This very subject always draw full importance from institute at both levels ( Inter (IPC), Final) full 100 marks subject is not only theory, But it is a mix of practicing various theories and practical concepts. Auditing practices is utmost important for every student, to apply all relevant theoretical and practical skills to validate the work perform by others and thereon expressing opinion for use of laymen. That is, various users are dependent for their decision making on an auditor; this requires a special attention for a professional to be more skillful. Audit enhances student’s scope by teaching various Auditing Standards for better decision making at crucial and important aspects for professional diligence, Audit planning and risk identification for best possible and accurate opinions which help various users of opinion in decision making. Audit also covers Information System for better understanding of use of computers in audit, special considerations has been given to company law sections regarding auditor and audit report by the institute to train students at Inter (IPC) level.



(One paper – three hours – 100 marks)


To understand objective and concepts of auditing and gain working knowledge of generally accepted auditing procedures and of techniques and skills needed to apply them in audit and attestation engagements and solving simple case-studies.


  1. Auditing Concepts – Nature and limitations of Auditing, Basic Principles governing an audit, Ethical principles and concept of Auditor’s Independence, Relationship of auditing with other disciplines.
  2. Auditing and Assurance Standards – Overview, Standard-setting process, Role of International Auditing and Assurance Standards Board and Auditing and Assurance Standards Board in India.
  3. Auditing engagement – Audit planning, Audit programme, Control of quality of audit work–Delegation and supervision of audit work.
  4. Documentation – Audit working papers, Audit files: Permanent and current audit files, Ownership and custody of working papers.
  5. Audit evidence – Audit procedures for obtaining evidence, Sources of evidence, Reliability of audit evidence, Methods of obtaining audit evidence, Physical verification, Documentation, Direct confirmation, Re-computation, Analytical review techniques, Representation by management.
  6. Internal Control – Elements of internal control, Review and documentation, Evaluation of internal control system, Internal control questionnaire, Internal control check list, Tests of control, Application of concept of materiality and audit risk, Concept of internal audit.
  7. Internal Control and Computerized Environment, Approaches to Auditing in Computerised Environment.
  8. Audit Sampling.
  9. Analytical review procedures.
  10. Audit of payments.
  11. Audit of receipts – General considerations, Cash sales, Receipts from debtors, Other Receipts.
  12. Audit of Purchases – Vouching cash and credit purchases, Forward purchases, Purchase returns, Allowance received from suppliers.
  13. Audit of Sales – Vouching of cash and credit sales, Goods on consignment, Sale on approval basis, Sale under hire-purchase agreement, Returnable containers, Various types of allowances given to customers, Sale returns.
  14. Audit of suppliers’ ledger and the debtors’ ledger – Self-balancing and the sectional balancing system, Total or control accounts, Confirmatory statements from credit customers and suppliers, Provision for bad and doubtful debts, Writing off of bad debts.
  15. Audit of impersonal ledger – Capital expenditure, deferred revenue expenditure and revenue expenditure, Outstanding expenses and income, Repairs and renewals, Distinction between reserves and provisions, Implications of change in the basis of accounting.
  16. Audit of assets and liabilities.
  17. Company Audit – Audit of Shares, Qualifications and Disqualifications of Auditors, Appointment of auditors, Removal of auditors, Powers and duties of auditors, Branch audit, Joint audit, Special audit, Reporting requirements under the Companies Act, 1956.
  18. Audit Report – Qualifications, Disclaimers, Adverse opinion, Disclosures, Reports and certificates.
  19. Special points in audit of different types of undertakings, i.e., Educational institutions, Hotels, Clubs,Hospitals, Hire-purchase and leasing companies.
  20. Features and basic principles of government audit, Local bodies and not-for-profit organizations, Comptroller and Auditor General and its constitutional role.