Indian Audit and Accounts Department
Courseware on: Financial Audit of Autonomous Bodies
Session: 3
Introduction to Accounting Standards and Accounting Standard 1 and Accounting Standard 4
Session Title: 3
Introduction to Accounting Standards and AS 1 and AS 4
Instructor's Guide:
1.
SESSION OVERVIEW
Show: slide 1
Tell: In the previous sessions we had a look at the legal mandate for audit
Session Guide
Reference:
Participant Response
Slide 1
Slide 1
of autonomous bodies and authorities and ‘objective and scope of
audit’ of such institutions. We are also aware that objective of audit
of an autonomous institution is to examine the utilization of financial
assistance provided to that institution by the Government as per
sanction and to ensure that the financial statements prepared by the
institution present a true and fair view of the accounts.
Show: slide 2
Show: slide 3
Tell: During this session, we will learn:



2.
Slide 2
Slide 3
Slide 3
the importance of the accounting standards in preparation of
financial statements; and
application of AS 1 relating to ‘Disclosure of Accounting
Policies’, and
application of AS 4 relating to ‘Events Occurring After the
Balance Sheet Date’ for preparation of financial statements.
LEARNING OBJECTIVES
Show: Learning Objective slide 4
Tell: At the end of the session, the learner will be able to state the
Slide 4
Slide 4
importance of Accounting Standards in the preparation of financial
statements and application of AS 1 relating to ‘Disclosure of
Accounting Policies’ and AS 4 relating to ‘Events Occurring After
the Balance Sheet Date’ in the preparation of Financial Statements.
Instructors Guide 3
Courseware prepared and designed by: Regional Training Institute, Jammu
1
Indian Audit and Accounts Department
Courseware on: Financial Audit of Autonomous Bodies
Session: 3
Introduction to Accounting Standards and Accounting Standard 1 and Accounting Standard 4
Session Title: 3
Introduction to Accounting Standards and AS 1 and AS 4
Instructor's Guide:
Session Guide
Reference:
The response may vary from ‘objective is
clear’ or the objective is not clear
Ask: Is the learning objective clear. If there is any doubt, discuss the objective
again till the concept is clear.
3.
Ask: What is your understanding of Accounting Standards and how are they
important in the preparation of financial statements?
Take responses, recognize them by writing on the while board.
Paraphrase: responses, and repeat with modifications, if necessary.
Show: Slide 5 on importance of accounting standards
Explain: the importance of Accounting Standards giving suitable examples.
Explain: the concept of ‘Generally accepted Accounting Standards’
setting up of Accounting Standards Board by the Institute of Chartered
Accountants of India and the ‘Accounting Standards’.
Show: slide 6]
Explain: the scope and functions of the Accounting Standards Board.
Show: slide 7
Tell: that the Institute of Chartered Accountants of India has so far issued
29 Accounting Standards
Show: slides 8 to 12
Explain: different accounting standards, including a brief on their
applications
Tell: we will be discussing main Accounting Standards as applicable in
the preparation of financial statements of autonomous bodies and
that during this session we will discuss AS 1 and AS4
2.
Show: slide 13
Tell: Do you know anything about the significant accounting policies the need
for certification audit?
Check: for responses.
Instructors Guide 3
Courseware prepared and designed by: Regional Training Institute, Jammu
Participant Response

The response may be varied.
Slide 5
Slide 5
Slide 6
Slide 6
Slide 7
Slides 8 to 12
Slide 8 to 12
Slide 13
Responses may be varied
2
Indian Audit and Accounts Department
Courseware on: Financial Audit of Autonomous Bodies
Session: 3
Introduction to Accounting Standards and Accounting Standard 1 and Accounting Standard 4
Session Title: 3
Introduction to Accounting Standards and AS 1 and AS 4
Instructor's Guide:
Recognize and rephrase: Responses by writing on the white board, after
rephrasing and correcting the responses if required.
Show: Slide 14
Explain: the difference between the ‘Fundamental Accounting assumptions’ and
‘Accounting Policies, with suitable examples.
