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Procedure relating to Audit of Annual Accounts

• Supplementary Audit under section 619(3) of the Companies Act 1956 should be conducted according to provisions of documents given in subsequent slides.

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Procedure relating to Audit of Annual Accounts

• Provisions of the Companies Act, 1956 (on the relevant statues governing the Corporation concerned.

• Memorandum & Articles of Association of the Company.

• Instructions of the Government of India.

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Procedure relating to Audit of Annual Accounts

• ICAI’s following pronouncements :

• .i Accounting Standards

• ii Guidance Notes & Opinions.

• Iii. Statements on Standard Auditing Practices (SAPs)

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Procedure relating to Audit of Annual Accounts

• IA&AD’s Auditing Standards.

• INTOSA guidelines

• International Accounting Standards wherever ICAI’s standards/guidelines are not available.

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Scrutiny of Auditor’s Report

• Statement included in the Auditor’s Report in compliance of the Manufacturing and Other Companies (Auditor;s Report 1988) is a constituent part of the Auditor’s Report and it should be scrutinized thoroughly

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Meeting with Statutory Auditors

• Regular meeting with Statutory Auditor and management is very important. Areas of weaknesses may be enquired as identified by the pre-audit analysis.

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Review of Accounting Policies

• Auditor should critical examined the policies adopted by the companies and test them for conformity with recommendations of the ICAI’s Statement of Auditing practices

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Directions to Statutory Auditors

• Directions issued to the Statutory Auditors under section 619(3) of the Companies Act 1956 help us to ensure not only that the basic aspects in the accounts of the Auditee unit get covered by the Statutory Auditors, but also that some aspects get covered which otherwise may not be get covered in the test check during our supplementary audit

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Quantum of Checks

• Quantum of Checks will depend on:

• 1. Soundness of the Internal Control

• 2. Out past experience and familiarity with auditee unit.

• 3. Relative importance of audit risk

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Revision of Accounts

• In order that the reader of accounts may be gauge the extent of inaccuracy in the pre-revised accounts, accounts may be revised and impact of CAG’s observations should be disclosed in the notes on the accounts by the Company or Auditor, else a comment should be made to bring out the full impact.

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Timely finalisation of Audit

• Time schedule for finalisation of Accounts may be fixed in such a way that auditee completed in prescribed time limit.

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Performance of the Statutory Auditors

• Performance Report of Statutory Auditors should be prepared and sent to Headquarters in the prescribed proforma within the prescribed time limit.