Professional Documents
Culture Documents
It is a document produced by the companies annually. It is designed to portray a true and fair view of the companys annual performance, with audited financial statements prepared in accordance with the company law and other regulatory requirements and also containing other nonfinancial information.
A true and fair view is one where accounts reflect what has happened and do not mislead the readers
The accounts must be prepared in accordance with relevant accounting standards, gaap and requirements of the statutory laws.
b. Subsidiary Statements - such as statement showing changes in shareholders funds, working capital, assets position, Funds movements, etc
C. Explanatory Material - accounting policies, Notes/Schedules to the accounts, etc.
Auditors Report
Auditors are the independent accountants who are registered to carry out the task of auditing. Auditing refers to a systematic examination of the accounts of a business enterprise to ascertain whether they are prepared in accordance with statutory requirements and disclose true and fair view.
They have to make a brief report which should be mandatorily included in the annual report of the company.
Objectives Of Auditing
I. Primary Objective : Reporting to Shareholders: True and Fair View exists when 1. The financial statements are as per the books of accounts. 2. Assets and Liabilities are properly valued 3. Proper distinction is made between Capital and Revenue expenditure. 4. Adequate provision is made for depreciation and actual liabilities. 5. Contingent liabilities are properly disclosed 6. Items of unusual nature are disclosed separately. II. Secondary Objectives (A) Detection of Errors (B) Detection of Frauds (a) Misappropriation of cash (b) Misappropriation of Goods (C) Misappropriation of Goods (i) Window Dressing (ii) Creation of Secret Reserve
Types of Audits
I. Statutory Audit
Schedule VI of the Companies Act, 1956 deals with preparation of presentation of the financial statements.
Part I : Balance sheets and its contents Horizontal and Vertical formats Part II : Profit and loss account
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