Show: slide 15
Explain: the concepts of ‘Going Concern’, Consistency’ and ‘Accrual Basis of
Accounting’.
Show: slide 16,17,18
Explain: he areas in which different accounting policies are encountered while
preparing or presenting financial statements.
Show: slide 19
Explain: the considerations in selection of accounting policies by autonomous
bodies/commercial concerns.
Show: slide 20,21,22
Session Guide
Reference:
Participant Response
Slide 14
Slide 15
Slides 16, 17,
18
Slide 19
Slides 20, 21,
22
Explain: the accounting Standard 1 with suitable examples.
EXPERIENCE:
Distribute Exercise 3.1: ask the participants to solve the exercise individually,
then in sub-groups. A reporter from the sub-group will inform the entire
learning community about their reply. This exercise is to be completed in
15 minutes.
Call: Group reporters to share their group’s answers. Record on white board.
Look for answers similar to the seven assertions listed in the slide
Rephrase: If required the response of each sub-group.
Distribute: Suggested solution to exercise 2.3.
Instructors Guide 3
Courseware prepared and designed by: Regional Training Institute, Jammu
Exercise 3.1
Suggested
solution to
3
Indian Audit and Accounts Department
Courseware on: Financial Audit of Autonomous Bodies
Session: 3
Introduction to Accounting Standards and Accounting Standard 1 and Accounting Standard 4
Session Title: 3
Introduction to Accounting Standards and AS 1 and AS 4
Instructor's Guide:
Session Guide
Reference:
Participant Response
exercise 3.1
Reflection: ask the learners to read the suggested solution and reflect on it.
Ask: Is the application of Accounting Standard 1 clear. If there is any doubt,
discuss the doubts to clarify them.
Test: the learning by suitable questions asked at random.
4.
Show: slide 23
Tell: we will now discuss Accounting Standard 4
Show: slide 24
Explain: that this standard deals with treatment in financial statements of:
Contingencies, and Events occurring after the balance sheet date.
Slide 23
Show: slide 25
Tell: that this standard does not apply to (a) Liabilities of life assurance and
Slide 25
Slide 24
general insurance enterprises arising from policies issued; (b) Obligations
under retirement benefit plans; and c Commitments arising from longterm lease contracts.
Show: slide 26
Explain: the terms ‘contingencies’ and ‘events occurring after balance
sheet date’.
Show slides 27 to 32
Explain: the text of the Accounting Standard 4 with suitable examples
Ask: are the concepts of the accounting Standard 4 and its application clear. If
there is any doubt, discuss the doubts and clear them.
Slide 26
Slides 27 to
32
Experience:
Distribute: exercise 3.2
Ask: the learners to read the exercise carefully solve it first individually, then in
their sub-group. Ask them to arrive at a consensus solution in their subgroup. Ask the learners to complete the exercise in 15 minutes.
Call: Group reporters to share their group’s answers. Record on white board.
Instructors Guide 3
Courseware prepared and designed by: Regional Training Institute, Jammu
Exercise 3.2
4
Indian Audit and Accounts Department
Courseware on: Financial Audit of Autonomous Bodies
Session: 3
Introduction to Accounting Standards and Accounting Standard 1 and Accounting Standard 4
Session Title: 3
Introduction to Accounting Standards and AS 1 and AS 4
Instructor's Guide:
Look for correct answers, rephrasing them, if necessary, so that the
concept is clear to the learners.
Rephrase: If required the response of each sub-group.
Distribute: Suggested solution to exercise 3.2.
Session Guide
Reference:
Participant Response
Suggested
solution to
exercise 3.2
Ask the learners to read the suggested solution and reflect on it.
Reflection: Give the learning community 5 minutes to read the suggested
solution and compare with their individual answers.
Ask: Is the application of Accounting Standard 4 clear. If there is any doubt,
discuss the doubts to clarify them.
Close: the session by giving a brief summary of what was discussed.
Test: the learning by suitable questions asked at random.
.
Instructors Guide 3
Courseware prepared and designed by: Regional Training Institute, Jammu
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