AUDITORS REPORT

The auditor's report is a formal opinion, or disclaimer thereof, issued by either an internal auditor or an independent external auditoras a result of an internal or external audit or evaluation performed on a legal entity or subdivision thereof (called an "auditee"). The report is subsequently provided to a "user" (such as an individual, a group of persons, a company, a government, or even the general public, among others) as an assurance service in order for the user to make decisions based on the results of the audit. An auditor's report is considered an essential tool when reporting financial information to users, particularly in business. Since many third-party users prefer, or even require financial information to be certified by an independent external auditor, many auditees rely on auditor reports to certify their information in order to attract investors, obtain loans, and improve public appearance. Some have even stated that financial information without an auditor's report is "essentially worthless" for investing purposes.

Special Audit
A special review entails a comprehensive and objective examination of the business underlying the numbers. It assists management to identify and focus on key areas and issues and provides insights and comfort to them as well as to outside interests. We provide services on specific audit assignments like cost audits, fraud investigations, investment audits, compliance audits, salary audits, certification of sales and other special assignments necessary to provide assurance to management and interested parties.

AU I! "# $A%&I%' (")*A%I+,

$anking -egulation Act, ./0/

12. Audit 34. 5 !he balance6sheet and profit and loss account prepared in accordance with section 7/ shall be audited by a person duly 8ualified under any law for the time being in force to be an Auditor of companies.9 4.A5 %otwithstanding anything contained in any law for the time being in force or in any contract to the contrary, every banking company shall, before appointing, re6appointing or removing any Auditor or Auditors, obtain the previous approval of the -eserve $ank. 4.$5 Without prejudice to anything contained in the (ompanies Act, ./:; 4. of ./:;5, or any other law for the time being in force, where the -eserve $ank is of opinion that it is necessary in the public interest or in the interests of the banking company or its depositors so to do, .7<3it may at any time by order direct that the special audit of the banking company=s accounts, for any such transaction or class of transactions or for such period or periods as may be specified in the order, shall be conducted and may by the same or a different order either appoint a person duly 8ualified under any law for the time being in force to be an Auditor of companies or direct the Auditor of the banking company himself to conduct such

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special audit9 and the Auditor shall comply with such directions and make a report of such audit to the -eserve $ank and forward a copy thereof to the company. 4.(5 !he expenses of, or incidental to, .7/3the special audit9 specified in the order made by the -eserve $ank shall be borne by the banking company.9 475 !he Auditor shall have the powers of, exercise the functions vested in, and discharge the duties and be subject to the liabilities and penalties imposed of Auditors of companies by .123section 77> of the (ompanies Act, ./:; 4. of ./:;59 .1.3and Auditors, if any, appointed by the law establishing, constituting or forming the banking company concerned9. 415 In addition to the matters which under the aforesaid Act the Auditor is re8uired to state in his report, he shall, in the case of a banking company incorporated .273in India9, state in his report?6 4a5 whether or not the information and explanations re8uired by him have been found to be satisfactory@ 4b5 whether or not the transactions of the company which have come to his notice have been within the powers of the company@ 4c5 whether or not the returns received from branch officers of the company have been found ade8uate for the purposes of his audit@ 4d5 whether the profit and loss account shows a true balance .173of profit or loss9 for the period covered by such account@ 4e5 any other matter, which he considers should be brought to the notice of the shareholders of the company.

AUDIT OF INSURANCE COMPANIES

THE DUTIES OF THE AUDITOR UNDER THE INSURANCE COMPANIES ORDINANCE Scope of the Ordinance 5. The Ordinance is app ica! e to a persons "co#panies or indi$id%a s& carr'in( on ins%rance !%siness in Hon( )on( "inc %din( ins%rance !ro*ers& other than those persons noted in para(raph + and those specifica ' e,e#pted !' section 5- "see para(raph .&. Ins%rers /hich are dee#ed to carr' on ins%rance !%siness in or fro# Hon( )on( /i a so fa /ithin the scope of the Ordinance. Section 0"1& pro$ides that a person sha !e dee#ed to carr' on ins%rance !%siness in or fro# Hon( )on( if he opens or #aintains an office or a(enc' in AUDIT Page 2

Hon( )on( for the p%rpose of carr'in( on ins%rance !%siness2 or he ho ds hi#se f o%t as carr'in( on ins%rance !%siness2 in or fro# Hon( )on(. Ins%rers /i fa /ithin this scope if the' are incorporated in Hon( )on(2 ha$e a p ace of !%siness here2 are represented here !' THE DUTIES OF THE AUDITOR OF AN INSURER AUTHORI3ED UNDER THE INSURANCE COMPANIES ORDINANCE

