AUDITING METHODS IN

EDUCATION

BY CMA D.P.SINGH
B.SC, MA, MBA,FICMA
 AUDITING METHODS IN EDUCATION

 The word Audit is derived from the Latin word

“audire” which means to hear.
 In initial times of its development, the firms or the
organizations used to invite a team of experts to
examine the affairs of its working and report on it for
any expected frauds or malpractices by oral
examination or asking relevant questions. And
propose corrective steps to be taken for future
guidance.
 AUDITING METHODS IN EDUCATION

Definition:
 Auditing is the independent
examination 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.
 AUDITING METHODS IN EDUCATION

OBJECTIVES OF AUDITING
 Objectives of auditing can be broadly
categorized into
 Main Objectives
 Secondary Objectives
 Specific Objectives
 AUDITING METHODS IN EDUCATION

Main Objectives:
 Expression of expert opinion.
 Independent checking and reporting on different
financial statement of the organization.
 To check whether in conformity with Generally
Accepted Accounting Principles.
 Disclosure of facts in the financial statements.
 Truth & fairness of the financial position and
operating results of the organization.
 AUDITING METHODS IN EDUCATION

Secondary Objectives:
 There are certain inherent limitations of Audit
examination as it would not be possible for the
Auditor to discover all errors and frauds in the
financial statements due to limitation of his test
checking and the time period limitations.
 The Secondary Objectives are
 Detection and prevention of Errors; and
 Detection and prevention of Frauds
 AUDITING METHODS IN EDUCATION

Detection and prevention of Errors:

 Errors are generally innocent but sometimes errors which might
appear so may be intentional. Following are the types of Errors:
 Clerical Errors-
 Errors of Omission; and
 Errors of Commission.
 Errors of Principle-
 Compensating or Off-setting Errors; and
 Errors of Duplication.
 AUDITING METHODS IN EDUCATION

Detection and prevention of Fraud:

 Fraud means false representation or entry made
intentionally or without belief in its truth with a
view to defraud somebody.
 Following are the chief ways in which fraud may be
perpetrated.
 Embezzlement of Cash.
 Misappropriation of Goods.
 Fraudulent manipulation of Accounts.
 AUDITING METHODS IN EDUCATION

Specific Objectives:
 Review of Operations and Polices
 Performance Audit
 Management Audit
 Cost Audit
 Efficiency Audit
 Quality Audit
 AUDITING METHODS IN EDUCATION

Types of Audit
 Statutory Audit
 Internal Audit
 IT Audit
 Systems Audit
 Special Audit
 Secretarial Audit
 AUDITING METHODS IN EDUCATION

Relevance of Auditing
methods in Education:
 Education as a system with many sub-systems
 Audit of Prevalent Practices and Policies
 Audit to have support of Management
 Inspection is also a type of Audit
 Internal Audit necessary for finding adequacy of
Check and Balances.
 AUDITING METHODS IN EDUCATION

Personal Experience as Audit Officer for five

years in University Grants Commission.
 Maiden Audit with 25 serious observations.
 Alternative years theft of photo-equipment.
 BRS difference for three years.
 Current Liabilities lying for 4 years.
 Negative Sales figure in Annual Accounts.
 Pune Audit with 50 Audit paras in 5 working days.
 Bhopal Audit-Director Suspended & later terminated
after Special Investigation.
 Delhi Audit-Funds surrendered for 3 years Performance
Challenged.
 AUDITING METHODS IN EDUCATION

Personal Experience as Audit Officer in Min.

of Tourism & Civil Aviation.
 Audit of IHM
 Difference in Opening Balance in Cash Book & Final
Accounts.
 Grants from Min. neither fully utilized and nor
returned
 Capital Expenditure shown as Revenue
 Purchase system not as per Govt. guidelines-General
Financial Rules.
 AUDITING METHODS IN EDUCATION

Personal Experience as Internal Audit Officer

in Sangeet Natak Academy.
 Cash Book not on daily basis.
 Check and balances principles not followed.
 Principle of Propriety not followed in Purchases
and Tents & Equipments on Rent.
 Recruitments and appointments not as per Govt.
Rules.
 Same Accounts Officer & DDO for Ravindra Rang
Shala, Kathak Kendra and SNA,
 AUDITING METHODS IN EDUCATION

Personal Experience as Internal Audit Officer in

ICPR.
 Many Expenses not as per Budget.
 Irregularities in Purchases and Procurements-Staff Car
etc.
 Postal Stamps embezzlement case and Suspension of
dealing hand (ex-service man).
 New Office Premises lying vacant for 3-4 years and
paying rent of the present premises.
 Old machines and equipments not declared
unserviceable and un-usable and not sold for many
years
 AUDITING METHODS IN EDUCATION

Personal Experience as Deputy Registrar

(Finance & Accounts) NIFT, New Delhi.
 Central Purchase Officer experiences.
 Case of Suspended & Terminated Registrar-CBI Case
 Debit Notes and Purchase of Equipments for NIFT
Centers – Huge Embezzlement Presenting Officer CVC
 Case of Capitalizing purchase of Magazines and
Journals.
 3 Cs’ and RTI
 CMA D.P. SINGH
{B.Sc, MA, SAS(AAO), MBA, FCMA}
Connect @ cmadpsingh@gmail.com
+91-9811154931