Auditing

Assignment
Submitted by
Bhavna pathak

Submitted to
Keerti mam
Q1. Difference
between cost audit
and finance audit
BASIS FOR
COST AUDIT FINANCIAL AUDIT
COMPARISON

Meaning Cost audit is an Financial audit is a

independent examination
of the correctness of the
cost statements and
accounts and its conformity
with the cost accounting
plan.
systematic unbiased
examination of a company
or institution's finance
books and records, so as to
express the opinion on it.

Audit Performed by a practicing Performed by a practicing

Cost Accountant. Chartered Accountant.

Appointment of Board of Directors Shareholders

auditor

Analyzes Cost records, cost Financial Statement, Books

statements and cost of Accounts, Documents,
accounts. Vouchers, etc.

Emphasis Analysis of the efficiency of Compliance with the

operations and propriety of accounting standards and
actions of the management. effectiveness of the internal
 BASIS FOR
COST AUDIT FINANCIAL AUDIT
COMPARISON

control system.

Compulsion Compulsory for all Compulsory for the

companies. companies engaged in the
manufacturing business.

Report To the Shareholders at the To the Board of Directors at

submission Annual General Meeting of the Board Meeting, which is
the company. then submitted to Central
Government.

Q2. Difference
between Tax audit and
Management audit
BASIS FOR STATUTORY
TAX AUDIT
COMPARISON AUDIT

Meaning Statutory Audit is Tax Audit is an audit made

the audit made compulsory by the Income
compulsory by Tax Act, if the
the law. turnover/gross receipts of
the assessee reaches the
specified limit.
 BASIS FOR STATUTORY
TAX AUDIT
COMPARISON AUDIT

Carried out by External Auditor Chartered Accountant

Audit of Full Accounting Matters related to tax.

records.

Purpose To ensure To ensure proper

reliability and maintenance of books of
transparency of accounts and they truly
financial reflect the taxable income
statement. of the assessee.

Q3. Difference
between Audit and
Investigation?
BASIS FOR
AUDITING INVESTIGATION
COMPARISON

Meaning The process of An inquiry conducted,

inspecting the books for establishing a
of accounts of an specific fact or truth is
entity and reporting known as Investigation.
on it, is known as
 BASIS FOR
AUDITING INVESTIGATION
COMPARISON

Auditing.

Nature General Examination Critical and in depth

examination.

Evidences The evidences are The evidences are

persuasive in nature. unquestionable,
therefore, its nature is
decisive.

Time Horizon Annually As per requirement

Performed by Chartered Accountant Experts

Reporting General Purpose Confidential

Obligatory Yes No

Appointment an auditor is The management or

appointed by the shareholders or one-
shareholders of the third party can appoint
company. investigator.

Scope Seeks to form an Seeks to answer the

opinion on financial questions, that are
statement. asked in the
engagement letter.
Q4. Write short note
on:
(a) Working Papers
(b) AuditingTechniqu
es
(c) Secret Reserve
Working papers: Audit working
papers are used to document the
information gathered during an
audit. They provide evidence that
sufficient information was
obtained by an auditor to support
his or her opinion regarding the
underlying financial statements.

Auditing techniques: An IT audit is

the examination and evaluation of
an organization's information
technology infrastructure, policies
and operations. ... IT auditors
examine not only physical security
controls, but also overall business
and financial controls that involve
information technology systems.
Secret reserve: A secret reserve is
the amount by which the assets of
an organization are understated or
its liabilities are overstated. An
entity might establish a secret
reserve for competitive reasons, to
hide from other businesses that it
is in a better financial position
than appears in its financial
statements