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PROJECT REPORT ON

ANALYSIS OF AUDIT OF A SMALL COMPANY

MASTERS OF COMMERCE DEGREE

SEMESTER- III

ACADEMIC YEAR:2015-16

SUBMITTED BY
MISS. AARTI YADAV
ROLL NO: 44

N.E.S. RATNAM COLLEGE OF ARTS, SCIENCE AND COMMERCE,


N.E.S. MARG, BHANDUP (WEST), MUMBAI-400078

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PROJECT REPORT ON

ANALYSIS OF AUDIT OF A SMALL COMPANY

MASTERS OF COMMERCE DEGREE

SEMESTER- III

ACADEMIC YEAR:2015-16

SUBMITTED BY
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER DEGREE OF
COMMERCE
MISS. AARTI YADAV

ROLL NO: 44

N.E.S. RATNAM COLLEGE OF ARTS, SCIENCE AND COMMERCE,


N.E.S. MARG, BHANDUP (WEST), MUMBAI-400078

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N.E.S. RATNAM COLLEGE OF ARTS, SCIENCE AND COMMERCE,
N.E.S. MARG, BHANDUP (WEST), MUMBAI- 400078

CERTIFICATE

This is to certify that the project report on ANALYSIS OF AUDIT OF A SMALL COMPANY is bonafide
record of project worked done by MISS. AARTI YADAV submitted in partual fulfillment of the
requirement of the award of the Master of Commerce Degree University of Mumbai during the
period of his/her study in the academic year 2015-16

INTERNAL EXAMINER:

EXTERNAL EXAMINER:

Principal
Mrs. Rina Saha

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DECLARATION

I hereby declare that this Project Report entitled ANALYSIS OF AUDIT OF A SMALL COMPANY
submitted by me for the the award of Masters Of Commerce Degree; University of Mumbai is a
record of Project work done by me during the year 2015-16. This is entirely my own work.

NAME: AARTI YADAV ROLL NO : 44 Signature

Place: Mumbai, Bhandup (W)

Date:

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ACKNOWLEDGEMENT

I owe a great many thanks to great many people who helped and supported me doing the
writing of this book.

My deepest thanks to lecturer, Prof. ASIF SIR of the project for guiding and correcting
various documents of mine with attention and care. She/ he has taken pains to go through my
project and make necessary corrections as and when needed.

I extend my thanks to the principal of NES Ratnam College of Arts Science and Commerce,
Bhandup (w), for extending her support.

My deep sense of gratitude to Principal Mrs. Rina Saha of NES Ratnam College of Art,
Science and Commerce for support and guidance. Thanks and appreciation to the helpful people at
NES Ratnam College of Arts, Science and Commerce , for their support.

I would also thank my institution and faculty members without whom this project would
have been a distant reality. I also extend my heartfelt thanks to my family and well-wishers.

Candidate Name: AARTI YADAV

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INDEX
CHAPTERS TOPICS PAGE NO

Chapter 1 Introduction Of Audit 7-10

Chapter 2 Importance, Advantages, 11-19


Disadvantages And Limitations Of
Audit

Chapter 3 The Importance Of An Audit System 20-33


To Companies And Accounting
Standards

Chapter 4 Company Profile Of Tirtharoop 34-36


Electricals Private Limited

Chapter 5 Profit And Loss A/C And Balance 37-43


Sheet And Audit Report

Chapter 6 Conclusion 44

Chapter 7 Bibliography 45-46

1.1 INTRODUCTION

Economic decisions in every society must be based upon the information

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available at the time the decision is made. For example, the decision of a bank to make
a loan to a business is based upon previous financial relationships with that business,
the financial condition of the company as reflected by its financial statements and
other factors.

If decisions are to be consistent with the intention of the decision makers, the
information used in the decision process must be reliable. Unreliable information can
cause inefficient use of resources to the detriment of the society and to the decision
makers themselves. In the lending decision example, assume that the barfly makes the
loan on the basis of misleading financial statements and the borrower Company is
ultimately unable to repay. As a result the bank has lost both the principal and the
interest. In addition, another company that could have used the funds effectively was
deprived of the money.

As society become more complex, there is an increased likelihood that unreliable


information will be provided to decision makers. There are several reasons for this:
remoteness of information, voluminous data and the existence of complex exchange
transactions

As a means of overcoming the problem of unreliable information, the decision-


maker must develop a method of assuring him that the information is sufficiently
reliable for these decisions. In doing this he must weigh the cost of obtaining more
reliable information against the expected benefits.

A common way to obtain such reliable information is to have some type of


verification (audit) performed by independent persons. The audited information is
then used in the decision making process on the assumption that it is reasonably
complete, accurate and unbiased.

1.2 MEANING OF AUDITING

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The word audit is derived from the Latin word audire which means to hear. It is
an important tool of management. It is concerned with making an analytical and
critical analysis of the books of accounts, checking and verification of evidence in
support of entries appearing in the books of accounts, and ascertaining the authenticity
of the financial statements. It is also concerned with the examination of accounting
data to determine the extent of an audit examination is too made on the basis of
evidential document such as invoice, money receipts and other records by the
authorized representative of the client. Auditor has used to send for the accountants
and hear whatever they had to say in connection with the accounts. The auditor has to
look into the facts behind figures and he must certify their accuracy. Auditing is to
ascertain the balance sheet and profit and loss account that they show a true and fair
view of the financial state of affairs of a concern. The Institute of Charted
Accountants of India has issued a number of statements of standard auditing practices
and accounting standards for guidance of Auditor of India

1.3 ORIGIN AND EVOLUTION

The term audit is derived from the Latin term 'audire,' which means to hear. In
early days an auditor used to listen to the accounts read over by an accountant in order
to check them

Auditing is as old as accounting. It was in use in all ancient countries such as


Mesopotamia, Greece, Egypt. Rome, U.K. and India. The Vedas contain reference to
accounts and auditing. Arthasashthra by Kautilya detailed rules for accounting and
auditing of public finances.

The original objective of auditing was to detect and prevent errors and frauds

Auditing evolved and grew rapidly after the industrial revolution in the 18th
century With the growth of the joint stock companies the ownership and management
became separate. The shareholders who were the owners needed a report from an
independent expert on the accounts of the company managed by the board of directors
who were the employees.

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The objective of audit shifted and audit was expected to ascertain whether the
accounts were true and fair rather than detection of errors and frauds.

