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CHAPTER - I

INTRODUCTION
1.1 INTRODUCTION ABOUT THE TRAINING
This training is a job oriented process which aim to develop special skills related to
the job. Through internship process effort is made to increase practical skill with theoretical
knowledge which student got in formal educational institute.
The period of training varies depending upon the nature of the job, size of the
organizations etc. For instance fresh engineering graduates or diploma holders are moved
from workshop to workshop to work with the seniors, before they are placed on a particular
job. This period varies from 10 days.
An internship is an agreement between intern and the organization for a fixed period
of time, where interns agree to work for them and they agree to mentor and teach them many
companies go on to hire their successful intern’s for full time employment.
1.2 ABOUT THE AUDITING
Usually origin of audit is traced to the middle ages, but infect the introduction of large
scale production gave birth to audit, after the industrial revolution during the 18th century.
In the beginning there was small-scale production was smaller; the technology was
simply and has a low capital. But with the passage of time, these things were all improved
and enlarged and thus proper checking of them became very much necessary in the audit.
Auditing Procedure
An audit planning i.e. an audit plans relating to extent and scope of an audit.
Developing the audit programme i.e. the procedure that are needed to implement the audit
plan.
 Examination of the accounting system
 Evaluation of internal controls
 Simple checking of vouchers
 Verification of assets and liabilities
 Submission of auditor reports
Chartered Accountant firms render various types of services to their clients.
According to the types and nature of the clients. The nature of service also differs from firm
to firm, which includes corporate services, feasibility report, professional consultancy etc.
The firm is dealing with;
 Auditing

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 Taxation
 Management consultancy service
 Tax consultancy
 Corporate services.
TECHNIQUES OF AUDITING
Following are the common techniques of auditing
 Checking of posting and casting.
 Physical verification of assets.
 Verification and examination of transactions with available evidences.
 Scrutiny of the books of accounts,
 Checking of various calculations.
 Checking of carried forward balances in next year.
 Checking of Bank reconciliation statements.
1.3 OBJECTIVES OF THE STUDY
 To get a practical knowledge about the auditing.
 To know how the auditor will audit the accounts.
 To identify the audit process.
 To learn more than the theoretical knowledge.
 To learn book keeping practices of different companies.

1.4 METHODS OF TRAINING

 To promote my personal knowledge and professional preparation for future. To


properly integrate my theoretical knowledge and practical work.
 To know how the auditor will audit the accounts.
 To know about detect error and fraud in accounts.
 To get a practical knowledge about the auditing.

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CHAPTER – II
AUDITOR PROFILE
2.1 INTRODUCTION
CA.P.GIRIRAJ Chartered Accountant was established in the year 1993. It is a
leading chartered Accountancy firm rendering comprehensive professional services which
include audit, management consultancy, tax consultancy, accounting services, manpower
management, secretarial services etc.
CA.P.GIRIRAJ Chartered Accountant is a professionally managed firm. The team
consists of distinguished chartered accountants, corporate financial advisors and tax
consultants. The firm represents a combination of specialized skills, which are geared to
offers sound financial advice and personalized proactive services. Those associated with the
firm have regular interaction with industry and other professionals which enables the firm to
keep pace with contemporary developments and to meet the needs of its clients.

2.2 PROFILE OF THE AUDITOR

Name of the auditor : CA.P.GIRIRAJ., FCA

Address : CA.P.GIRIRAJ, Chartered accountant

17/23, Alagappa lay-out,


Pollachi-642001.

Contact No : 04259-226512

Year of establishment : 1993

No of employees : 6

Type of company : Sole proprietor

Area of Services : Auditing,Taxation,Professional consultancy,

Corporate services,Financial Analysis.

