 44AB

The Disciplinary Committee of ICAI has imposed penalty of Rs.5 Lakh and removed Chartered Accountant from Register of members for a period of 03 (Three) Months for professional misconduct on conducting tax audit under section 44AB of Income Tax Act, 1961 beyond the limit prescribed by the Institute during financial years 2010-11, 2011-12 and 2013-2014. Findings of the Committee The Committee noted the following:- Section 44AB of the Income-tax Act, 1961 came into force w.e.f. 01.04.1985..

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