In India the companies Act 1913 made audit of company accounts compulsory

With the increase in the size of the companies and the volume of transactions
the main objective of audit shifted to ascertaining whether the accounts were true and
fair rather than true and correct. Hence the emphasis was not on arithmetical accuracy
but on a fair representation of the financial efforts

The companies Act. 1913 also prescribed for the first time the qualification of
auditors

The International Accounting Standards Committee and the Accounting


Standard board of the Institute of Chartered Accountants of India have developed
standard accounting and auditing practices to guide the. accountants and auditors in
the day to day work

The later developments in auditing pertain to the use of computers in


accounting and auditing.

In conclusion it can be said that auditing has come a long way from hearing of
accounts to taking the help of computers to examine computerised accounts

1.4 DEFINITION

The term auditing has been defined by different authorities.

1. Spicer and Pegler: "Auditing is such an examination of books of accounts and


vouchers of business, as will enable the auditors to satisfy himself that the
balance sheet is properly drawn up, so as to give a true and fair view of the
state of affairs of the business and that the profit and loss account gives true
and fair view of the profit/loss for the financial period, according to the best of
information and explanation given to him and as shown by the books; and if
not, in what respect he is not satisfied."

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2. Prof. L.R.Dicksee. "Auditing is an examination of accounting records
undertaken with a view to establish whether they correctly and completely
reflect the transactions to which they relate.
3. The book "an introduction to Indian Government accounts and audit"
"issued by the Comptroller and Auditor General of India, defines audit "an
instrument of financial control. It acts as a safeguard on behalf of the proprietor
(whether an individual or group of persons) against extravagance, carelessness
or fraud on the part of the proprietor's agents or servants in the realization and
utilization of the money or other assets and it ensures on the proprietor's behalf
that the accounts maintained truly represent facts and that the expenditure has
been incurred with due regularity and propriety. The agency employed for this
purpose is called an auditor."

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CHAPTER 2 - IMPORTANCE, ADVANTAGES,
DISADVANTAGES AND LIMITATIONS OF AUDIT

2.1 IMPORTANCE OF AUDITING

For Business

1. Errors are Located

Auditing is helpful for business. The error can be located through it. The location
and correction of error is possible through auditing. The true and fair information
about business is available.

2. Frauds are Discovered

Auditing is helpful for business. The discovery of fraud is possible through it. The
guilty persons can be held responsible. The auditing accounts show fair about
business.

3. Loans Become Easy

Auditing is useful for business. Lenders for granting loans accept the auditors
accounts. The reputation of borrowers increases due to auditing. Thus auditing
accounts help the businessman to expand his activities.

4. Advise about Weakness

Auditing is useful for business. The people can seek advise from auditors. The
auditors are professional and they know their work very well. They can spotlight
the grey area. It is the duty of the business man to act upon the advise of the
auditors.

5. High Moral Values

Auditing is essential for business. There is moral check on the management and
other staff. Auditing puts the pressure on the staff of work honestly. There is no
pending work so there is less chance of errors and frauds.

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6. Tax Payments

Auditing is useful for business, tax authority accept audited accounts for
assessment of taxes. There is no further inquiry or investigation from department.
The audited accounts lessen the worries of business people.

For Owners

7. Efficiency Improves

Auditing is beneficial for business. The auditing determines the efficiency of


employees. The training and qualifies management is an asset for any business.
Such management can play dynamic role in framing and implementing the
policies.

8. Dispute is Settled

Auditing is essential for business. The audited accounts are helpful to settle the
disputes. The audited accounts become the basis of making decisions. The dispute
may relate to infringement of patents or trademarks.

9. Planning Becomes Possible

Auditing is helpful for business. The audits accounts present true and fair view of
business activities. The facts and figures can be used to prepare budge and
estimates for the next years. The projected cash receipts and payments, income
statement and balance sheet can be prepared.

10. Improvement of Internal Control

Auditing is helpful for business. The auditor can point out the weakness of internal
control system. The business management can take steps to remove these
weaknesses. The effective control systems are essential for large-scale business
enterprises.

11. Fluctuation in Profits

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Auditing is helpful for business. The auditor can make the detailed study to find of
fluctuation in profits. There are various reasons for changes in profits. The auditor
can determine the true cause of such changes.

12. High Credit Rating

The auditing is beneficial for business. The auditing accounts increase the credit
standing of any business house. The lenders can rely on audited accounts for
granting credit facility. In fact auditing is a screening test of business entity.

13. Listing at Stock Exchange

The auditing is beneficial for business. The listing of securities at stock exchange
is optional. The public limited companies can get registration at stock exchange.
Stock exchange management for registration purpose accepts the audited accounts.

14. Shareholders Protection

Auditing is beneficial for owners. The shareholders feel that their rights are
protected through auditing. They can know the performance of management.
Audited accounts help to determine the value of shares.

15. Partner Satisfaction

Auditing is helpful for partners. The sleeping partner feels satisfaction when there
are audited. The managing partners can use business property for their personal
benefit. There is moral check on managing partners.

16. Proprietors

Auditing is useful for proprietors. The audited accounts help the sole traders that
their business is going on properly. The error and fraud are pointed out auditors.
The owners can determine the efficiency of their employees or assistants.

17. Beneficiary

Auditing is valuable for beneficiaries. The auditor of a trust can nominate any
person as trustee to look after the property of a trust. Auditing can safeguard the

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right of beneficiaries. There is a moral check on the trustee to follow the by laws
of trust.

18. Deceased Estate

The auditing is helpful for dependents of decreased person. The audited accounts
presents true and fair view of financial statements. The family can rely on audited
accounts for distributing the estate of deceased person.

19. Insolvency

The auditing is beneficial for creditors. The audited accounts show true and fair
view of state of affairs of sole proprietorship or partnership. The creditor can get
their money first and then owners can get refund of capital. The audited accounts
help to settle the cases at an early date. For Government

20. Better Performance of Tax Department

Auditing is beneficial for government. Tax officers accept the audited accounts.
The assessment order can be issued without further clarification. There is saving of
money and time due to audited accounts. The performance of tax officers is
improved.

21. Exact Revenue Amount

Auditing is beneficial for government. The collection of revenue is possible at an


early date. The people are allowed to deposit various kinds of taxes. The recovery
of income is made at the start of the year. The government can start welfare project
on the basis of total revenue collected.