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2.3 ORGANIZATION STRUCTURE

A hierarchy is an arrangement of items (objects, names, values, categories, etc.) in


which the items are represented as being "above," "below," or "at the same level as" one
another and with only one "neighbour" above and below each level. These classifications
are made with regard to rank, importance, seniority, power status, or authority. A hierarchy
of power is called a power structure.
 Partners
 Directors
 Senior Managers
 Managers
 Supervisors
 Senior Trainee Students
 Junior Trainees
Partners are often the founders of the firms. Most of the firms’ names are associated
with the names of partners. They are basically the main parties who issue and sign any
report (specifically audit report) on behalf of the firm. Partners mostly communicate with
the Senior Managers. In other words, the progress of any report and any inquiry is made
from the Senior Managers and hierarchal structure is strictly followed to avoid any
disruption.
Managers are inquired of by Senior Managers and mostly manager manage audit
field works etc and after field work managers with cooperation of senior managers makes
and finalize any audit report to be issued. Senior Manager is a qualified Chartered
accountant having more than 10 year working experience.
Field work and information collection and implementation of policies by adopting
changes in rules & regulations is the main responsibility of supervisors and trainees. They
use different kind of techniques for error and fraud detection.

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ORGANIZATION CHART

CA.P.GIRIRAJ
Chartered Accountant

Manager Audit Manager Manager Manager


Consultancy Taxation Corporate
services

Corporate
Professional Financial services
Consultancy analysis

Auditing

Senior Assistant Junior


audit audit audit

Senior Junior
Taxation Taxation

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CHAPTER – III

WORKING AND FUNCTIONS

3.1 INTRODUCTION
All the offices constitute different number of departments who basically handle their
respective functions. The major departments include.

DEPARTMENT CHART

General Manager

Department

Audit and assurance Tax and corporate Computer department


department department

HR department Financial Financial


consultancy Performance
Improvement

Financial Accounting
Accounting Valuation

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3.1.1 Audit and Assurance Department:
Firm provides audit and assurance services to wide range of clients which include
performing audits of financial statements of limited companies, NGOs and partnerships.
Firm also performs special assignments which include management audits, internal audits
and investigations. Audit focuses on business issues and the matters that can impact on the
financial statements, whilst also retaining the basic audit procedures that test the
information contained in the financial statements. Services are aimed to comply with the
legal requirements as defined under the various laws and regulations in India. In doing so
firm not only identify the non-compliances but also assists clients in its rectification,
designing remedial measures and provides guidance to adhere with the laws and
regulations. Firm always endeavour to meet reporting deadlines as set out by the laws and
regulations or as mutually agreed with clients, without compromising the professional, legal
and ethical requirements.
Firm emphasis on delivering high quality services to clients, adding value to their
business through identification of existing and potential control risks and suggesting best
possible measures in the given circumstances. Firm always place priority in deploying audit
teams to clients who are well equipped with the specific industry knowledge, experience
and are professionally sound.
3.1.2 Tax & Corporate Department:
Firm delivers taxation services to clients and assists them in obtaining optimal tax
benefits available under the laws. Firm also assist clients to comply with the tax rules and
regulations and always keep them updated with the latest developments and amendments.
Tax personnel are qualified professionals, experienced and knowledgeable. We maintain a
comprehensive tax library which always provides ready references and timely solution in
complex situations. Firm provides a comprehensive range of tax services which includes;
 Preparation and submission of annual tax returns
 Compliance services
 Tax advisory services
 Representation and litigation with tax authorities
 Personal income tax services

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In CA.P.GIRIRAJ same staff is handling with tax matters as well as corporate
sector. While in corporate firm provides different kinds of services relating to corporate
sector from incorporation to winding up of a Company.

