Auditing And Assurance Services

Auditing  is,  perhaps,  one  of  the  most  practical-oriented  subjects  in  the  C.A.  curriculum.    The  inclusion  of  this  subject  at  the  Professional  Competence  Course  (PCC)  Level,  aims  to  provide  working knowledge of generally accepted auditing procedures and of techniques and skills needed to apply them in audit and attestation engagements.  A good knowledge of the subject would provide a  strong  foundation  to  students  while  pursuing  the  chartered  accountancy  course.    A  good  understanding  of  the  theoretical  concepts,  particularly,  in  the  context  of  auditing  standards  would  make  practical  training  an  enriching  and  enjoying  experience.    While  studying  this  paper,  students  are  advised  to  integrate  the  knowledge  acquired  in  other  subjects,  specifically,  accounting  and  corporate  laws  in  a  meaningful  manner.    Such  a  learning  would  only  help  a  student  to  become  a  better professional.  In nutshell, it is a subject which involves application of theoretical knowledge of other  subjects  included  in  the  course  curriculum.    It  is  this  practical  aspect  of  the  subject  which  allows  the  individual  students  to  exhibit  their  intelligence  and  ability  upon  which  the  scoring  of  the  marks  depends.    A  systematic  study  of  the  subject  will  not  only  help  in  securing  good  marks  and  passing  the  examination  but  also  enable  one  to  become  a  good  chartered  accountant.    A  list  of  steps to be followed is given below: Familiarise yourself with the syllabus: You must know the exact scope of the syllabus.  Divide the entire syllabus into broad topics.  At the PCC level, the broad topics are – Nature and Objectives of Auditing.  Audit Planning, Internal Control, Vouching, Verification of assets and liabilities, Company Audit, Special Audits, etc.  Such a division of syllabus would always provide a bench-mark to assess the extent of preparation and, thus, infuse confidence. Read  each  topic  thoroughly:  One  may  read  each  topic  thoroughly,  understand  and  grasp  the  same.    This  is  not  a  subject  where  the  student  can  exploit  his  intellect  and  commonsense  without  having the requisite knowledge of the subject.  A thorough preparation is pre-requisite for success in this subject.  If necessary, supplement the same with a standard text book.  While reading through each  topic,  take  special  note  of  Auditing  and  Assurance  Standards  (AASs),  Accounting  Standards  (AS),  relevant  case  laws,  provisions  of  the  Companies  Act,  1956  or  other  special  legislations,  etc.    As stated earlier, auditing should not be studied in isolation since it is related to other subjects.  In particular,  the  knowledge  of  Accounting  Standards;  laws  affecting  business  organisation,  such  a  Partnership  Act,  1932,  Companies  Act,  1956,  etc.  is  pre-requisite  for  understanding  of  the  subject  and  to  write  a  good  answer.    One  must  read  the  monthly  publications  of  the  Institute,  viz.,  The  Chartered  Accountant  and  the  Students’  Newsletter  regularly  to  keep  abreast  of  the  latest  developments in the field. Prepare Notes: You will appreciate that normally mere reading a page from the book does not lead you  anywhere.    It  is  very  essential  to  comprehend  the  subject.    Therefore,  effective  reading  is  essential to absorb the same.  After reading each chapter, prepare comprehensive notes since the actual  writing  down  of  the  matter  helps  not  only  in  understanding  but  facilitates  quick  revision  as   well.  You may make use of mnemonic while preparing notes.  For example, assertions in respect of an  item  appearing  in  the  balance  sheet  to  be  verified  may  be  remembered  as  VCREP  in  the  mnemonic   form   wherein   V   stands   for   Valuation,   C   stands   for   completeness,   R   stands   for   Rights/obligation, E stands for existence and P stands for presentation and disclosure requirements. Check  Your  Progress:  Perhaps,  the  best  way  to  check  your  progress  is  to  go  through  question  papers of previous examinations.  An element of introspection is necessary at this stage. In case a student feels that he is not able to answer the requisite number of questions, he must ask himself and ascertain reasons for the same.  You must write answers under mock examination conditions to assess  your  writing  capability  and  compare  the  same  with  suggested  answers  provided  by  the  Board  of  Studies.    Having  regard  to  the  extent  of  changes,  students  may  note  that  suggested  answers  to  the  questions  set  at  the  previous  Intermediate  Examinations  would  still  be  beneficial  from  the  academic  preparation  view  point.    A  word  of  caution.    While  going  through  “Suggested  Answers” for previous examinations, no attempt should be made to memorise the answers as such. Rather  a  student  may  read  them  thoroughly  to  gain  knowledge  and  improve  understanding  and  specifically as to how an answer should be written in the examin