22. Progress of Economy

Auditing is essential for government policies. The true fair view is stated in
audited accounts. The stage of economic progress can be determined. The
government can take measures to raise the rate of economic growth.

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23. Purchase of Private Business

Auditing is helpful for government. The private business houses may not work in
favour of general public. The government can take over such business units. The
purchase price is decided on the basis of auditing of accounts.

24. Sale of Government Business

Auditing is useful for government. The policy can be framed on the basis of
audition accounts. The management comes to know the value of business. The
government can sell state owned unit to private sector. The bid price is settled on
audited accounts.

25. Inspectors

The auditing is helpful for government. The auditing accounts show the fair value
of all assets. The value of assets. The value of assets is the basis of tax. This issue
can be settle through audited accounts. The auditors are experts in their field. They
know all methods of property valuation. They can issue certified the government
agencies for valuation of property. For General Public

26. Insurers can Settle Claims

Auditing is essential for insurers. The settlement of fire or marine insurance claims
is easy through audited accounts. The policy holders and insurance company can
settle actual loss of property.

27. No Loss to Lenders

Auditing is essential for lenders. The banks and other lenders ask the borrowers to
submit audited accounts before granting loans. The audited accounts are helpful to
check the trust worthiness of customers.

28. Creditor are Protected

Auditing is essential for creditors. They can know the true performance of their
debtors. The creditor can accept this promise only when he feels that debtor is
reliable businessman. Auditor accounts provide basic information about reliability.

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29. Bidders Can Offer High Rate

Auditing is helpful for bidders. Audited accounts provide information about net
worth of any business. The people interested in purchasing the business can rely on
such information. They know the fair value of business. They can offer reasonable
price through open bidding.

2.2 ADVANTAGES OF AUDIT

A. Businessman's point of B. Investor's point of view C. Other Advantages.


view

1 Detect onof errorsandfrauds 1 . Protects interest 1. Evaluate financial status

2 Loan from banks 2. Moral check 2.Usting of shares

3 Builds reputation 3. Proper valuation of 3. Settlements of claims


investments

4 Proper valuation of assets 4 Good security 4 Evidence in court

5. Government acceptance 5. Settlement of accounts

6. Update accounts 5. FaciStates calculation of


Purchase. Consternation.

7 Suggestions for 7 Facilitates taxation


improvement

8. Useful for agency

1. Audited accounts are readily accepted by Government authorities like Tax authorities
and Central banks.
2. By auditing the accounts Errors and frauds can be detected and rectified in time.

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3. Audited accounts carry greater authority than the accounts which have not been
audited.
4. For accessing finance from financial institutions like Banks, previous years audited
accounts are evaluated for determining repayment capability.
5. Regular audit of account create fear among the employees in the accounts department
and exercise a great moral influence on clients staff thereby restraining them from
commit frauds and errors.
6. Audited accounts facilitate settlement of claims on the retirement/death of a partner.
7. In the event of loss of property by fire or on happening of the event insured against,
Audited accounts help in the early settlement of claims from the insurance company.
8. In case of Public Company where ownership is separated from management, auditing
of accounts reassure the shareholders that accounts have been properly maintained,
funds are utilized for the right purpose and the management have not taken any undue
advantage of their position.
9. To determine the value of the business in the event of purchase or sales of the
business, audited account will be the treated as the base for the evaluation.
10. The audit of accounts by a qualified auditor also help the management to understand
the financial position of the business and also it will help the management to take
decision on various matters like report in internal control system of the organization
or setting up of an internal audit department etc.
11. If the accounts have been audited by an independent person, disputes between the
management and labor unions on payment of bonus and higher wages can be settled
amicably.
12. In the event of admission of a new partner, audited accounts will facilitate the
formation of terms and conditions for joining the new partner. Last 3 years audited
accounts will give a general idea about the growth and financial position of the
business to the new partner.

2.3 DISADVANTAGES OF AUDIT

It is true that auditing as many advantages, but it as some limitations as such

1. Non-detection of errors/frauds: - Auditor may not be able to detect certain frauds


which are committed with malafide intentions.

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2. Dependence on explanation by others:- Auditor has to depend on the explanation
and information given by the responsible officers of the company. Audit report is
affected adversely if the explanation and information prove to be false.
3. Dependence on opinions of others: - Auditor has to rely on the views or opinions
given by different experts viz Lawyers, Solicitors, Engineers, Architects etc. he can
not be an expert in all the fields
4. Conflict with others: - Auditor may have differences of opinion with the
accountants, management, engineers etc. In such a case personal judgment plays an
important role. It differs from person to person.
5. Effect of inflation: - Financial statements may not disclose true picture even after
audit due to inflationary trends.
6. Corrupt practices to influence the auditors: - The management may use corrupt
practices to influence the auditors and get a favorable report about the state of affairs
of the organization.
7. No assurance: - Auditor cannot give any assurance about future profitability and
prospects of the company.
8. Inherent limitations of the financial statements: - Financial statements do not
reflect current values of the assets and liabilities. Many items are based on personal
judgment of the owners. Certain non-monetary facts can not be measured. Audited
statements due to these limitations can not exhibit true position.
9. Auditing is a postmortem examination: auditing work begins where accounting
ends then the auditor is fully depends upon the accounting transaction provided by the
accountant in the throughout the year. So auditing work is not suitable for the current
position of the business. But it is useful to the future business situation.
10. Detailed checking not possible: - Auditor cannot check each and every transaction.
He may be required to do test checking.

2.4 LIMITATIONS OF AUDITING

1. All transactions cannot be checked It is not possible for an auditor to check each
and every transaction; he has to check them on sample basis.

2. Evidence is not conclusive Audit evidence is not conclusive in nature the


confirmation of debtors is not conclusive evidence that all amount will be collected,
the conclusions are persuasive rather than conclusive.

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3. Not easy to detect some frauds Its not easy for an auditor to detect the deeply laid
frauds which involves acts designed to conceal them such as forgery, false
explanation, and not recording transaction and so on.

4. Audit cannot assure about profitability or efficiency of management Even


though the accounts are audited it doesnt that the user can take granted the future
profitability or prospects of concern as audit dont comment on efficiency of the
management.

5. Rely on experts The auditor has to rely on experts like lawyers, engineers, valuers
etc. for estimation of contingent liability and valuation of fixed assets.

