WELCOME TO A TALK
ON…
AUDITING
STANDARDS
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INTRODUCTION
Audit Mandate CAG’s (DPC) Act, 1971 prescribes
functions, duties and powers of SAI
Audit Mandate includes Audit of
Receipt and Expenditure from
Consolidated Fund
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Introduction (contd.)
Contingency Fund and Public Accounts
Trading, Manufacturing, Profit and
Loss Account and Balance Sheet
Accounts of Stores and Stock
Government Companies
Statutory Corporations
Authorities and Bodies substantially
financed
Grants and Loans for specific purposes
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Audit Objectives
To safeguard financial interests of the
Government
Uphold and promote public accountability
Sound and economical financial practices
Audit assists Parliament/Legislatures in
exercising financial control through
PACs/COPUs
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Audit objectives (contd.)
Executive Governments and not Audit
is responsible for enforcing economy
and efficiency in expenditure
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Scope of Audit
Term includes financial as well as
performance audit
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Basic Postulates
Audit must exercise its best
judgement in determining audit procedure
basis of forming opinion
contents of his report
due professional care
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Basic Postulates (contd.)
test audit and hence auditor is not
responsible
independent attitude
Audit independent
Auditor’s right to inspect any record,
documents, call for information,
clarification
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Auditing standards can be
broadly grouped under
1 General Standards
2 Operational Standards
3 Reporting Standards
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1
GENERAL STANDARDS
A
Professional
B
Manuals and Instructions
C
Quality Assurance
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General Standards -Professional
Qualification
Training
Auditor should develop proper
insight
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General Standards
Manuals and instructions
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General Standards
Quality Assurance
Appropriate internal control system to
ensure quality of work
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2. OPERATIONAL AUDIT
STANDARDS
Audit Planning
Financial Statement Audit
Regularity and Legal Audit
Performance Audit
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Operational Standards Audit Planning
Audit should be properly guided
directed and
supervised
sufficient understanding of the
internal control system of the auditee
organisation
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Operational Standards Financial Statements Audit
Financial Statements are accurate and
complete
True and fair view
prepared based on generally accepted
accounting principles(GAAPs)
sufficient disclosure
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Operational Standards Performance Audit
Achievement of physical and financial
goals and targets
social and economic objects
utilisation of resources as per
projected outlay
cases of overpayment, losses,
avoidable, excess or infructuous
expenditure due to improper planning
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Operational Standards Performance Audit(contd..)
Delays in completion
overstaffing
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2
OPERATIONAL AUDIT
STANDARDS(contd)
Audit of Receipts
Audit of Government Companies
Auditing in EDP Environment
Audit Evidence
(i) Sufficiency
(ii)Relevance
(iii)Competence
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Reporting Standards
 Field Audit Report  Observations and conclusions
in an appropriate form
 Contents should be easy to
understand
 Report should be complete
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Reporting Standards (contd.)
Accurate
Convincing
Clarity
Concise
Follow up of Audit Reports
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Reporting Standards (contd.)
Report should be free from vagueness
or ambiguity
relevant information
supported by audit evidence
timeliness
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Reporting Standards (contd.)
Follow up of Audit reports
Adequate
Prompt
Proper
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