The word 'Audit' is a derivative of the word 'Audition' which means 'to hear'. In earlier times, the Kings used to hear their accountants narrate the accounts verbally. However, as the complexity of the accounting function grew, need was felt to thoroughly check the accounts for mistakes misclassification and document the findings in a written form so that it can be used by the Management, stakeholders, investors, Government and various other bodies. This process is known as Auditing or Audit.
It is a compulsory audit done by a CA.
Finance Audit conduct by the CA to compliance the legal requirements of monitory issues.
Vouching is the process of checking the authentication of the voucher maintain by the management with the respective supporting document.
► Make sure the authority of the audit team is established - this will increase the cooperation from auditees.
► Decide what areas of the company will be audited and the frequency of the audits. Prepare a yearly audit schedule and distribute.
► Develop an audit plan. Decide what other audit resources are needed - checklists, other auditors?
► Determine the purpose of the audit - is it to comply with government regulations, quality standards, internal procedures and systems? v Define the scope of the audit - is it an overview of the area being audited or is it to concentrate on a specific system within the area?
► Hold a meeting with the auditors to discuss the plan, purpose, and scope of the audit.
► Read the documents you will be auditing against. Know what they say. Develop questions to ask the auditees.
► Conduct an opening meeting with the auditees.
► Be professional at all times. Avoid being judgmental.
► Follow safety procedures, clean room procedures, and all other required procedures.
► Explain the purpose of the audit to the auditees.
► Answer questions or discuss compliance problems brought to your attention by auditees.
► Be flexible - if you find a potential problem not within the scope of the audit - evaluate the potential risks of the problem if left unaddressed.
► Encourage honesty with the auditees.
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