1. Integrity, objectivity and independence
As
per this rule, auditor should do his auditing work independently. He should not
be affected due to the any approach. Whether he is auditing of his relative or
any other person, he should be impartial all the time. Only then, his
examination will be useful.
2.
Confidentiality
Businessman
shares many confidential information to the auditor. It is the rule for auditor;
he should not share it with other. He may only share if as per any law, it is
compulsory.
3.
Skill and Competence
For
solving auditing problem, auditor should use his skills and competence. For
example when a auditor has checked the balance sheet, he saw building value Rs.
40,00,000 but normal rate of building in this area is just Rs. 4,00,000 to Rs.
5,00,000 in same area. So, he should find normal mistake by using his common
sense.
4.
Work Performed by Others
Sometime
auditor has to depend on other auditors and employees for completing his audit
work. So, it is the duty of auditor, he should appoint them as per their
qualification and skill. He should also check the work which is done by other.
Because he is responsible for his advice even he does not check all the
accounts.
5.
Documentation
Auditor
should collect all the documents which is needed for his audit. All document
should be classified and keep in a direction that it can easily be found when
it is needed.
6.
Planning
Auditor
should make the plan of audit. He should complete the audit on the time. For
completing audit on the time, he should make the plan when its ledger accounts
will audit. When company’s final account’s will audit. When company’s stock
will be checked physically. Auditor will
also make the plan about “How to audit ledger accounts and financial
statements?”
7.
Audit Evidence
Audit
evidence is the base of better audit. These evidence are relating to financial
information. If he has to give his opinion on the financial information, he
should obtain its all proofs. These proofs will be bills, vouchers and receipts
of transactions. On this, he can ensure the validity of transactions.
8.
Accounting System and Internal Control
Auditor
should check both accounting system and internal control system before
accepting it as it is. If there is the need of improvement in it, he can bring
it in the notice.
9.
Audit Conclusions and Reporting
Auditor
should conclude in his reports:
- Financial information follows all statutory requirements.
- Financial information are prepared on the basis of accounting policies.
- Audit report must be in written and a clear opinion on the financial information.
10.
Effective Date
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