1) Audit process refers to the actual work that is to be carried out in order to achieve the Audit Objective.
2) For Effective and Techniques audit work, the auditor has to frame a proper scheme of work and determine the procedures and Techniques that are needed for the collection of purposeful Audit Evidence.
3) In the process of audit, the auditor should ensure that nothing is missed which needs to be followed to achieve the audit objective.
4) The frame work or the schemes of audit process are as follows:
a) Formulation of a broad Audit Plan for conducting the audit work smoothly and to ensure the Quality of audit work.
b) Examination and Evaluation of the Nature and Extent of the Internal control system.
c) Ensuring the Arithmetical Accuracy of the books of accounts by examining the opening balances, receipts & payments, costing records carry forwards closing balances, etc.
d) Examining the Validity or Legality of the transaction with reference to the documentary evidence (i.e. Vouching).
e) Verifying the validity of transaction’s with reference to the following: -
i. Legal aspects (i.e., related provisions of the statue)
ii. Authorization by competent authority.
iii. Provisions relating to legal documents of the entity such as MOA and AOA.
iv. Other related Accounting Principles.
5) Examination and verification of assets with reference to their Existence, Ownership, title and valuation
6) Examination of liabilities in terms of their Nature and Certainty
7) Examination of financial statements (P&L a/c Balance sheet) in terms of their Statutory Requirements (sch. VI compliance etc.)
Examining whether all necessary statutory requirements (applicable to the entity) are duly complied
9) Performing over all checks in order to verify the overall Reliability of financial information.
10) Performing Ratio Analysis and Trend Analysis in order to locate the overall Material Discrepancies.
Conclusion: – On completion of the above audit process, the auditors arrive at a conclusion regarding the free and fair view of the financial information. Basing on such conclusions the auditor proceed to issue the Audit Report.
