KHUSHBOO SHAH

S.Y.ACCOUNTS & FINANCE

ROLL NO.19

CONTENTS I. AUDITING II. AUDITING AS MANAGEMENT TOOL III.SCOPE & FUNCTION IV. FEATURE V. AUDIT EXECUTION VI. AUDIT REVIEW VII.PROVIDE TAX AUDIT REVENUE AUDIT INTERNAL AUDIT STOCK AUDIT INFORMATION SYSTEM AUDIT MANAGEMENT AUDIT CONCLUTION

AUDITING

An examination and verification of a company's financial and accounting records and supporting documents by a professional

AUDITING AS MANAGEMENT TOOL

The concept of Internal Audit has drastically changed from a system of mere checking the arithmetical accuracy of accounting data as in former days to a system of appraisal of the effectiveness of accounting, financial and other operations and controls as an aid to Management to achieve its goals of maximizing production

By constant review and appraisal of the workings of the systems and procedures introduced, Internal Audit enables Management to control and utilise widespread resources properly. It acts as eyes and ears of Management in implementing its plans and decisions since most Management decisions have financial implications on the Company's

It is meant to be an effective means for the rapid and simultaneous observation of multiple events and transient situations which, properly assembled, can give a reliable guide to the well-being of an organization, an advance warning of undesirable trends and an indication of corrective action.

The main purpose of having an Internal Audit System in an organization is to verify and review the activities of all cost centers so as to assist them in seeing that the assets of the business are properly protected and accounted for, that current transactions are promptly and completely recorded, that faulty, inefficient or fradulant operations are revealed and that the business is adequately protected against waste, fraud and loss.

The purpose of this form of control is to assure early detection and rectification of errors to minimize their recurrence in future, to achieve economy in expenditure and allround efficiency. It ensures that various rules and procedures laid down by the Management are actually followed and acted upon by all the cost centers.

With growing complexities and interrelation of activities between various agencies, modern industries allover the world have realized the pressing need to have Internal Audit to help the Management at all levels in controlling the activities in the right

The function of Internal Audit in reviewing, appraising and reporting on established administrative policies, plans and procedures of the Company as an aid / assistance does not, however, in any way relieve the department / unit/ tea estate / person concerned of responsibilities assigned to it / him.

SCOPE & FUNCTIONS

The scope of Audit is very wide and cannot be laid down precisely. However, broadly Internal Audit is concerned with any phase of business activity which can be the basis of service to Management.

Audit can focus the factors responsible for loss, failure or inefficiency so that they are rectified immediately, if possible, or measures can be taken to avoid their recurrence in future.

The main duties and functions of Audit, inter alia, are broadly classified as under : i) Systems Audit ii) Operational Audit including Efficiency Audit iii) Management Audit

Since Audit is a Management tool, its object is to assist the Management at various levels by providing it in time with objective analysis, appraisals, pertinent comments and recommendations in respect of the Company's affairs to enable the Management to take timely remedial action.

Simplification of procedures, setting up of effective and efficient co-ordination between departments, gearing up of internal controls, cost reduction by minimization of wastages in various operations, revenue augmentation by proper inventory controls and maximum utilization of machines, materials and manpower are same of the areas where Internal Audit can assist Management.

Features
Metric Stream Audit Management module allows creating an audit program with a well-defined objective and scope tied to quality, compliance and risk management processes. Auditors can organize an audit in a logical structure and hierarchy with detailed audit templates and work orders. Evaluation and pass/fail criteria, checklists, and tasks that need to be performed for executing the audit can also be defined.

The audit system enables auditors to record qualitative or quantitative findings along with detailed observations and recommendations in predefined formats alongside the checklist of evaluation criteria and questions. A unique offline capability allows auditors to enter audit findings in notebook computers or handheld devices at remote field sites without access to the corporate network and synchronize the data with the central repository when they can access the network.

Audit Execution:

Tax Audits
Tax audits are usually understood to refer to an investigation into the background of tax returns submitted by an individual or business to a tax agency. The idea of a tax audit normally conjures up feelings of anxiety even in persons who believe their tax documents are perfectly in order. While it is true that a tax audit may be called due to some perceived irregularity in one or more returns, it is also true that an audit may be done simply as part of a random sampling.

Revenue Audits

A Revenue audit is a crosscheck of the information and figures shown by you in your tax returns against those shown in your business records.

Revenue audit covers the following types of tax returns:

Income Tax, Corporation Tax or Capital Gains Tax returns and/or The returns submitted in respect of VAT, PAYE/PRSI or Relevant Contracts Tax (RCT).

Internal Audits
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

Stock Audits
a Stock Audit is a term which is generally used in manufacturing industries where in raw material purchased is converted in to finished goods. It is important from the perspective of having vigil over the quantity and quality of raw materials remaining in stores as more than 70% of product cost involves material cost. So, to monitor the purchase, store and issue of materials a stock audit is done.

Information System Audit

An information technology audit, or information systems audit, is an examination of the management controls within an Information technology (IT) infrastructure. The evaluation of obtained evidence determines if the information systems are safeguarding assets, maintaining data integrity, and operating effectively to achieve the organization's goals or objectives. These reviews may be performed in conjunction with a financial statement audit, internal audit, or other form of attestation engagement.

Management Audit
Audit management is responsible for ensuring that board-approved audit directives are implemented. Audit management oversees the internal/external audit staff, establishes audit programs, and hires and trains the appropriate audit personnel. The staff should have the necessary skills and expertise to identify inherent risks of the business and assess the overall effectiveness of controls in place relating to the company's internal controls.

Auditing is a management tool used to verify that systems and processes are compliant/conformant, effective, and continually improved. The process audit determines if process requirements (methods, procedures) are being met, while a system audit determines if system requirements (manual, policy, standards, regulations) are being met. This bestselling handbook is now revised and fully updated, organized to correspond exactly with the ASQ Certified Quality Auditor (CQA) Body of Knowledge (BooK).

It provides comprehensive coverage for nearly every aspect of the audit function. Though a valuable resource for studying for the CQA examination, it is also meant to be the single source for quality, environmental, safety and health auditors, audit managers, audit teams, and other professionals in the field.

The auditing handbook is designed to provide practical guidance for system and process auditors. Practitioners in the field have provided content, example audit situations, stories, and review comments as the handbook evolved. New to this third edition are topics such as auditor competency, business applications, and improvement tools. Additionally, existing topics have been expanded to encompass process methods, process based management systems, and ISO 19011 guidance.

conclusion
The handbook has been refocused to promote the common elements of all types of system and process audits (quality, environmental, safety, and health), and covers the latest auditing terminology and communication technology. The appendixes include example forms and an example guide for when technical specialists (subject matter experts) are needed on the audit team.