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CHAPTER 3 - THE IMPORTANCE OF AN AUDIT SYSTEM
TO COMPANIES AND ACCOUNTING STANDARDS

3.1 THE IMPORTANCE OF AN AUDIT SYSTEM TO COMPANIES

Auditing is a means of evaluating the effectiveness of a company's internal controls.


Maintaining an effective system of internal controls is vital for achieving a company's
business objectives, obtaining reliable financial reporting on its operations, preventing
fraud and misappropriation of its assets, and minimizing its cost of capital. Both
internal and independent auditors contribute to a company's audit system in different
but important ways.

Business Objectives

Having an effective audit system is important for a company because it enables it to


pursue and attain its various corporate objectives. Business processes need various
forms of internal control to facilitate supervision and monitoring, prevent and detect
irregular transactions, measure ongoing performance, maintain adequate business
records and to promote operational productivity. Internal auditors review the design of
the internal controls and informally propose improvements, and document any
material irregularities to enable further investigation by management if it is warranted
under the circumstances.

Risk of Misstatement

Auditors assess the risk of material misstatement in a company's financial reports.


Without a system of internal controls or an audit system, a company would not be able
to create reliable financial reports for internal or external purposes. Thus, it would not
be able to determine how to allocate its resources and would be unable to know which
of its segments or product lines are profitable and which are not. Additionally, it could
not manage its affairs, as it would not have the ability to tell the status of its assets and
liabilities and would be rendered undependable in the marketplace due to its inability
to consistently produce its goods and services in a reliable fashion. Accordingly, an

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audit system is crucial in preventing debilitating misstatements in a company's records
and reports.

Fraud Prevention

Internal audit serves an important role for companies in fraud prevention. Recurring
analysis of a company's operations and maintaining rigorous systems of internal
controls can prevent and detect various forms of fraud and other accounting
irregularities. Audit professionals assist in the design and modification of internal
control systems the purpose of which includes, among other things, fraud prevention.
An important part of prevention can be deterrence, and if a company is known to have
an active and diligent audit system in place, by reputation alone it may prevent an
employee or vendor from attempting a scheme to defraud the company.

Cost of Capital

The cost of capital is important for every company, regardless of its size. Cost of
capital is largely comprised of the risk associated with an investment, and if an
investment has more risk, an investor will require a higher rate of return to invest.
Strong audit systems can reduce various forms of risk in an enterprise, including its
information risk (the risk of material misstatement in financial reporting), the risk of
fraud and misappropriation of assets, as well the risk of suboptimal management due
to insufficient information on its operations.

3.2 ACCOUNTING RECORDS AND FINANCIAL STATEMENT


MAINTAINED BY THE COMPANY

Good record keeping is an important part of monitoring business performance. It also


makes it easier for small business owners to meet their taxation obligations.
Appropriate and up-to-date financial records provide the necessary information for
managing the business efficiently and making sound business decisions.

To help you maintain your daily financial records, you should consider:

Setting up either a manual or electronic record keeping system that suits your
needs,

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Recording your business transactions accurately and promptly, How to keep
daily financial records
Preparing a summary account (including income and expenditure) at the end of
each month.

Maintaining good financial records starts with a good system and well-organized
business records. The system can be a simple one and does not need to be
complicated.

Disclosure of Accounting Policies

To ensure proper understanding of financial statements, it is necessary that all


significant accounting policies adopted in the preparation and presentation of
financial statements should be disclosed.

Such disclosure should formpart of the financial statements.

It would be helpful to the reader of financial statements if they are all


disclosed as such in one place instead of being scattered over several
statements, schedules and notes.

Examples of matters in respect of which disclosure of accounting policies


adopted will be required are contained in paragraph 14. This list of examples is
not, however, intended to be exhaustive.

Any change in an accounting policy which has a material effect should be


disclosed. The amount by which any item in the financial statements is
affected by such change should also be disclosed to the extent ascertainable.
Where such amount is not ascertainable, wholly or in part, the fact should be
indicated. If a change is made in the accounting policies which has no material
effect on the financial statements for the current period but which is
reasonably expected to have a material effect in later periods, the fact of such
change should be appropriately disclosed in the period in which the change is
adopted.

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Disclosure of accounting policies or of changes therein cannot remedy a wrong
or inappropriate treatment of the item in the accounts.

Main Principles

All significant accounting policies adopted in the preparation and presentation


of financial statements should be disclosed.

The disclosure of the significant accounting policies as such should form part
of the financial statements and the significant accounting policies should
normally be disclosed in one place.

Any change in the accounting policies which has a material effecting the
current period or which is reasonably expected to have a material effect in later
periods should be disclosed. In the case of a change in accounting policies
which has a material effect in the current period, the amount by which any
item in the financial statements is affected by such change should also be
disclosed to the extent ascertainable. Where such amount is not ascertainable,
wholly or in part, the fact should be indicated.

If the fundamental accounting assumptions, viz. Going Concern, Consistency


and Accrual are followed in financial statements, specific disclosure is not
required. If a fundamental accounting assumption is not followed, the fact
should be disclosed.

3.3 MEANING AND DEFINE OF AUDIT REPORT AND AUDIT


CERTIFICATE

Audit Report

An auditor, under Section 227 (2) of the Companies Act, 1956, is required to make a
report to the shareholders of the company whether the books of accounts examined by
him exhibit true and fair view of the state of affairs of the business.

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The auditor submits his report to his client giving clear and concise information of the
result of audit performed by him. The fact or information contained in the auditor's
report is not available from any other source.

The statutory auditor of a company has to express his professional opinion about the
truth and fairness of the state of affairs of the company as shown by the Balance Sheet
and of the profit or loss as shown by the Profit and Loss Account in addition to other
information in his report.

Audit Certificate - Definition

The general purpose of an audit certificate is to give to the Commission reasonable


assurance that eligible costs (and, if relevant, the receipts) charged under the project
are calculated and claimed by the contractors in accordance with the relevant legal and
financial provisions of the FP6 legal texts, including contractual provisions.

When an auditor certifies a financial statement, it implies that the contents of the
statement are reliable as the auditor has vouched for the exactness of the data. The
term certificate is, therefore, used to mean confirmation of the truth and correctness
of something after a verification of certain exact facts. An auditor may therefore
certify the circulating figures of a newspaper or the value of imports and exports of a
company.

