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This book comprehensively covers the entire cycle of audit of financial statements, starting from the ‘appointment of the auditor’ to the ‘issuance of the audit report’. It also provides guidance on ‘risk-based audit’ as per the Standards on Auditing issued by the Institute of Chartered Accountants of India (ICAI).

This book will be helpful for audit assistants, engagement partners, and small & medium practitioners.

The Present Publication is the latest 2022 Edition, authored by CA Pranav Jain, updated till 31st March 2022. The noteworthy features of the book are as follows:

[Comprehensive Explanation of Audit Procedures] in an easy to understand language, keeping in mind the junior staff or less experienced auditors

[Examples of Potential Risks of Material Misstatement] are included in the book for the particular financial statement area

[Interlinking of Audit Procedures & Risks of Material Misstatements] in addition to other procedures required as per the standards on auditing or meeting the statutory requirements

[Practical Examples] have been included to explain the audit procedures & other concepts

[Numerical Examples] have been included to explain the concept of FIFO & weighted average in case of valuation of inventories

[Real Case Scenarios] are used to explain the concepts to bring more clarity

[Examples for the Audit Team to Understand Audit Procedures] are included in this book

[60+ Templates] to facilitate the auditor in meeting the documentation requirements & obtain information in a meaningful format

[Linkages to Legal Requirements] are included in this book. Examples of such linkages are as follows:

Companies Act, 2013

Accounting Standards

Standards on Auditing besides covering reporting requirements such as CARO 2020 and disclosure requirements as per Companies Act, 2013 & Accounting Standards

[Illustrative Disclosures as per revised Schedule III & Requirements of Accounting Standards] for each financial statement area to enable the auditor for the following:

Adequate disclosures in financial statements

Meeting reporting requirements

Helping even the junior-most team member to understand the concept

The book has 49 chapters divided into four divisions (covering each stage of the audit of financial statements), which are as follows:

Division 1 | Preliminary Activities

This division describes in detail the preliminary activities such as

Appointment

Rotation

Resignation

Removal of Auditor

The Requirements of Joint Audit

Division 2 | Planning of Audit

This division is divided into 13 chapters, each covering a specific element of audit planning. This division has an in-depth analysis of the following:

Understanding the entity and its environment

Identification and assessment of risks of material misstatement

Response to identified risks

Determination of materiality, among others

Logistics and management of audit

Division 3 | Audit of Each Line Item of the Financial Statement

There is an in-depth discussion of core concepts such as:

Professional scepticism

Documentation

External Confirmations

Each chapter in this division covers a specific line item of the financial statement

Each chapter describes the possible risks, such as:

Material Misstatement

Audit Procedures

Description of legal requirements such as accounting standard and Companies Act, 2013

Additionally, each chapter includes the reporting requirements required by CARO 2020 or Companies Act 2013, disclosure requirements of Schedule III to Companies Act, 2013 and applicable accounting standards

There are also illustrative disclosures as per Schedule III and Accounting Standards

Division 4

This division consists of 8 chapters covering aspects such as:

Going Concern

Subsequent Events

There is detailed guidance on the following:

Audit Quality Assurance

Audit Completion Activities

Evaluation of Results of Audit Procedures

This division also covers written representations and communication with those charged with governance

There is a detailed analysis on forming an opinion on the financial statements and covers concepts such as modification to the auditor’s report, the emphasis of matter, etc.

Appendices

The book also includes 62 appendices that provide various templates to assist the auditor in gathering information from the entity or meeting the documentation requirements of the standards on auditing, or creating speaking work papers for the audit file.