3.1.3 Computer department:


Department handles the computer related matters and assists other departments in
working properly and efficiently. Department deals with online filing of returns of income
for tax department and finalize audit reports in proper format in a presentable manner. It
deals with networking of computers in office and all other problems which may be faced by
computer users time to time.
3.1.4 Correspondence Department:
It handles with all the correspondence of the firm by sending the solicited and
unsolicited information from time to time. Effectively and efficiently manage the day-to-
day operations of the Correspondence. Interact with clients to resolve policy and customer
issues. Identify trends and remove obstacles in Statement production and delivery by
properly maintaining record of all communication for future reference.
3.1.5 HR Department:
This department is mainly concerned with the recruitment, hiring/firing of the firm
and this department presents the timely reports on effective utilization of the resources by
the firm. A purpose of the human resource is to keep the trained employees and recruit new
energetic staff to work. Another purpose of this department is to provide a good working
environment for staff and try to make by facilitating them and arranging some recreational
activities for them. HR knows the real worth of its employees so cares for them and
motivate them to work more efficiently and diligently.
The hierarchy adopted by CA.P.GIRIRAJ is in accordance with the legal structure a
CA firm shall have. Although the ICAI rules permit of not having the supervisors and does
not make it mandatory having senior manager and manager, yet this goes as additional
benefit for the firm of having such an extensive hierarchy.

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3.1.6 Financial consultancy:
Finance professionals provide comprehensive financial advice and execution
expertise, encompassing mergers, restructurings, private placements, privatizations and
equity capital markets to clients ranging from corporations and financial institutions; adding
value for our clients throughout all stages of the process. Financial Consulting services
include the following:
 Financial Performance Improvement
 Financial Accounting
 Accounting Valuation
3.1.7 Financial Performance Improvement:
It supports CEO’s, CFO’s, Controller and Treasurers to optimize the structure of their
Finance functions thus improving contribution to business. The structure our support to
ensure that Finance addresses the challenges of achieving appropriate standards of control,
efficient back office opportunities and support to the business through insight and challenge.
Recently, the emphasis of Finance has been control and efficiency characterized by a heavy
focus on compliance delivered through streamlined back office models.
3.1.8 Financial Accounting:
With the advancement in International Financial Reporting Standards (IFRS) for
many of our clients, financial accounting has become a lot more complicated. And if the past
few years are any guide, the future holds more regulations, new requirements, and an
increasing compliance burden.
3.1.9 Accounting Valuation:
International Financial Reporting Standards (IFRS) introduce significant changes to
the way that accounts must be prepared and presented, requiring a wider range of assets to be
valued on an annual basis.
 Goodwill is now tested for impairment annually, and is marked down according to
the conclusions of that annual process.
 These considerable changes call for specialist valuation services that both understand
the specific accounting implications and the wider commercial context in which those
accounting valuations will apply.
 CA.P.Giriraj valuation services draw on considerable technical and financial
specialization, as well being able to access accounting specialists to deliver integrated
advice to our clients.

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3.2 FUNCTIONS
TAXATION:
The firm provides tax services to their clients. Some firms are specially deals in tax.
The client who needs the services regarding to tax pay fee for such services and the auditor
gives him a very useful service by the tax returns.

PREPARATION OF AUDIT PROGRAM


An audit program was prepared by our seniors, with due care and skill. It was
decided to conduct the audit under the supervision of a senior. During the conduct of audit,
some notes were prepared like:
Audit Review Notes:
To note the points that needs further discussion with the management.
Audit Queries:
To not all those vouchers that remains insufficiently vouched. A complete record as to
how they were cleared and all those, which remained unclear and reported to management, is
maintained.
Important Balances:
Notes of important closing balances particularly in respect of cash and bank accounts
and stock.
Compliance testing:
In this part it is checked that the business comply with all its rules and regulations or
not. For this the article and memorandum of association is checked. The articles are checked
to see the general business practices and the commencement of the annual report and
declaration of dividend and bonus.
Checking of Books Accounts:
When the audit work starts first the books of accounts are checked for errors which
may be due to wrong entries, omission of transaction, wrong total, wrong carry and brought
forward etc. The checking of books of accounts may or may not include detail checking, it
may involve test checking. It depends upon the control system involved.