4 PN .-5.0 an a(ent or are ho din( the#se $es o%t as carr'in( on ins%rance !%siness in or fro# Hon( )on(. The fo o/in( /o% d therefore !e inc %ded /ithin the scope of and re6%ired to !e a%thori7ed %nder the Ordinance8 a. a Hon( )on( incorporated co#pan' carr'in( on ins%rance !%siness in Hon( )on(9 !. a Hon( )on( incorporated co#pan' carr'in( on ins%rance !%siness thro%(h an o$erseas !ranch or a(enc'2 /hether or not it is operatin( as an ins%rer in Hon( )on(9 c. an o$erseas incorporated co#pan' carr'in( on ins%rance !%siness thro%(h a Hon( )on( !ranch9 d. an o$erseas co#pan' carr'in( on ins%rance !%siness in Hon( )on( !' #eans of an a(enc'9 e. a capti$e ins%rer2 as defined in section 0"+&9 f. reins%rance co#panies carr'in( on reins%rance !%siness in or fro# Hon( )on( "!%t see para(raph ."!&&9 and (. an' other person ho din( hi#se f o%t as carr'in( on ins%rance !%siness in or fro# Hon( )on(. :. The ocation of the ris*s is not re e$ant in deter#inin( /hether a partic% ar entit' fa s /ithin the scope of the Ordinance. Th%s2 for e,a#p e2 an ins%rer or a reins%rer /ho is incorporated

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o$erseas and /ho has not esta! ished a p ace of !%siness in Hon( )on(2 is not represented !' an a(ent in Hon( )on(2 and does not ho d hi#se f o%t as carr'in( on ins%rance !%siness in or fro# Hon( )on(2 can accept ins%rance or reins%rance pre#i%#s re atin( to Hon( )on( ris*s2 /itho%t ha$in( to !e a%thori7ed %nder the Ordinance. +. Under section :"-&2 ; o'd<s and an association of %nder/riters appro$ed !' the IA are a o/ed to carr' on ins%rance !%siness in or fro# Hon( )on( /itho%t ha$in( to !e a%thori7ed %nder the Ordinance. A so2 the fo o/in( persons2 a tho%(h in$o $ed in ins%rance !%siness2 do not ha$e to !e a%thori7ed %nder the Ordinance8 a. a Hon( )on( incorporated co#pan' /ith an o$erseas incorporated s%!sidiar' that carries on ins%rance !%siness o%tside Hon( )on(2 pro$ided that the Hon( )on( ho din( co#pan' is not itse f an ins%rer9 !. an ins%rance a(ent "!ein( a person /ho ho ds hi#se f o%t to ad$ise on or arran(e contracts of ins%rance in or fro# Hon( )on( as an a(ent or s%!a(ent of one or #ore ins%rers&. Ho/e$er2 an ins%rer is re6%ired to re(ister its appointed ins%rance a(ents in accordance /ith section :: and the IA has the po/er2 a so %nder section ::2 to direct the ins%rer to de=re(ister its appointed ins%rance a(ents %nder certain conditions. .. Section 5- specifica ' e,e#pts the fo o/in( persons fro# the pro$isions of the Ordinance8 a. an' !od' of persons carr'in( on ins%rance !%siness in Hon( )on( /hose (ross pre#i%#s do not e,ceed H)>5552555 in an' financia 'ear and /ho are !o%nd to(ether for certain specified p%rposes !%t not for the p%rpose of (ain9 !. persons carr'in( on on ' reins%rance !%siness in Hon( )on( "%n ess incorporated in Hon( )on( or2 if incorporated e se/here2 /ho ha$e a p ace of !%siness in Hon( )on( or are represented in Hon( )on( !' an a(ent or an' other person or partnership ha$in( a p ace of !%siness in Hon( )on(&9 AUDIT Page 4

c. re(istered trade %nions "s%!?ect to certain i#itations&9 THE DUTIES OF THE AUDITOR OF AN INSURER AUTHORI3ED UNDER THE INSURANCE COMPANIES ORDINANCE

5 PN .-5.0 d. re(istered co=operati$e societies9 e. the Hon( )on( E,port Credit Ins%rance Corporation9 f. !an*s2 restricted ins%rance icence !an*s and deposit=ta*in( co#panies carr'in( on

