Standards on Auditing - A brief introduction

 Audit in itself is the discipline that is not standalone , but  encompasses  gaining knowledge in all field relating to Costing , Applicable Legal framework , Financial Reporting framework , Taxation framework as well as the Management framework and that is something which attaches paramount importance to the need of Auditing . 

Institute of Chartered Accountants of India  is the regulatory body that governs and lays down the principles , process and procedures of Auditing in India . In order to ensure Governance and regulations for Conducting Audit , the ICAI of India has formed a body - AASB     - The Auditing and Assurance Standards Board which comprises of representatives of various segments of the society and interest groups , such as , regulators , industry and academics -  that is entrusted with the responsibility of framing and  reviewing the audit practices in India . The Body has laid down Auditing and Assurance Standards collectively known as Engagement Standards and Quality control standards which are broadly categorized as under :-

        Over and above the standards , ICAI has also laid down several Guidance Notes , which are though recommendary in nature but are quite essential for effective results to be achieved . 

 

Meaning of Audit

 

Audit refers to the independent examination of the subject matter to ensure adherence to the purpose for  the subject is created or established or is  developed . Audit is a proactive procedure undertaken to relieve the concerned from the aftermath that would be inevitable had the adverse event occurred . 

        Usually people mistake Audit to mean just the financial Audit but it can actually be done before everything  crucial for the success of an entity , be it the technological audit , be it the Operational Audit , the Management Audit  , the Information System Audit and many more alike.

    The most crucial of all is the Financial Audit which is  the independent examination of Financial Statements of Entities to confirm the accuracy and authenticity of Accounts . It not only safeguards the company from the deviations from the planned course of action but also is important for all the stakeholders involved . 

         As per the Institute of Chartered Accountants of India :- Audit refers to " An  independent examination of financial information of any entity , whether profit oriented or not , and irrespective of its size or legal form , when such an examination is conducted to express an opinion thereon "