Auditing and Corporate Governance

REPORT
Submitted By: - Ankita Ola, Anjali Ambawat and Vipasha Verma

Enrollment no. 190010202002,190010202001,190010202020
Class- B.COM(H)
Semester V
Course name- Auditing and Corporate Governance
Course code- FIN 3701
Submitted To: - Dr. Vandana Mehrotra

Associate Professor
GD Goenka University, Gurugram
School of Management
1.ANSWER
Statutory Audit
• A statutory auditor has the right to access all of the company’s financial books, records,
and information. These should be made available to him at all times. He also has the right
to seek any further information he thinks is necessary for his audit
• He has the duty to write an auditor’s report. In this, he must state if the financial
statements of the company give a true and fair representation of their financial position
and affairs.
• If he is writing a qualified report, i.e. the statements are not true and fair, he must clearly
state his reasons for the same.
• In case the auditor uncovers any fraud during his audit he must report it to the Central
Government authorities.
Internal Audit
For most organizations, the appointment of an internal auditor is completely mandatory.
Internal audit is a function that, even though operating independently from other departments
and involves reporting directly to the audit committee, remains within an organization i.e. the
company’s employees.
Internal audits involve performing audits of both financial and non-financial nature within a wide
of areas of operation in business.
Much of the work performed by a company’s internal audit function can overlap with the work
conducted by the external auditor, specifically in areas dealing with the assessment of control
processes. It is likely that in carrying out detailed work evaluating and reviewing the company’s
internal control framework internal audit perform procedures on financial controls relevant to
the external audit. As such, the external auditor, rather than duplicating these procedures, may
be able to place reliance on the work carried out by the internal auditor.
2.ANSWER
Audit Plan
Audit planning is a vital area of the audit primarily conducted at the beginning of audit process
to ensure that appropriate attention is devoted to important areas, potential problems are
promptly identified, work is completed expeditiously and work is properly coordinated.
Audit Process
Step 1: Planning
The auditor will review prior audits in your area and professional literature. The auditor will also
research applicable policies and statutes and prepare a basic audit program to follow.
Step 2: Notification
The Office of Internal Audit Services will notify the appropriate department or department
personnel regarding the upcoming audit and its purpose, at which time an opening meeting will
be scheduled.
Step 3: Opening Meeting
This meeting will include management and any administrative personnel involved in the audit.
The audit’s purpose and objective will be discussed as well as the audit program.
Step 4: Fieldwork
This step includes the testing to be performed as well as interviews with appropriate department
personnel.
Step 5: Report Drafting

After the fieldwork is completed, a report is drafted. The report includes such areas as the
objective and scope of the audit, relevant background, for correction or improvement.
Step 6: Management Response
Management responses should include their action plan for correction.
Step 7: Closing Meeting
This meeting is held with department management. The audit report and management responses
will be reviewed and discussed.
Step 8: Final Audit Report Distribution
After the closing meeting, the final audit report with management responses is distributed to
department personnel involved in the audit, the President, Provost, and Chief Financial Officer,
and CWRU’s external accounting firm.
Step 9: Follow-up
Approximately six months after the audit report is issued, the Office of Internal Audit Services
will perform a follow-up review. The purpose of this review is to conclude whether or not the
corrective actions were implemented.
3.ANSWER
Meta cube is a software engineering services company that has deep experience in developing
enterprise level products and applications for a wide spectrum of domains including global trade
management, supply chain analytics, manufacturing analytics, business continuity planning,
CRM, publishing and eCommerce. The common denominator in all our services has been our total
customer focus, ensuring that each engagement is a success and provides the desired value to
the customer.
The internal audit used by the meta cube is Audit & Advisory Services which is basically
committed to assisting all levels of management and staff in the achievement of UCSF's goals and
objectives by striving to provide a positive impact on the efficiency and effectiveness of
operations.
Frome the point of view of meta tube Internal control is a process, effected by an entity’s board
of directors, management and other personnel, designed to provide reasonable assurance:
• That information is reliable, accurate and timely

• Of compliance with applicable laws, regulations, contracts, policies and procedures
• Of the reliability of financial reporting
Internal controls are basically intended to prevent errors and irregularities, identify problems and
ensure that corrective action is taken. In many cases, process owners within your department
perform controls and interact with the control structure on a daily basis, sometimes without even
realizing it because controls are built into operations of meta tube organisation.
Internal controls used by the meta tube are established to further strengthen:
• The reliability and integrity of information

• Compliance with policies, plans, procedures, laws and regulations
• The safeguarding of assets etc.
Internal controls of Meta Cube department:

Control activities within the department include the following:
• Implementing segregation of duties where duties are divided (segregated) among

different people, to reduce the risk of error or inappropriate actions. No one person has
control over all aspects of any financial transaction.
• Making sure transactions are authorized by a person delegated approval authority when
the transactions are consistent with policy and funds are available.
• Ensuring records are routinely reviewed and reconciled, by someone other than the
preparer or transactor, to determine that transactions have been properly processed.
• Making certain that equipment, inventories, cash and other property

are secured physically, counted periodically and compared with item descriptions shown
on control records etc.
4.ANSWER
The outside, independent auditor is engaged to render an opinion on whether a company’s
financial statements are presented fairly, in all material respects, in accordance with financial
reporting framework. An audit conducted in accordance with GAAS and relevant ethical
requirements enables the auditor to form that opinion.
Filing tax returns is a complicated procedure, and many filers make mistakes. Auditors often
ignore minor errors and might let you off with a 20 percent penalty, but if they find you guilty
of deliberate tax evasion, you might have to pay penalties of up to 75 percent.
To form the opinion, the auditor gathers appropriate and sufficient evidence and observes, tests,
compares and confirms until gaining reasonable assurance. The auditor then forms an opinion of
whether the financial statements are free of material misstatement, whether due to fraud or
error.
Some of the more important auditing procedures include:
• Inquiring of management and others to gain an understanding of the organization itself,

its operations, financial reporting, and known fraud or error
• Evaluating and understanding the internal control system
• Testing documentation supporting account balances or classes of transactions
• Observing the physical inventory count
• Confirming accounts receivable and other accounts with a third party
found "guilty" in an audit means the IRS examiner believes you owe additional taxes, although
you have the right to dispute the findings. In some cases, your actions could be deemed as
fraudulent.
Within 30 days of the conclusion of your audit, you will receive written notification of the IRS
examiner's findings. It is possible that the audit results could indicate that you owe no
additional taxes and that your return is accepted as it is.
At the completion of the audit, the auditor may also offer objective advice for improving financial
reporting and internal controls to maximize a company’s performance and efficiency.

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REPORT

Submitted By: - Ankita Ola, Anjali Ambawat and Vipasha Verma

Submitted To: - Dr. Vandana Mehrotra

Step 5: Report Drafting

• That information is reliable, accurate and timely

• The reliability and integrity of information

Internal controls of Meta Cube department:

• Implementing segregation of duties where duties are divided (segregated) among

• Making certain that equipment, inventories, cash and other property

• Inquiring of management and others to gain an understanding of the organization itself,

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