The term certificate should not be confused with the term report'. While a certificate
affirms the truth and correctness of a fact, figure or a statement, a report is generally a
statement of facts or an expression of opinion regarding the truth and fairness of the
facts, figures and statements.

Difference between Audit Report & Audit Certificate

1. A report means simply an expression of opinions Whereas a Certificate means that


the person issuing or signing the certificate vouchsafes the truth of the statement made
by him

2. The Auditor Report is based on facts, estimates and assumptions whereas Auditor's
Certificate is based on actual facts

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3. Auditor Report is not a guarantee of the absolute correctness & accuracy of the
books of accounts. But the auditor certificate serves as a guarantee of the absolute
correctness & accuracy of the books of accounts

4. If the Auditor Report is later on found to be wrong, he cannot be held responsible


since he has given merely his opinion on the state of affairs of the company. But if the
duly signed certificate is found as wrong, he will be held responsible.

3.4 TYPE OF AUDIT REPORT

An audit report is an appraisal of a small businesss complete financial status.


Completed by an independent accounting professional, this document covers a
companys assets and liabilities, and presents the auditors educated assessment of the
firms financial position and future. Audit reports are required by law if a company is
publicly traded or in an industry regulated by the Securities and Exchange
Commission (SEC). Companies seeking funding, as well as those looking to improve
internal controls, also find this information valuable. There are four types of audit
reports.

1. Unqualified Opinion

Often called a clean opinion, an unqualified opinion is an audit report that is issued
when an auditor determines that each of the financial records provided by the small
business is free of any misrepresentations. In addition, an unqualified opinion
indicates that the financial records have been maintained in accordance with the
standards known as Generally Accepted Accounting Principles (GAAP). This is the
best type of report a business can receive.

Typically, an unqualified report consists of a title that includes the word


independent. This is done to illustrate that it was prepared by an unbiased third
party. The title is followed by the main body. Made up of three paragraphs, the main
body highlights the responsibilities of the auditor, the purpose of the audit and the
auditors findings. The auditor signs and dates the document, including his address.

2. Qualified Opinion

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In situations when a companys financial records have not been maintained in
accordance with GAAP but no misrepresentations are identified, an auditor will issue
a qualified opinion. The writing of a qualified opinion is extremely similar to that of
an unqualified opinion. A qualified opinion, however, will include an additional
paragraph that highlights the reason why the audit report is not unqualified.

3. Adverse Opinion

The worst type of financial report that can be issued to a business is an adverse
opinion. This indicates that the firms financial records do not conform to GAAP. In
addition, the financial records provided by the business have been grossly
misrepresented. Although this may occur by error, it is often an indication of fraud.
When this type of report is issued, a company must correct its financial statement and
have it re-audited, as investors, lenders and other requesting parties will generally not
accept it.

4. Disclaimer of Opinion

On some occasions, an auditor is unable to complete an accurate audit report. This


may occur for a variety of reasons, such as an absence of appropriate financial
records. When this happens, the auditor issues a disclaimer of opinion, stating that an
opinion of the firms financial status could not be determined.

3.5 ESSENTIALS OF GOOD AUDIT REPORT

The essentials of good audit report are as follows:

1. Title

An auditor report must have appropriate title, such as Auditors Report. It is helpful
for the reader to identify the auditors report. It is easy to distinguish it from other
reports. The management can issue any report about the business performance. The
title o the report is essential.

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2. Addressee

The addressee may be shareholder or board of director of a company. The auditor can
audit financial statements of any business unit as per agreement. The report should be
appropriately addressed as required by engagement letter and legal requirements. The
report is usually addresses to the shareholders or the board of directors.

3. Identification

The audit report should identify the financial statement that have audited. The
financial statement may include trading profit and loss accounts, balance sheet and
statement of changes in financial position and sources and application of frauds
statement. The report should include the name of the entity. Moreover the data and
period covered by the financial statement are also stated in it.

4. Reference to Auditing Standards

The audit report should indicate the auditing standard or practice followed in
conducting the audit. The international auditing guidelines need assurance that the
audit has been conducted as per set standards.

5. Opinion

The auditors report should clearly state the auditors opinion on the presentation in
the financial statement of the entitys financial position and the result of its operations.
The statement give a true and fair view is an auditors opinion. This opinion is usually
based on national standard or international accounting standards.

6. Signature

The audit report should be signed in the name of the audit firm, the personal name of
the auditor or both as appropriate.

7. Auditors Address

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The address of auditor is stated in the audit report. The name of city is stated in the
report for information of the readers.

8. Date of Report

The report should be dated. It informs the reader that the auditor considered the effect
on the financial statements and in his report of events or transactions about which he
become aware the occurred up to that date.

Qualified audit reports

It is necessary to firstly identify the circumstances which can give rise to a


qualification.

These are as follows:

Uncertainty arising from either a limitation upon the scope of the auditors work or an
inability to obtain any evidence regarding doubts which exist in relation to an
unresolved matter.

Disagreements arising from factual discrepancies, unsuitable accounting policies,


inadequate or misleading disclosures given in the financial statements or failure to
comply with an accounting standard or legislation. Some of these types of
disagreement should be resolved fairly easily with the client so that a qualification can
be avoided, for example a factual disagreement should lead to the financial statements
being amended to reflect the correct view. Other types of disagreement which are
perhaps more subjective will be much more difficult to resolve such as those relating
to the suitability of an accounting policy.

Secondly, it is necessary to decide upon the effect of the circumstances discussed


above.

These are classified as:

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Those having a material but not fundamental effect upon the financial
statements
Those having a fundamental effect upon the financial statements.

Fundamental means that the matter is such as to seriously distort or undermine the
view which is given by the financial statements to the extent that they could mislead
user groups.

An except for qualification will be given when the matter is a material but not
fundamental uncertainty or disagreement. An example of an uncertainty could be the
destruction of a part of the clients accounting records leading to a limitation of scope
being imposed upon the auditors work because audit evidence is then unavailable. An
example of a disagreement under this heading could be a failure by a client to apply a
reasonable depreciation policy to a particular class of fixed assets, however in both of
these examples the effect is not pervasive to the view which the financial statements
give as a whole.

3.6 GENERALLY ACCEPTED AUDITING STANDARDS

The generally accepted auditing standards (GAAS) are the standards you use for
auditing private companies. GAAS come in three categories: general standards,
standards of fieldwork, and standards of reporting.