!%siness2 i#ited to certain on( ter# or (enera ins%rance !%siness carried on so e ' for the p%rposes of their !an*in( or deposit=ta*in( !%siness9 (. the Credit Union ;ea(%e of Hon( )on(9 h. a reco(ni7ed c earin( ho%se "as defined in section 5-"h&&9 i. a person /ho is a%thori7ed %nder Part III of the Sec%rities and F%t%res Ordinance "as defined in section 5-"i&&. @. Under section 51 the Chief E,ec%ti$e in Co%nci has po/er to e,e#pt an' ins%rer fro# an' of the pro$isions of the Ordinance or to #odif' or $ar' an' of its pro$isions in respect of an' ins%rer.

Audit "f +ducational Institutions

Audit of books of educational institutions like school, college, universities etc. or other such institutions which are engaged in the educational field is known as audit of educational institutions. Auditor should check income and expenditure account and balance sheet of such institutes in order to verify and report the true and fairness of results presented by income statements and financial position presented by the balance sheet. 'enerally, the methods and procedures for vouching and auditing is same even though an auditor of educational institution should perform following tasks?

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.. !he auditor should go through the University Act. !rust deeds and should note the rules and regulations relating to accounts. !he governing body may pass resolutions from time to time in respect to accounts. A copy of minutes books should be made available to him so that he may be able to confirm whether the decision of the government body have been compiled with. 7. Auditor should obtain a copy of budget or financial statements to study of different heads of income and expenditure. 1. Auditor should thoroughly assess the strength of internal check. 0. Auditor should vouch the grant6in6aid from the government carefully. :. Auditor should verify the receipts of monthly fees from students, from counterfoils or carbon copy of the receipts. Ae should also see whether cash received has been banked daily or not. ;. "ther charges from the students such as examination fees, laboratory fees, fines etc. should be carefully verified. >. Any fees received in advance should be properly adjusted. <. !he concession of fees and other charges should be duly authorised by the proper authority. Any charges becoming irrecoverable should be written off only after proper authority has recommended. /. Any grant6in6aid or funds received for a particular purpose must be utilised for the same. .2. !he donations and other subscriptions from the various authorities have been accounted for and acknowledged. ... !he income from property, investment etc., should be properly verified from the vouchers. .7. Auditor should vouch the amount of salaries paid with the ,alary -egister. Any increment given to an employee shall be duly sanctioned.

.1. !he staff provident fund should be verified and it should be seen that it is invested as per the rules.

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.0. !he establishment expenses must be carefully vouched and it should be seen that capital expenditure has not been treated as revenue expenditure or vice versa. .:. !he payment of scholarship should be verified with the receipt from students and ,cholarship -egister. .;. All the assets and liabilities should be properly exhibited in the balance sheet. .>. !he stock of e8uipment, stationary, furniture should be carefully verified. .<. While making payment of staff salaries, income tax should be deducted at source and shall be duly deposited with the Income !ax epartment.

EFFICIENCA AUDIT
Efficiency audit:1. Efficiency audit is related to that whether corporate plans are effectively executed. 2. In this, auditor investigates the reasons of variances in actual perfor planned perfor ance. pany are properly utili"ed or not. !. It also investigates that capital resources of co #ropriety audit:1. It is related to that whether executive plans and action are perfectly executed or not. 2. In this auditor investigates that the planned expenditure are designed to give opti u results or not. expenditure on capital as well as current e other alternative plan of action. !. It also investigates, whether the return fro operation could $e $etter $y so ance and

Social audit is a process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground.[1] Civil society organisations (CSOs), nongovernmental organisations (NGOs), political representatives, civil servants and workers ofDungarpur district of Rajasthan and Anantapur district of Andhra Pradesh collectively organise such social audits to prevent mass corruption under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).[2]

Background
A grass roots organisation of Rajasthan, Mazdoor Kisan Shakti Sangathan (MKSS) is believed to have started the concept of the social audit while fighting corruption in the public works in the early 1990s. As the corruption is attributed to the secrecy in governance, the 'Jansunwai' or public hearing and the right to information (RTI), enacted

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in 2005, are used to fight this secrecy.[3] Official records obtained using RTI are read out at the public hearing to identify and rectify irregularities. "This process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground is referred to as a social audit." [4] Participation of informed citizens promotes collective responsibility and awareness about entitlements.[5]

Cost auditing
From Wikipedia, the free encyclopedia

Cost Audit represents the verification of cost accounts and check on the adherence to cost accounting plan. Cost Audit ascertain the accuracy of cost accounting records to ensure that they are in conformity with Cost Accounting principles, plans, procedures and objective.[1] Cost Audit comprises following;

1. Verification of the cost accounting records such as the accuracy of the cost
accounts, cost reports, cost statements, cost data and costing technique and 2. Examination of these records to ensure that they adhere to the cost

accounting principles, plans, procedures and objective.

