1.

Mgt Resp for business Achieve co obj Assess busi risk Safeguard co assets Proper A/c (P&P) FS dev (L&R Comply) L&R compliance 2. Mgt resp a/p co act Safeguard assets Books & record keeping Prepare & Present (P&P) FS 3. ICS procedure for safeguard assets Safekeeping docs & titles Setting autho limit Take procedure for PDC of FEAR 4. Books & records Cash RP book Sale-Purchase Book Asset-Liability Book Utilization book/ledgers 5 FS dev requirements A/c Policy PJ & Prof. Estimations Comply with BSA GC basis 6 Compliance L&R needed Money laundering Health & Safety Public liability Employers likability Income tax vat & payroll 7 Auditors Resp General resp Statutory resp 8 General Resp of Auditor Standard TOR L&R compliance QC 9 External Auditors resp as per Co act FS as per Co act Independent openion Co act compliance of FS 10 Auditor is not resp for D&P of AICS (Design & Performance) Mgt of A/c. Records Mgt info sys FS dev (P&P) PDC FEAR (Exception to his scope) L&R Compliance (Exception to adtr limit)

Q. Responsible Area of Auditor Business risk Fraud & Error non COmpliance of L&R A/c Policy 11 Additional services given by auditor Assisting Maintenance of A/c records Assisting Co with P&P of Mgt info Preparing FS of Co Preparing CO Tax Return 12 Guide line for ICS regarding Error Adtr is resp for PDC of MM due to Error in FS Mgt is resp for ICS D&P Adtr is resp for assessing ICS capacity for PDC of FEAR Adtr is resp for reporing & commu to Mgt if MM & MW is found in AICS (MW = Mater ial Weakness) & Carry out additional TOD 13 Types of MM arises from fraud Fraudualnt FR Asset misappropriation 14 Mgt Resp for Fraud Primary resp for PDC of F&E is for - Mgt of Entity -Govns of Entity 15 Actions can be taken by Mgt for Fraud Design ITACOL Practice ITACOL Exercise ITACOL Establish AICS 16 Auditors Resp for Fraud Dev Reasonable assurance free from MM caused by F&E 17 Guide line given at BSA 240 for auditors MR are true Prof. Skepticism 18 FS susceptibility of F&E considerations Weak ICS Mgt Earnings Internal & External Factors Weak oversee/ Ctrl Change in mgt / employee life style need for Prof. Sekpticism Audit Procedure Fraud allegations Mgt override of Ctrl (MOC) 19 What may let to limitation of scope If auditor get MM which incurred for FEAR then MR is no longer reliable & then S cope Limitation developed 20 Adtr Resp for Fraudulent WMR -Adtr will take WMR(about PDC of AICS) -Adtr will take WMR (about known & suspect fraud) -Adtr will take WMR (about His Own Findings that have MM that can affect FS)

21 Diff types of Fraud & level of its level of discussion Mgt Level: Discover fraud Suspect fraud Substantial Error Doubt on integrity of director Shareholder Level: FEAR if affect T&F view of FS Thirt Parties: Breach Public Interest 22 Resp for L&R compliance Resp for L&R compliance - Mgt Resp for PDC of L&R compliance -Adtr Resp for MM dealing caused (by L&R non-compliance) 23 L&R categories relevant to FSA -Direct impact L&R -Co Operation Legal Frame 24 Areas of Law that effect business Employee law Tax & VAT law Health & Safety Law 25 RAP for L&R compliance Make Inquiries Inspect Correspondence (Relevant licensing or regulatory bodies) Ask govns on notice of non-compliance 26 Diff level of reporting non compliance Management: L&R for PDC Directors Integrity Shareholder: T&F view Breached Third Parties: Statutory duty Public Interest 27 Audit work stages for related party Divided in 3 main stages - Planning stage - Detailed work stage - Review stage 28 Task at Testing Stage Auditor musk know- Who is resp for RPT - RPT is corret & complete (C&C) - Cross cast BOA with RPT 29 AP's for RPT as per BAS 550 Test of TAD Review unusual OPEC & CAPEX Tr. Review Rev & Payable Tr. Review Inv Tr.

30 AP's for RPT for auditors Discuss Inspect Confirm Obtain Corroborating AE 31 Task at review stage of RPT's - Take WMR from Director or HOO (Head of Operation) - Review AE with WMR 32 Money Laundering Purposes Disguise Origin of Fraud Enable Illicit Funds 33 Money Laundering ways / includes Using Acquiring Retaining Controlling Concealing Discuising Converting Transferring Removing from COuntry 34 Auditors Responsibility for Money Laundering Case -Pass Letter of weakness & address all suspected money laundering cases 35 Source of Expectation gap from users point Preparation of FS Fraud Finding Checking all TAD Adtr FS is correct 36 Steps to reduce expectation gap Expanding Adt Report AEL Directors Resp Audit committee 37 Main reasons of expection of gap Co failure Committed fruad Genuine Mistake Adtr failure to detect 38 Reason of Auditor's Failure Assess Adt risk properly Respond adt risk properly Recognize Adt risk properly (when threat remains) Locate Situation beyond auding area 39 Auditors Wrong stages Planning stage Performance stage Conclusion stage 40 When auditor may fail to detect FEAR

Immaterial effect Still true & fair look DR problem