Learn How to prepare for Auditing and Assurance

Most of the student think that Auditing and assurance is too difficult to prepare and also a big reason to failure. But main thing is that in this subject you just need to understand the art of learn to audit subject

Audit subject is very easy & interesting. If you interact with audit you will find it very easy

However one part of this article also helps you to score in ANY THEORY SUBJECT INCLUDING IT & SM.

Most of the Students have issues like

a.  What to read;

b.  How to read;

c.   Which study material to prefer;

d.  How to write;

e.  Presentation tips;

f.    To what extent read PM, RTP & Solved scanner; &

g.  Small Small but important tips etc.

Mostly be resolved.

Part II – The Reading

In order to score 60 or more in IPCC Audit or any subject, STRICTLY READ ALL THE TOPICS;

therefore put in an option to keep any topic in option. strictly read all topics very carefully;

No one (EVEN ICAI) can guarantee that the marks & topic trend in the history will continue in an upcoming examination;

Read any topic from your preferred book or notes, thereafter read & understand how beautifully the answers has been drafted in ICAI PM.

Let me share some tips that can help you to score better in Audit & ultimately help you to contribute in aggregate marks in second group of IPCC.

Important tips

1.  Write neatly and avoid cutting.

2.  Make short para’s of 4-5 lines each.

3.  Leave proper space and start new para after leaving 1 blank line.

4.  Underline key-words

5.  Proper alignment should be there.

6.  If answer is to be given point-wise, always answer in point wise one below the other.

7.  To the extent possible, answer to the point.

8.  Always write question number and sub question clearly on the left had side of the page.

9.  Proper heading should be there.

10.      Always mention the act to which the section belongs. Also mention the year in

11.      which the act was passed.

12.      Include short introduction and conclusion para

13.      Don’t focus on quantity, focus on quality content

Chapter wise discussion

Chapter 1) – Nature of Auditing;

Chapter 2) – Basics concepts in Auditing;

Chapter 3) – Preparation for an audit; &

Chapter 4) – Internal Control

Above 4 Chapters contains Many Basic Concepts in Auditing.

Thus an IPCC student should definitely read & understand these 4 Chapters.

Further, these chapters are having connection in CA Final.

Again NO TOPIC IN OPTION.

Chapter 5) Vouching & Chapter 6) Verification are easy & Interesting as well & practical approach has been followed in it.

Chapter 7) & 8) The Company Audit I & II – these 2 chapters are law based chapters.

Thus in order to become MASTER in these 2 chapters, you should have following qualities:

a.  Good command over English;

b.  Good command over Law;

c.   Follow the practical approach;

d.  Imagine the situation given before you; &

e.  Imagine yourself as an auditor.

Chapter 9) Special Audits – This covers the topics such as

·       Audit of government expenditure;

·       Performance Audit;

·       Audit of sanctions;

·       Audit against Rules & Orders;

·       Audit against provision of funds; &

·       Propriety Audit.

For above types of audit, prefer to use the KEY WORDS used in the topic, this will help you to score good.

·       Audit of NGO;

·       Audit of Partnership Firm;

·       Audit of Educational Institutions;

·       Audit of Hotel;

·       Audit of Hospital;

·       Audit of sole proprietor;

·       Audit of Theatre

For these topics the practical approach has been used.

Students will surely find these topics interesting & interacting.

For answering the question in these topics, you should first understand the nature of business & important areas.

More question may come like audit procedure.

Audit Procedure is something an auditor does or should do in order to do audit.

Audit Technique means how the Audit procedure is conducted.

Audit procedure for audit of Receivables may be as follows

1.            Vouch the Credit Sales Transaction;

2.            Vouch for payment received;

3.            Recompute the discount or any kind of concession if any;

4.            Pay Special attention towards Bad Debts; &

5.            Analyse whether any (or any additional) Provision for Doubtfull Debts is required.

Now in order to perform audit procedure like Vouch the Credit Sales Transaction, Sampling & External Confirmations etc are audit techniques.

In short,

Audit Procedure means “What you have to do.”

&

Audit Technique means “How you will do it.”

Chapter 10) Standards on Auditing – Average Marks 15.5 (Source – ICAI PM)

Read & Understand the objectives of Standards on Auditing.

If you do so, you will be able to understand the content of Standards on Auditing & you will get an answer why the Standard on Auditing has been drafted.

Most of the Standards on Auditing are such that if you understand their objectives, you can understand the Standards on Auditing easily.

Each Standard on auditing conveys the specific & unique message.

Try to understand that message & you will love Standards on Auditing.

Thus my suggestion is to read & understand ALL the Standards on Auditing applicable to IPCC.

LIST DOWN the important sections in Company Audit I & II on index page so that during one day before exam you can revise all of them quickly & you can refer only those where you are poor.

Read all the Topics of the syllabus since each topic has its own weight age.

In order to remember the SA number & SA name, some of the memory tips have been given as follows.

Please have a look on it also.

