What are the steps to be taken by an auditor before commencing audit?
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Steps like
Appointment Letter
resolution passed by the shareholders in the general meeting.
2. Nature Of Audit :-
Auditor should know about the nature of audit. If he does not know the nature of audit then he can not prepare himself for that audit.
3. List Of Books :-
He should obtain a list of all the books of account which are in the use of business.
4. Names Of Officers :-
The auditor should take the list of all the officers with their names duties and powers. He should also get their specimen signatures.
5. Documents :-
He should also get the copy of memorandum and articles of association. He should study them carefully and check that company is running the business according to them or not.
6. Prospectus :-
The auditor should examine the prospectus to know the relevant matters affecting the accounts.
7. Accountancy System :-
The system of accounting which is employed by client must be examined by the auditor before taking the new audit.
8. Minute Book :-
The auditor should get the minute book and read it carefully. He should also take the notes of important decision made by the directors and shareholders in the various meetings.
9. Internal Control System :-
Internal control system prevailing in the business must be studied by the auditor. He should examine the record and observe the actual procedure in operation.
10. 11. Study Of Contracts
12. Case Of Joint Auditors
13. Previous Report Inspection In Case Of Old Company
14. 15. Timing
16. Legal Formalities
17. Historical Background
Appointment Letter
resolution passed by the shareholders in the general meeting.
2. Nature Of Audit :-
Auditor should know about the nature of audit. If he does not know the nature of audit then he can not prepare himself for that audit.
3. List Of Books :-
He should obtain a list of all the books of account which are in the use of business.
4. Names Of Officers :-
The auditor should take the list of all the officers with their names duties and powers. He should also get their specimen signatures.
5. Documents :-
He should also get the copy of memorandum and articles of association. He should study them carefully and check that company is running the business according to them or not.
6. Prospectus :-
The auditor should examine the prospectus to know the relevant matters affecting the accounts.
7. Accountancy System :-
The system of accounting which is employed by client must be examined by the auditor before taking the new audit.
8. Minute Book :-
The auditor should get the minute book and read it carefully. He should also take the notes of important decision made by the directors and shareholders in the various meetings.
9. Internal Control System :-
Internal control system prevailing in the business must be studied by the auditor. He should examine the record and observe the actual procedure in operation.
10. 11. Study Of Contracts
12. Case Of Joint Auditors
13. Previous Report Inspection In Case Of Old Company
14. 15. Timing
16. Legal Formalities
17. Historical Background
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Answer:
List the steps taken before commencing an audit.
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