Principles of Auditing

BCM6001

L T P C
4 1 0 4
(48 Hours)
Subject Objectives:
This course aims at imparting knowledge about the principles and methods of auditing and
their application.

Expected Objectives:
On completion of this course, candidates should be able to:

 Discuss relevant Statement of Auditing Standards of Auditing and apply their

principles to specific situations.
 review the audit to date, investigating inconsistencies, and make any necessary
changes to the work program; review events following interim audit and after year
end; and prepare the audit report and reports for management or other external
authority
 understand the reliability of evidence as affected by its sources and nature, discuss
tests on transactions and account balances (including sampling and analytical
procedures), including the nature, timing and extent of these tests
 describe the process of planning audits and internal reviews, plan work to meet the
objectives of the audit or review assignment taking into account audit risk, and draft
the contents of plans
 explain and evaluate accounting and internal control systems and indentify and
communicate control risks, potential consequences and recommendations.
 understand the nature purpose and scope of auditing and internal review;

understand the role of external audit and its regulatory framework and the role of internal
audit in providing assurance on risk management

UNIT- I (10 Hours)

 Auditing: Meaning, Objectives, Frauds, Errors, Accounting & Auditing, Types of Audit
 Internal control, Internal Check & Internal Audit, Evaluation of Internal control
system, Internal control system regarding purchases, sales, salaries and wages.

UNIT- II (14 Hours)

 Audit procedure: Planning & procedure of audits
 Audit Program, Audit working papers and evidences
 Routine checking & Test checking, vouching:
 Meaning, importance, vouching of cash and trading transactions.

UNIT- III (12 Hours)

 Verification & valuation of assets & Liabilities
 Auditor’s Report: Clean & qualified report
  Audit of limited companies
 Company Auditor: Appointment, Powers, duties & Liabilities

UNIT- IV (12 Hours)

 Investigation: Meaning, Objective, Procedure, various kind of Investigation
 Special points in the audit of banking companies, General Insurance Companies,
educational institutions & clubs

TEXT BOOK:
T1.Gupta, Kamal: Contemporary Auditing, Tata McGraw Hill, N. Delhi

REFERENCE BOOKS:
R1. Spicer & Pegler: Practical Auditing, W.W. Bigg., Indian Edition by S.V. Gratalia,
Allied publishers
R2. Tandon, B.N.: Principles of Auditing, S. Chand & Co., New Delhi
R3. Pagare, Dinkar: Principles of Auditing. S. Chand & Co., New Delhi
R4. Sharma, T.R.: Auditing Principles & Problems, Sahitya Bhawan, Agra
R5. . Jain, Khandelwal & Pareek: Auditing, Ramesh Book Depot, Jaipur

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