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Unit 2: Auditing Practices
These standards are all mandatory and are in addition to the following statements on auditing Notes
already issued by the Institute, which are also mandatory.
1. Statements on Auditing Practices.
2. Statements of Qualifications in Auditor’s Report.
3. Statement on the Responsibilities of Joint Auditors.
4. Statement on Payment to Auditors for other Services.
5. Statement on Manufacturing and other Companies (Auditor’s Report) Order, 1988.
Besides the above, the following guidance notes have also been issued by ICAI. These are
recommendations rather than rules.
1. Auditing of Accounts of Liquidators.
2. Maintenance of Unduly Heavy Cash Balances by Companies.
3. Auditor’s Ditties.
4. Independence of Auditors.
5. Surprise Checks.
6. Coordination between the Internal Auditors and Statuary Auditors.
7. Audit Reports and Certificates for Special Purposes.
8. Audit of Accounts of Non-corporate Entities.
9. Reports in Company Prospectus.
10. Control on the Quality of Audit Work.
11. Revision/Rectification of Financial Statements.
12. Audit Engagement Letters.
13. Audit of Inventories, Investments, Debtors, Loans and Advances, Liabilities, Cash and
Bank Balances, Fixed Assets.
14. Audit of Banks.
15. Audit of Miscellaneous Expenditure shown in Balance Sheet.
16. Audit of Accounts of Members of Stock Exchange.
17. Tax Audit under the Income tax Act.
18. Unqualified Auditor’s Report.
A typical unqualified auditors’ report on the accounts of manufacturing, service, trading,
and/or finance company laid before the company at the annual general meeting is set out
below. However, the applicability of individual clauses is based on the activities of the company
in question.
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