Syllabus (COMMERCE)

Course Type: MAJ-10

Semester: 6

Course Code: BCOMMAJ10T

Course Title: Auditing

(L-P-Tu): 5-0-1

Credit: 6

Practical/Theory: Theory

Course Objective: The course aims to help the students: 1. To provide an independent opinion on whether a company’s financial statements are free from material misstatement, accurately representing its financial position. 2. To help maintain the accuracy and reliability of financial information to protect the public interest. 3. To detect and prevent any form of fraud and any other illegal activity, acts of mismanagement, or other irregularities within the company. 4. To ensure the adherence of company management and shareholders to the established accounting principles and reporting standards. 5. To serve as a control mechanism to verify the accuracy of the financial information given to shareholders and other stakeholders.

Learning Outcome: The outcome of auditing studies can typically include the determination of the accuracy or validity of financial statements, identifying weak controls or deficiencies in internal processes, and discovering fraud or misappropriation of funds. Additionally, the outcomes of an audit can lead to improved processes or systems for managing and controlling an organisation's finances.

Subject: Auditing

Unit 1: Introduction (Lectures: 10)

Auditing-Introduction, Meaning, Objectives, Basic Principles and Techniques; Classification of Audit, Audit Planning, Internal Control – Internal Check and Internal Audit; Audit Procedure- Vouching and Verification of Assets & Liabilities.

Unit 2: Company Audit-I (Lectures: 15)

Audit of Limited Companies: Company Auditor- Qualifications and Disqualifications, Appointment, Rotation, Removal, Remuneration, Rights and Duties, Auditor’s Report- Contents and Types. Liabilities of Statutory Auditors under the Companies Act 2013.

Unit 3: Company Audit-II (Lectures: 15)

Depreciation-Causes, methods, necessity to charge depreciation, the difference from amortization, declaration of dividend without charging current and arrear depreciation (Ref. Companies Act, 2013)- the inadequacy of profit and depreciation, consequences of change in method of depreciation.

Reserves-types of reserves, funds and provision, sinking fund, secret reserve-creation, duties of auditor, capitalization of reserve.

Unit 4: Company Audit-III (Lectures: 15)

Dividend-Difference from divisible profit, types of dividend, sources, provisions of Companies Act regarding declaration of dividend-factors considerable for declaration of dividend-procedure for payment-auditors duty in cases of declaration of dividend out of abnormal profit or capital profit or revaluation profit or pre-acquisition profit or in absence of current profit; Is the declaration of dividend compulsory; payment of interest out of capital (Sec-208)

Unit 5: Special Areas of Audit (Lectures:10 )

Special Areas of Audit: Special features of Cost audit, Tax audit, and Management audit; Propriety Audit.

Unit 6: Recent Trends in Auditing: (Lectures: 10)

Basic considerations of audit in EDP Environment; Computer-aided audit techniques and tools; Auditing Standards; Relevant Case Studies/Problems.

Reading References:

Basu, Auditing and Assurance, Pearson Education.

Ghatalia, S.V., Practical Auditing, Allied Publishers, New Delhi.

Gomez, Auditing and Assurance: Theory and Practice , PHI Learning.

Gupta, Kamal, Practical Auditing, McGraw Hill Education.

Jha, Aruna , Auditing, Taxmann Publication.

Kumar, Ravinder & Sharma, Virender, Auditing: Principles and Practice, PHI Learning.

Kumar & Sharma, Auditing: Principles and Practice, PHI Learning.

Pagare, Dinakar, Practice of Auditing, Sultan Chand & Sons.

Reddy, P.N. & Appannaiah, Auditing, Himalaya Publishing House.

Saxena, R.G., Principles and Practice of Auditing, Himalaya Publishing House.

Singh, A.K. & Gupta Lovleen, Auditing Theory and Practice. Galgotia Publishing Company.

Tandon, B.N., Practical Auditing, Sultan Chand and Sons.