Objectives of Cost Audit

1. Prospective Objective: Under which cost audit aims to identify the undue wastage or losses and ensure that costing system determines the correct and realistic cost of production. 1. Constructive Objectives: Cost audit provides useful information to the

management regarding regulating production, economical method of operation, reducing cost of operation and reformulating Cost accounting plans .

Types of Cost Audit

1. Cost Audit on behalf of the management: 2. Cost audit on behalf of a customer 3. Cost Audit on behalf of Government 4. Cost Audit by trade association 5. Statutory Cost Audit

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Qualification
Basic qualification for a cost auditor is the prescribed examinations and practices by the professional & Regulatory body for Cost & Management Accountancy of the country or in case a person is the member of other professional bodies, exemption should be allowed to him/her under the mutual recognition agreements (MRAs) to become a cost auditor.

Cost Audit Procedures

Cost audit comprises following three steps; 1. Review 2. Verification 3. Reporting

TAB AUDIT
!he provisions for tax audits in India are covered under section 00A$ of the Income !ax Act ./;.. As per section this section, every person who falls under one of the categories listed below shall have their accounts audited by a practicing chartered accountant 4(A5, and have an audit report submitted by the due date for the filing of income return.

Any person carrying on a business whose total sales, turnover or gross receipts in the business exceeds -s.. crore@ or Any person carrying on a profession whose gross receipts exceeds -s.7: lakh@ or Any person carrying on a business where the profits and gains from the business are determined on a presumptive basis under section 00A+, 00$$ or 00$$$, and who has claimed their income to be lower than the profits or gains of his business@ or

Any person carrying on a business whose income is determined on a presumptive basis under section 00A and who has claimed such income to be lower than the profit of their business, yet exceeds the maximum amount which is not chargeable as income tax.

,uch an audit report shall be filed using #orm 1(A 4in case of a company5, #orm 1($ 4other than a company5, and shall be accompanied with #orm 1( . !he due date of filing a return, in the case where an assessee is re8uired to furnish an audit report, is ,eptember 12th after the end of the financial year. If the person is re8uired by any other law to have their accounts audited, it shall be sufficient compliance within the provisions of this section if the accounts are audited before the specified date and a report of the audit is furnished by that date, including a further report by a (A in the form prescribed under this section. !he basic 8uestion that then arises is in regards to the definition of turnover. oes it refer to gross

turnover or net turnoverB oes it include value6added tax, excise duty, or service taxB A summarised meaning of turnover, after considering the guidance notes of the Institute of (hartered Accountants of India 4I(AI5, states that turnover is the aggregate value for which sales are effected or services are rendered. It includes all type of taxes applicable on such goods or services.

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If the tax audit report has not been obtained from the (A on or before the due date of filing an income return, penalty under section 7>.$ shall be attracted. !he penalty is e8ual to half the percent of total sales, turnover or gross receipts, or -s.. Cakh D whichever is less.

Management Audit' is a systematic examination of decisions and actions of the management to analyse the performance. Management audit involves the review of managerial aspects like organizational objective, policies, procedures, structure, control and system in order to check the efficiency or performance of the management over the activities of the Company. Unlike financial audit,[1] management audit mainly examine the non financial data to audit the efficiency of the management. Somehow audit tries to search the answer of how well the management has been operating the business of the company? Is managerial style well suited for business operation? Management Audit focuses on results, evaluating the effectiveness and suitability of controls by challenging underlying rules, procedures and methods.[2] Management Audit is an assessment of methods and policies of an organization's management in the administration and the use of resources, tactical and strategic planning, and employee and organizational improvement. Management Audit is generally conducted by the employee of the company or by the independent consultant and focused on the critical evaluation of management as a team rather than appraisal of individual.[3]

Objectives of Management Audit

1. Establish the current level of effectiveness 2. Suggest Improvement 3. Lay down standards for future performance

Audit Procedures in Management Audit

Generally auditor deploy following audit procedures to conduct the management audit. 1. Questionnaire 2. Interview with employee and managers

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