Effects on auditing financial statements Standard on Auditing are required to be complied in full even in the present time of pressure under changed timelines. Auditors should carefully assess the situation and prepare appropriate responses to the challenges that Coronavirus causes for companies and their reporting. Impact of coronavirus on risk assessment of a company…
Audit services
Information Technology Audit
IT audit deals with review and evaluation of information processing systems, related- non automated process and an interface between them. It involves gathering information and planning and secondly, understanding of existing internal controls. As in today’s era organizations are moving towards risk-based audit approach, an auditor has to assess risks through an audit plan and…
Points to consider before accepting the Audit
Before accepting a new client, a chartered accountant firm in practice shall determine whether the acceptance would create any threats to compliance with the fundamental principles. This means that when accepting to take on a new client, the proper investigation should be donein this regarding also its owners and business activities toensure the integrity of…
External Confirmations
As per Standard of Auditing 505 issued by ICAI,“External Confirmations” are defined asthe audit evidence obtained as a direct written response to the auditor from a third party in paper form or by electronic or other medium. External Confirmation can be an effective audit tool for audit of books of accounts and detecting fraud. In…
REVENUE PROCESS AUDIT
The sales and collections cycle in a business refers to the set of processes that begin when a customer purchases goods or services and ends when business receives payment in full. As part of the year-end audit of your financial statements, external accountants test sales transactions and the internal controls over those transactions to ensure…
Inventory Process Audit
Receipt of Material & Quality Checks Review of the gate entry for the incoming material in the inward gate register. Ensure that the weighment / Counting of the incoming material is made properly and correctly at the receiving section. Verify that stamp / acknowledgement of the receipt of the incoming material. The remark should indicate…
How Auditors Can Test Inventory in the Coronavirus Times
As per SA 501 “Audit Evidence – Specific Consideration for Selected Items”auditor is required to conduct Physical Inventory at least once a year. Due to coronavirus pandemic auditors could not attend Physical Inventory at the year end thus posing a threat to integrity of Financial Statements and audit credibility. Conducting Physical Verification There are two…
COVID-19 Impact on Financial Statements
The impacts of the outbreak on financial statements will depend on facts and circumstances, including the degree to which a business operation is exposed, and the sensitivity of amounts recorded in the financial statements to the volatility of economic conditions. This article looks at some of the aspects that needs to be considered by the companies…
Materiality
Due to practical limitations, any auditor cannot carry out the examination of all the transactions and balances, so materiality ensures covering the transactions significant enough to influence the decisions of the users of the financial statements. Also, materiality is an essential concept since, materiality and audit risk are directly related i.e., higher the level of…
Impairment of Assets
In this dynamic business environment, the real market value of the assets that a business presents in its financial statements does not stay intact. The market value of the assets might be different as compared to their carrying amount. If there are some indications about the permanent downside in the market value of the assets…