Auditing in India – A basic overview

Account Auditing in India is known as an examination of financial statements i.e. balance sheet and profit & loss a/c, books of account and related vouchers so as to help the auditor to form an option as to whether the financial statements show true and fair view of the business affairs or not, and if not, then in what respect it is not showing the true picture of the business activities.

Auditing is done by the auditor to find out whether the financial statements are prepared by business concerns to know the result of the business activity undertaken by them throughout the year. At the end of the business activity undertaken by them whole exercise of accounting. When financial statements are financial statements show true and fair view of the state of affairs of the business.

Meaning of true and fair view –The financial statements would show true and fair view regarding the business activities when all the following features are present:
All the transactions in the cource of business are recorded in the books of account and accurately.

1. Transactions are recorded according of the accepted accounting principles.
2. The financial statements are drawn in conformity with the books of account.
3. Financial statements are prepared as per accepted rules and regulation of the companies act, 1956 and other legal provisions.
4. When there are no errors and frauds presents in the books of accounts.

The financial statements will be said to present the true and fair view, when both the aspects of:

1. Recording and
2. Presentation of the business transactions are satisfied.

When auditor is not statisfied fully due to any particular discrepancy, he will have to ascertain the depth of mistake in the books of account. If the mistake is major and id affects the total view of the financial statements, then auditor will issue a negative report (for example “the books of account do not show the true and fair view”). If discrepancy (mistake) is not major but affects only a particular aspect of the business, then the auditor will issue a qualified report.(for examples “debtors are not properly calculated however,otherwise,the books of account show true and fair view of business”)

Author: TeamKpoweb

7 Responses to “Auditing in India – A basic overview”

  1. please tell me about the Auditing Act and Rules in India.

  2. Shuccashy says:

    Hi

    As a fresh http://www.blog.kpoweb.com user i only wanted to say hi to everyone else who uses this bbs ;-)

  3. harish says:

    Pl send me details of audit technique

  4. sridhar says:

    this good subject

  5. what are the limitations of auditing

  6. Mayur chudasama says:

    Can you tell me the following contents of the government Accounting in India:
    > General principles
    > Indian Audit and Account Department
    > Controller and Auditor general and public Accounts Committee
    > Financial Administration

  7. Shruthi says:

    Plz tell me who is the famous auditor of India is d.murali is correct answer

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