Keep in mind that the GAAS are the minimum standards you use for auditing private
companies. Additionally, the Public Company Accounting Oversight Board (PCAOB)
has adopted these standards for public (traded on the open market) companies. Each
audit engagement you work on may require you to perform audit work beyond whats
specified in the GAAS in order to appropriately issue an opinion that a set of financial
statements is fairly presented. You need to use professional judgment and exercise due
care in following all standards.

General standards: The first three GAAS are general standards that address your
qualifications to be an auditor and the minimum standards for your work product:

As an auditor, you must have both adequate training and proficiency.

29
You are independent in both fact and appearance.
You exercise due professional care in performing your auditing tasks.

Standards of fieldwork: The next three GAAS govern how you actually do your job:

Your work is adequately planned, and all assistants are properly supervised.
You gain an understanding of the client and its environment, including internal
controls, to assess the risk of material misstatement in the financial statements
and to plan your audit.
The evidence you gather during the audit is appropriate and sufficient to
evaluate managements assertions on the financial statements.

Standards of reporting: The last four GAAS concern information you must consider
prior to issuing your audit report:

You have to state whether the financial statements are prepared using
generally accepted accounting principles (GAAP).

Just as important is to report whether GAAP are consistently applied for all
financial accounting. Should this not be the case, you have to report any
departures.

You also have to make sure that disclosures any additional information
needed to explain the numbers on the financial statements are provided.

Lastly, you have to include your opinion as to whether the financial statements present
fairly in all material respects the financial position of the company under audit.

3.7 ACCOUNTING STANDARDS (CURRENTLY APPLICABLE AND USED


IN COMPANY OR NOT)

Accounting Standards Y/N

AS 1 Disclosure of Accounting Policies Y


AS 2 Valuation of Inventories Y
AS 4 Contingencies and Events Occurring After the Balance Sheet Date Y

30
AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Y
Accounting Policies
AS 6 Depreciation Accounting Y
AS 9 Revenue Recognition Y
AS 10 Accounting for Fixed Assets Y

AS 13 Accounting for Investments Y

AS 14 Accounting for Amalgamations Y

AS 15 Employee Benefits Y

AS 16 Borrowing Costs Y

AS 18 Related Party Disclosures Y

AS 20 Earnings Per Share Y

AS 22 Accounting for Taxes on Income Y

AS 26 Intangible Assets Y

AS-1 DISCLOSURE OF ACCOUNTING POLICIES

Any change and financial impact of such change should be disclosed.


If fundamental assumptions (going concern, consistency and accrual) are not
followed, the fact to be disclosed. Going concern assumption is assessed for a
foreseeable period of one year
Accounting Policies adopted by the enterprise should represent true and fair
view of the state of affairs of the financial statements
Major considerations governing selection and application of accounting
policies are: i) Prudence, ii) Substance over form and iii) Materiality.

AS-2 VALUATION OF INVENTORIES

The cost of inventories should comprise all costs of purchase, costs of conversion and
other costs incurred in bringing the inventories to their present location and condition.

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Inventories are valued at lower of cost or net realisable value. Specific identification
method is required when goods are not ordinarily interchangeable.

AS-4 CONTINGENCIES AND EVENTS OCCURRING AFTER THE


BALANCE SHEET DATE

The amount of a contingent loss should be provided for by a charge in the statement of
profit and loss if it is probable that future events will confirm that, after taking into
account any related probable recovery, an asset has been impaired or a liability has
been incurred as at the balance sheet date, and a reasonable estimate of the amount of
the resulting loss can be made.

Assets and liabilities should be adjusted for events occurring after the balance sheet
date that provide additional evidence to assist the estimation of amounts relating to
conditions existing at the balance sheet date or that indicate that the fundamental
accounting assumption of going concern (i.e., the continuance of existence or
substratum of the enterprise) is not appropriate.

AS-6 DEPRECIATION ACCOUNTING

Allocate depreciable amount of a depreciable assets on systematic basis to each


accounting year over useful life of asset, useful life may be reviewed periodically.

Basis must be consistently followed and disclosed. Any change to be quantified and
disclosed.

Rates of depreciation should be disclosed.

A change in method followed be made only if required by the statute, compliance to


Accounting Standard, appropriate preparation or presentation of the financial
statement.

In cases of extension, revaluation or exchange fluctuation, depreciation to be provided


on adjusted figure prospectively over the residual useful life of the asset.

AS-10 ACCOUNTING FOR FIXED ASSETS

32
The cost of a fixed asset should comprise its purchase price and any
attributable cost of bringing the asset to its working condition for its intended
use.
Self-constructed asset shall be accounted at cost.

In case of exchange of asset, fair value of asset acquired or the net book value of asset
given up whichever is more clearly evident shall be considered.

Revaluation is permitted provided it is done for the entire class of assets. The basis of
revaluation should be disclosed.

Increase in value on revaluation shall be credited to Revaluation Reserve while the


decrease should be charged to Profit and Loss Account.

33
CHAPTER 4 COMPANY PROFILE OF TIRTHAROOP
ELECTRICALS PRIVATE LIMITED

TIRTHAROOP ELECTRICALS PRIVATE LIMITED

4.1 ABOUT THE COMPANY

Tirtharoop Electricals Private Limited, founded in 1987 promoted by Mr.


SubhasGokhale, at 7,Yashodeep Apt,1356 B, Shivaji Road, Panvel , Navi Mumbai
,Maharashtra 410206. The Company is primarily engaged in providing Electrical
project designing with automation & related instrumentation. It undertakes Testing,
Installation & Commissioning of electrical fittings, erection, industrial fabrication,
Supply of H.T. & L.T. switchgear, upgrade systems for both HT & LV loads for
various valued customers. It is pioneer in providing Turnkey Solution for installation
of all electrical equipments right from the stage of Designing to Implementation
electrical equipment. All the necessary approvals for commencement of this business
are in place.