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3.3 OPERATION OF AUDIT
The audit was operated / conducted with the help of following techniques.
Vouching:
In vouching every transaction is checked with it documentary evidence. Documentary
evidence includes vouchers, invoices, and goods inward and outward notes, cash memos and
receipts. It is also checked that the transaction is authorized by a proper person having powers
to do so.
Verification:
When vouching is complete then the verification of assets and liabilities takes place.
Assets of the firm are verified by checking that if the assets are held by others then a letter is
written to them to verify their presence and their title. For confirmation of major debtors a
letter is written to them to confirm the balance due from them.
Ticking:
During the checking of various books, the entries that were checked were
marked/ticked with red pen indicating that the entry has been examined for certain purpose.
Variously shaped marks were used to denote checking of additions; postings carry forwards,
balances etc.
Posting Check:
Then it was checked whether the transactions are correctly and accurately posted to
ledger or not. Special care in checking posting to personal ledgers in needed as to names and
titles of accounts; otherwise a wrong posting may remain undetected.
Cross Checking:
It is the comparison of entries in two or more books or of an entry in a book with its
supporting evidence or voucher. My seniors assisted me in this step. Accuracy of cross
checking plays a vital role in the process of auditing. Therefore, it should be made with due
care.
Analytical Procedure:
After the end of the audit analytical procedure is adopted in order to confirm the
accuracy and correctness of the results obtained from above procedures, Profit and Loss
Account and Balance Sheet. In analytical procedure results are compared with prior period
results, ratios, expected results and industrial information. Any major difference is looked
into.

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3.4 OVERVIEW OF TALLY ERP 9

Journal entry
Journal Vouchers are used to adjust the debit and credit amounts without involving
the cash or bank accounts. Hence, they are referred to as adjustment entries.
Creating a Journal Entry
Journal entries are usually used for finalization of accounts.
To pass a Journal Voucher,
Go to Gateway of Tally > Accounting Vouchers
· Click on F7: Journal on the Button Bar or press F7.
For example, there may be entries made for interest accrued or interest due. If you have to
receive Interest from a party, the same can be entered using Journal Voucher.
1. Debit the Party
2. Credit the Interest Receivable Account
The Journal entry is displayed as shown:

SPECIAL KEYS FOR VOUCHER NARRATION FIELD:


 ALT+R: Recalls the Last narration saved for the first ledger in the voucher, irrespective
of the voucher type.
 CTRL+R: Recalls the Last narration saved for a specific voucher type, irrespective of the
ledger.

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Allowing Cash Accounts in Journals
Journals are adjustment entries, which do not involve Cash account and Bank account.
However in exceptional cases where the user would like to account Journal entries involving
Cash/Bank Account, Tally.ERP 9 has the flexibility of passing such entries by enabling the
option under F12 configuration.
To enable Cash Accounts in Journal voucher,
· Set Allow Cash Accounts in Journals to Yes in F12: Configure (Voucher Entry
Configuration).

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CHAPTER - IV
FINDINGS, SUGGESTIONS AND CONCLUSION
4.1 FINDINGS
 Employees need to ensure they are coding expenses to the proper general ledger
account.
 All aspects of faculty or service operations should be clearly documented in an up-to-
date procedures manual.
 Respondents confirmed that large audit firms cannot render auditing better than small
audit firms.
 Only very exceptionally should expenses be allocated to the Miscellaneous General
Ledger expense account.
 The chartered accountants perceived that rotation can enhance auditor independence.

4.2 SUGGESTIONS
 They have good opportunity to introduce the ISO standards training program which
no other firm is giving to customer.
 Try to adopt new technologies that their competitors are not using.
 Make a network that allows its customers to negotiate with them easily.
 In comparison of CA.P.GIRIRAJ auditing office with its competitors has an edge to
make an accurate and error free report.
 The local economy continues to be strong and we believe our typical clients will
continue to flourish.

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4.3 CONCLUSION
CA.P.GIRIRAJ is overall one of the profit making and reputed firm of Pollachi. The
organization since its very first day is devoted to providing quality services. The detailed
and through review of work and clients’ trust shows the perfection with which it is
working.
The firm has earned a distinction of being placed in the category 'A' in the list of panel
of auditors maintained by State Bank of India. Moreover only these 'A' category firms can
audit of listed companies.
The Institute of Chartered Accountants of India has also carried out the Quality Control
Review and has issued satisfactory QCR report stating that the firm has conducted the
audits of the clients in accordance with International Standards on Auditing.

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