Tiêu đề Chapter 1 QB V1.pdf ✅

the financial position of the company and is under the impression that since he is out of India, therefore the firm might not run well. He approaches an Internal Auditor about what would be covered in the Audit. Advice regarding elements to be included in the Scope of Audit. [MTP - March 19] Ans: Scope of Audit: Refer to Answer of Q. No.2 Q.7 "An audit is an independent examination of financial information of any entity, whether profit-oriented or not, and irrespective of its size or legal form, when such an examination is conducted with a view to expressing an opinion thereon." Explain stating clearly how the person conducting this task should take care to ensure that financial statements would not mislead anybody. [MTP - Oct 19] Or The person conducting an audit should take care to ensure that financial statements would not mislead anybody. Explain stating clearly the meaning of Auditing. [RTP - May 20, MTP - Oct 21] Ans: Meaning of Audit: An Audit is an independent examination of Financial Information of any entity, whether profit- oriented or not, and irrespective of its size or legal form, when such an examination is conducted with a view to expressing an opinion thereon. This definition has the following implications: (a) Audit is an independent examination of financial information. (b) The requirement of audit applies in case of every entity, whether profit-oriented or not (NGO or Charitable Trust), whatever its business size (Small size entity or Large size entity), and whatever its legal form (Proprietorship, Partnership, LLP, or Company). (c) The purpose of an audit is to express an opinion on the Financial Statements by means of a written audit report. Points to be ensured that Financial Statements do not mislead anybody: The auditor engaged to perform the task of auditing needs to ensure the following: (a) Accounts have been drawn up with reference to entries in the books of accounts. (b) Entries in the books of account are adequately supported by sufficient and appropriate evidence. (c)None of the entries in books of account have been omitted in the process of compilation.