Professional Documents
Culture Documents
Audit Settlement
Audit Settlement
AUDITING
1. Definition
Audit is an independent examination of the
financial statements of an organization /
enterprise by an appointed auditor in pursuance
of his appointment and in compliance with the
relevant statutory obligations.
In general, audit is a mechanism within the
process of accountability where the performance
of the resources of an organization is checked on
behalf of interested parties.
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2.
Origin of Audit
3.
Objectives of Auditing
i.
4.
Scope of Audit
5. Types of Audit
i.
Internal Audit
(Certification of Accounts).
viii.Programme Audit
(Audit of Projects)
Cash book
ii.
Stock Register
iii.
iv.
Contingent Register
v.
Service Books
vi.
Log Books
vii.
Contingent Bills
viii.
Auction File
ix.
7. Qualities of an Auditor
i.
Professional Knowledge
ii.
Integrity
iii.
iv.
Impartiality
v.
Courtesy
vi.
Confidentiality
Vigilance
viii.
Positive attitude
ix.
Diligence
x.
Communication Skill
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DAC
ii. SDAC
iii. PAC
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i.
DAC
Purpose of DAC:
Prompt action by the department for attendance /
settlement of irregularities notices in audit and reported in
Inspection Reports issued by the Audit Department.
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(Chairman)
(Member)
(Member)
Function of DAC
i. The Committee will examine the irregularities pointed out by
Audit through their Inspection Reports or otherwise and
recommend action to be taken in respect of irregularities.
ii. It will be the duty of Secretary of the Administrative
Department concerned to obtain Govt. orders ordinarily
within one month of the date of recommendation made by
the Committee.
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SDAC:
Purpose:
Prompt action by the department for attendance /
settlement of Advance Paras / Proposed Draft Paras.
Members:
i.
ii.
A representative of the Finance Department of
appropriate level.
(Member)
iii.
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Working Papers:
i. Working paper of at least 25 Audit Papers.
ii. Working paper duly supported by relevant support
documents will be submitted to the Director General
Audit concerned.
iii. Working paper should contain a certificate that no
Draft Paras has been included therein.
iv. Settlement of paras takes place if the department
shows compliance.
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PAC:
Limitations of Audit
i.
Advisory role.
ii.
No authority to penalize the auditee.
iii.
Orthodox methods of auditing.
iv.
Incompetent audit staff.
v.
Late consideration of Audit Report in PAC
vi.
Element of corruption / dishonesty by the
auditors.
vii. Non-availability of facilities incentives to
the Auditors.
viii. Non-availability of safety protection
against threats from auditees especially
Police Deptt.
ix.
Efficiency of the Auditors depends on the
number of paras not on quality of paras.
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Appropriation Accounts
The Appropriation Accounts and the
Report thereon consist of the Appropriation
Account proper and the Audit Report
thereon. The Audit Report giver the general
view of the results of audit and draws
attention to important matters, if any,
outstanding from the previous Reports. The
Appropriation Accounts proper consist of: -
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a).
a grand summary giving a general view of the
total expenditure under each Grant / Appropriation
compared with the total Grant /
Appropriation
sanctioned there under.
b).
audited accounts of all the expenditure of the
year, whether Authorized or Charged in the
form of a separate appropriation account for each
Grant / Appropriation, with any important
observations which it is considered necessary to
make as a result of audit investigation, and
c).
Finance Accounts
The Finance Accounts and Report thereon deal with
the Accounts of the Province as a whole including
transactions relating to debt, deposits, sinking funds,
advances suspense accounts and remittance business
and general financial matters that do not strictly fall within
the functions of the Public Accounts Committee as laid
down in rule 15 of the rules of Procedure of the Provincial
Assembly of the Punjab which have been reproduced in
Part II of Appendix A. This document though laid before the
Provincial Assembly is not referred to the Public Accounts
Committee. After it is laid before the Provincial Assembly,
the Finance Department should examine it and take action
wherever it is called for and report the action taken to
Accountant General, Punjab.
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ii.
iii.
iv.
2.
3.
4.
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Under Local Government Ordinance 2001, Article 115 deals with audit
of the District Govt.
1. The Director Local Fund Audit shall conduct regular annual audit of
the Local Funds and the Director-General Audit of the Province
shall undertake audit of the District, Tehsil and Town Provincial
Accounts during a financial year.
2. Upon request of a Nazim, the Provincial Director, Local Fund Audit,
shall cause to be conducted an audit of the respective Local Fund.
3. Upon request of a Zila Nazim, Tehsil Nazim or Town Nazim
the
Director-General Audit of the Province shall cause the audit of
District Provincial Account, Tehsil Provincial Account or, the case
may be, Town Provincial Account and shall forward his report to
the concerned Nazim and Council.
4. The report of the Local Fund Audit shall be placed before the
concerned Nazims and the Accounts Committee of the respective
Councils for necessary action.
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5.
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Advantages of Auditing
1. Detection and prevention of errors and frauds become easier
2. Audited accounting information, greater reliability and
authenticity
3. Acceptability by the authorities
4. Speedy processing of loans
5. Settlement of disputes in partnership
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Audit Exercise
Mr. ABC is working as DDO in an organization. What
steps he should exercise while making the budgetary
spending under each head in his office?
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Solution
1. Provision of funds
2. Sanctions of expenditures
3. Claims on proper format
4. Period of sanction
5. Rules of payment
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Solution (Conti..)
6. Payment mode (cheque or cash)
7. Classification of expenditure
8. Payment on prescribed rates
9. Accounting of payments
10.Reconciliation with accounts office
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Thank
You
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