4.2 COMPANY INFORMATION

Corporate Identification Number U31400MH1987PTC042128


TIRTHAROOP ELECTRICALS PVT
Name
LTD
RoC RoC-Mumbai
Registration Number 42128
Company Category Company limited by shares
Company Sub Category Indian Non-Government Company
Class of Company Private Company
Authorised Capital (in Rs.) 500,000
Paid up capital (in Rs.) 451,200
Number of Members(Applicable only in case
-
of company without Share Capital)
Date of Incorporation 07 January 1987
7, YASHODEEP APARTMENT, 1356-B,
Address 1
SHIVAJI ROAD,

34
Address 2 PANVEL, DIST - RAIGAD
City PANVEL
State Maharashtra
Country INDIA
Pin 410206
Whether listed or not Unlisted
Company Status (for eFiling) Active

4.3 BACKGROUND OF KEY MANAGEMENT PERSONNEL

Being the Second Generation entrepreneur; Mr. Sachin SubhashGokhale (Director)


son of Mr. SubhasGokhale, aged 33 years holds a bachelor degree of Commerce and
Diploma in Electrical Engineering from DIESE, Pune. He is qualified Engineer with
more than 10 years of qualitative experience. He has proven track record of
undertaking valued engineering initiatives, establishing new set-ups, streamlining
operations, evolving cost reduction mechanism, producing engineering techniques and
creating a team work environment to enhance productivity with new initiatives and
innovations within the organizations. He is a dynamic young and enterprising youth
with effective communication skills with great presentation skills. He has the ability to
convert adverse business environment to a favorable business affair.

Mr. Vinay DattatrayaBhave designated as (Head Sales) aged 49 years,


residing at Flat 201, Kanak Residency, Plot No. 54, MCHS, Near Purohit Hospital,
Old Panvel, Dist. Raigad, Maharashtra-410206. He is a BTech.(Elec.) and holds
Diploma in Electrical Engineering from C.W.I.T., Pune . He is a qualified Engineer
with more than 25 years of qualitative experience in industries like Orkay Polyester,
Hikal etc. Expert at planning and effecting preventive maintenance schedules of
various machineries to increase machine up time and equipment reliability. He is
related to various Social service organizations and is a Founder committee member of
Friends of children organization, a NGO working for poor students. A Member of
Managing Committee of Pen taluka Maternity & Children Welfare Center, a
Charitable Hospital providing Medical Assistance to Poor & Needy people. He is one

35
of the Founder Managing committee Member of Sobatee a NGO working for
Betterment, Awareness, Education, Environment, Medical Assistance etc for more
than 6 years. He is highly influential with regards to his contacts relating social
welfare cause.

Mr. VinitVinayak Joshi designated as (Head - Admin & Logistic) aged 33


years is a resident of At & Post Palaspe, Tal. Panvel, Dist. Raigad Maharashtra-
410206. He holds a Master of Commerce degree and is Finance Management
graduate. He is a well known academician with more than 10 years of qualitative
experience of in guiding and training finance & accounts students. An expert team
builder and player, has an experience in different areas such as Accounts,
Administration and Customer relations. He is a visiting faculty for MBA at various
colleges such as, Mumbai School of Business, S. P. More College, Pillais College etc.

4.4 KEY DELIVERABLES BY THE COMPANY

Overseeing breakdown and preventive maintenance of Spinning, Polyester,


Test Rising, Knitting, Utility Plants and Diesel Generating Sets.
Executing Fault fining and rectification of faults in control circuits, power
circuits or in any type of electrical breakdown in various types of equipments,
like Extruders, (D.C.), Agitators, Chillers, Compressors, Pumps, Heaters, Lifts
etc.
Responsible for:

- Erection of Machine Tools.

- Process re-engineering.

- Material Management.

- Cost reduction.

Monitoring switchyard, H.T. (22 KV) and L.T. substation.


Responsible for implementing preventive maintenance of switchyard, H.T. and
L.T. breakers, transformers, PCCs, MCCs, lead acid batteries, etc.
Overhauling motors in electrical workshop.

36
CHAPTER 5 - PROFIT AND LOSS A/C AND BALANCE SHEET
AND AUDIT REPORT

TIRTHAROOP ELECTRICALS PVT. LTD.

Balance Sheet as at 31-Mar-2014In` (Rupees)

Particulars Note No, as at 31 -Mar-2014 as at 31-Mar-2013


I. EQUITY AND LIABILITIES
1 Shareholders' Funds 147311162 1090900.23
(a) Share Capital 2 451200.00 451200.00
(b) Reserves and Surplus 3 1021915.62 639700.28
2 Non-Current Liabilities 138343100 138343100
(a) Long-Term Borrowings 4 1399435.00 1389435.00

3 Current Liabilities 1767787.96 2002349.33


(a) Short Term Borrowings 5 728830.32 344654.32
(b) Trade Payables 6 374422.72 1121234.72
(c) Other Current Liabilities 7 660689.45 339997.82
(d) Short Term Provision 8 3795.47 196462.47

Total 4630338.53 4482684.61


II. ASSETS
1 Non-Current Assets 647022.00 69325100
(a) Fixed Assets 9 322970.00 369203.00
(i) Tangible Assets 310936.00 353709.00
(ii) Intangible Assets 12034.00 15494.00
(b)Long-Term Loans and Advances 10 324052.00 324052.00
2 Current Assets 3983316.53 3783429.61
(a) Current Investments 11 175393.04 175393.04
(b) Inventories 12 275980.00 235098.00
(c) Trade receivables 13 3240920.47 3030252.50
(d) Cash and Cash Equivalents 14 220627 07 278290.07
(8) Short Term Loan & Advances 15 40080.00 40080.00
(f) Other Current Assets 16 30316.00 30316.00

37
Total 463033813 4482684.61
TIRTHAROOP ELECTRICALS PVT. LTD.
7,Yashcipeep Apt, 135S B.Shivaji Road Panvel.

Statement of Profit and Loss for the year ended 31 -Mar-2014In` (Rupees)