SA Memory Tip

SA 200 – Overall Objectives Of The Independent Auditor And The Conduct Of An Audit In Accordance With Standards On Auditing

MEMORY TIP:- There are TWO O in the beginning of the name. Thus TWO OO i.e. 200.

SA 250 – Consideration Of Laws And Regulations In An Audit Of Financial Statements

MEMORY TIP:- Audit of Companies Registered Under section 25 of the Companies Act, 1956.

SA 320 – Materiality In Planning And Performing An Audit

MEMORY TIP :- Everyone have 32 teeth to eat any MATERIAL.

SA 330 – The Auditor’s Responses To Assessed Risks

MEMORY TIP :- Divide the name into two parts

Part 1 – The Auditor’s Responses

Part 2 – To Assessed Risks

SA 402 – Audit Considerations Relating To An Entity Using A Service Organisation.

MEMORY TIP:- Section 420 of Indian Penal Code is for Forgery & Fraud etc. i.e. Chori

But the SA number is 402, thus Memory Tip (in HINDI) is Service Organisation thik se chor bhi nahi hai.

SA 450 – Evaluation Of Misstatements Identified During The Audit

MEMORY TIP:- 45 Years of Principal (Sir) has identified the misstatements during the audit.

SA 500 – Audit Evidence

MEMORY TIP:- Rs. 500 Currency note is an audit evidence.

SA 501 – Audit Evidence – Specific Considerations For Selected Items

MEMORY TIP:- SA 501 is one step ahead of SA 500.

SA 550:- Related Parties

MEMORY TIP:– Five fingures of one hand are totally related to five fingures of other hand.

Note – before starting SAs 600 series, these series are designed for “USING THE WORK OF OTHERS”

SA 610:- Using The Work Of An Internal Auditor

MEMORY TIP – In Number SA 610, 1 is resembles as I, I for Internal Auditor.

SA 620:- Using The Work Of An Auditor’s Expert

MEMORY TIP – 420 + 200. An Auditor Expert is 420 first of all.

SA 700:- Forming an Opinion And Reporting On Financial Statements

MEMORY TIP:- you might have watched James Bond movie(s). His Number is 007.

700 is just opposite of 007. The Memory Tip is James Bond has formed ulta pulta opinion.

Part III – The Writing Tips

1. Topic – Vouching – In IPCC, the question often comes for vouching.

Average Marks – 9.7 (Source – ICAI PM)

You may write following points as common for all vouching type question.

1.  Occurance – The auditor should see that the transaction took place during the period under audit.

2.  Completeness – The auditor should see that the transaction is complete & there is NO unrecorded transaction during the period under audit.

3.  Transaction pertains to the entity under audit.

4.  Classification – that the transaction has been appropriately classified.

5.  Authority –Auditor should see that the transaction is authorized by the appropriate authority.

6.  Signature – that the voucher has been signed by the appropriate concern.

2. Topic – Verification – In IPCC, the question comes for Verification of Assets & Liabilities

Average Marks – 9.3 (Source – ICAI PM)

You may write following points as common for all verification type question.

1.  Assets or Obligation – If the question is for Assets – Assets is an Resource to the entity.

2.  If the question is for Liabilities – The liability is an obligation.

3.  Valuation – It has been appropriately valued as on the Balance Sheet date.

4.  Pledge – Auditor should verify whether any assets has been pledge against any loan & If yes whether the same has been disclosed by the entity.

5.  Physical Verification – The auditor should physically examine the asset.

6.  7 – 12 Extract for Land & Building.

3. After you finish your reading, close down your books & try to write answer for previous examination.

While writing answers, your objectives should be

On first writing – Accurate Answers,

On second writing – Accurate answers,

– Within time &

– Good presentation.

VERY IMPORTANT TO NOTE THAT the first writing may be after reading PM without setting time & without sitting in examination condition.

While during second writing – it should be under examination condition.

The question may arise in your mind that why writing practice.

The answer is the writing practice suggest you

– Writing speed,

– Handwriting.

Note that the handwriting needs not to be beautiful but at least it should be readable.

Conclusion – Writing practice teaches you to have a balance between Handwriting & writing speed.

Part IV – The Presentation

Present your paper in a unique form.

Some expert students & Famous faculties have given following tips that will help you.

1)    Write answer point wise & avoid Paragraph writing answers.

2)    Avoid short cut words.

3)    Leave a seprate line between two points.

4)    Each seprate sentence should start in a seprate line.

5)    Underline with a pencil the main body of the answer & also the conclusion.

6)    Each sub – question should begin on a seprate page,

7)    There should be Heading to the answer & that heading of the answer should be BOLD & UNDERLINED.

8)    The vertical line on the Right hand of the page needs not to be drawn.

It may be Imaginary. So you leave some space before your line comes to an end.

Moral – The presentation has good Marks.

Note – Part IV of the article is also useful for all theory papers.

Please be helping hands & share the notes to the maximum number of students.

78145-28240
www.empiresacademy.in