Particulars Note 1-Apr-2013 to 1-Apr-2012 to


No. 31-Mar-2014 31 -Mar-2013
I Revenue from Operations 17 4934998.49 10242318.52
II Other Income - 32018.00
III TOTAL REVENUE (I + II) 4934998.49 10274336.52
IV EXPENSES
Purchases of Stock-in-Trade 18 2331601.74 6473439.95
Changes in Inventories 19 -40832.000 30362.00
Employee Benefit Expenses 20 345348.00 231729.30
Finance Costs 21 40010.00 69750.00
Depreciation and Amortization Expenses 9 46233.00 43053.32
Other Expenses 22 1980472.41 3066345.06
TOTAL EXPENSES 4602733.15 9919299.63
V Profit before Exceptional and Extraordinary 332215.34 355036.89
Items and Tax (IIII-IV)
VI Exceptional Items - -
VII Profit before Extraordinary Items and Tax 332215.34 355036.89
VIII Extraordinary Items - -
IX Profit Before Tax 332215.34 355036.89
X Tax Expense
Current Tax - -
Deferred Tax - -
XI Profit/(LosaJ for the period from 332215.34 355036.89
Continuing Operations(IX-X)
XII Profit/(Loss) from Discontinuing Operations - -
XIII Tax Expense of Discontinuing Operations - -
XIV Profit/(LosaJfrom Discontinuing Operations - -
(after taxHXII-Xlll)
XV Profitless) for the Period(Xl+XIV) 332215.34 355036.89

38
XVI Earnings per Equity Share
-Basic - -
-Diluted - -

5.3 ACCOUNT SCRUTINIZED FROM BALANCE SHEET AND PROFIT AND


LOSS ACCOUNT

Scrutiny: Scrutinizing the accounts generally and, in particular, examining the


composition of final balances; and ascertaining the extent of clearance of the balances
brought forward from the previous year particularly those relating to receivables and
payables, sale or disposal of fixed assets and of inventories.

13. Trade receivables In` (Rupees.)

Particulars as at 31 -Mar-2014 as at 31 -Mar-2013

Outstanding for lass than 6 months from the due 595076.00 2633349.50
date

Unsecured, considered doubtful 595076.00 2633349.50

Outstanding for more than months from the due 2645344.47 396903.00
date

Unsecured, considered doubtful 2&45S44.47 336903.00

Total 3240920.47 3030252.50

Debtor ledger: -

These ledger accounts of customers are opened to whom trader has sold the goods, so
its other name is also sale account ledger. Because all credit sale's amount can be
checked from the amount due from debtors in this ledger. It is also one place where
we can find each debtor's closing balance.

The objectives of studying audit of debtors ledger is -

39
1. To know about ledger (debtors).

2. To verify that there are no errors and frauds in this ledger.

3. To confirm that company has prepared debtors ledger without any errors and
frauds and it is doubt free ledger.

20 . Employee Benefit Expenses In ` (Rusees)

Particulars as at 31 -Mar-2014 as at 31 -Mar-2013

Salaries and Wages 300906.00 156591.00

Staff Welfare Expenses 44442.00 75136.30

Total 345348.00 231729.30

It is broad in its applicability as it covers all short-term and long term employee
benefits. For example, annual paid leave (though not en cashable), long-term service
rewards, subsidised goods or services, etc. are also covered.

40
5.4 DRAFT OF AN AUDIT REPORT

INDEPENDENT AUDITORS REPORT

To, The Members

M/s. Tirtharoop Electricals Pvt. Ltd.

Maharashtra 410 206

Report on Financial Statements:

1. We have audited the accompanying Financial Statements of M/s. Tirtharoop


Electricals Private Limited (the Company) which comprise the Balance Sheet as
at 31st March 2013 and Statement of Profit and Loss for the year ended on that date,
and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements:

2. Management is responsible for the preparation of these Financial Statements that


give true and fair view of the financial position and financial performance of the
Company in accordance with the Accounting Standards referred to in sub section (3C)
of section 211 of the Companies Act, 1956 (the Act). This responsibility includes
the design, implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility:

3. Our responsibility is to express an opinion on these financial statements based on


our audit. We conducted our audit in accordance with the Standards on Auditing
41
issued by the Institute of Chartered Accountants of India. Those Standards require that
we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material
misstatement.

4. An audit involves performing procedures to obtain audit evidence about the


amounts and disclosures in the financial statements. The Procedures selected depend
on the auditors judgement, including the assessment of the risks of material
misstatement of the financial statement, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the companys
preparation and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of the
accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our Audit opinion.

Opinion:

6. In our opinion, and to the best of our information and according to the explanations
given to us, the financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st
March, 2014; and

(b) in the case of Statement of Profit and Loss, of the Profit for the year ended on that
date.

Report on Other Legal and Regulatory Requirements:

7. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of the audit.
42
b. In our opinion, proper books of account as required by law have been kept by the
company so far as appears from our examination of those books.

c. The Balance Sheet and Statement of Profit and Loss dealt with by this report are in
agreement with the books of account;

d. In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the
Accounting Standards referred to in sub section (3C) of section 211 of the Companies
Act, 1956;

e. On the basis of written representations received from the directors as on 31st


March, 2013 and taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2014 from being appointed as a director in terms of
clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f. Since the Central Government has not issued any notification as to the rate at which
the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued
any Rules under the said section, prescribing the manner in which such cess is to be
paid, no cess is due and payable by the Company.

For XXX

CHARTERED ACCOUNTANTS

Place : Mumbai MR. A

Date : 31/08/2014 (Proprietor)

Membership No. 132564

43
CONCLUSION

The project concluded that, given the complexity and development of


Company, the overall level of compliances with the standards and codes is of high
order. This project gives the correct ideas about how the major areas can be found by
way of effective auditing system i.e. errors, frauds, manipulations etc. form this
auditor get the clear idea show to recommend on the position. Project also contain that
how to conduct of audit of the company, what are the various procedure through
which audit of company should be done. Form auditing point of view, there is proper
follow up of work done in every organization there no misconduct of transactions is
taken places for that purpose the auditing is very important aspect in todays scenario
form company and point of view.

44
TYBCom Accountancy Auditing-II

Advanced Auditing Mcom Part-II

https://www.google.co.in/?gfe_rd=cr&ei=wcIsVue4CcSxogO585yADA&gws_rd=ssl#q=aud
it+of+small+company

http://www.prenhall.com/scarbzim/html/smallbus.html

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http://www.dor.wa.gov/Content/Home/help/tutorials/PreparingForAnAudit/scripts/NarrativeS
cript.pdf

https://www.gov.uk/audit-exemptions-for-private-limited-companies

http://www.cpaireland.ie/docs/default-source/Technical-Resources/Auditing/information-
sheet-from-ccab-i-on-increase-in-small-company-amp-audit-exemption-
thresholds.pdf?sfvrsn=

http://www.nolo.com/legal-encyclopedia/irs-audit-auditors-small-business-30033.html

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