University of Mumbai, Maharashtra (Mumbai University), Finance Semester 4, Auditing Syllabus

Unit - 1 Introduction to Auditing
• Basics – Financial Statements, Users of Information, Definition of Auditing,
Objectives of Auditing – Primary and Secondary, Expression of opinion,
Detection of Frauds and Errors, Inherent limitations of Audit. Difference
between Accounting and Auditing, Investigation and Auditing.
• Errors & Frauds – Definitions, Reasons and Circumstances, Types of Error –
Commission, Omission, Compensating error. Types of frauds, Risk of fraud and
Error in Audit, Auditors Duties and Responsibilities in case of fraud
• Principles of Audit – Integrity, Objectivity, Independence, Skills, Competence,
Work performed by others, Documentation, Planning, Audi Evidence,
Accounting System and Internal Control, Audit Conclusions and Reporting
• Types of Audit – Meaning, Advantages, Disadvantages of Balance sheet Audit,
Interim Audit, Continuous Audit, Concurrent Audit and Annual Audit

Unit - 2 Audit Planning, Procedures and Documentation
• Audit Planning – Meaning, Objectives, Factors to be considered, Sources of
obtaining information, Discussion with Client, Overall Audit Approach.
• Audit Program – Meaning, Factors, Advantages and Disadvantages,
Overcoming Disadvantages, Methods of Work , Instruction before
commencing Work, Overall Audit Approach
• Audit Working Papers - Meaning, importance, Factors determining Form and
Contents, Main Functions / Importance, Features, Contents of Permanent
Audit File, Temporary Audit File, Ownership, Custody, Access of Other Parties
to Audit Working Papers, Auditors Lien on Working Papers, Auditors Lien on
Client's Books
• Audit Notebook – Meaning, structure, Contents, General Information, Current
Information, Importance

Unit - 3 Auditing Techniques and Internal Audit Introduction
• Test Check - Test Checking Vs Routing Checking, test Check meaning, features,
factors to be considered, when Test Checks can be used, advantages
disadvantages precautions.
• Audit Sampling - Audit Sampling, meaning, purpose, factors in determining
sample size -Sampling Risk, Tolerable Error and expected error, methods of
selecting Sample Items Evaluation of Sample Results auditors Liability in
conducting audit based on Sample
• Internal Control - Meaning and purpose, review of internal control,
advantages, auditors duties, review of internal control, Inherent Limitations of
Internal control, internal control samples for sales and debtors, purchases and
creditors, wages and salaries. Internal Checks Vs Internal Control, Internal
Checks Vs Test Checks
• Internal Audit - Meaning, basic principles of establishing Internal audit,
objectives, evaluation of internal Audit by statutory auditor, usefulness of
Internal Audit, Internal Audit Vs External Audit,, Internal Checks Vs Internal
Audit
Unit - 4 Auditing Techniques: Vouching &Verification
• Audit of Income - Cash Sales, Sales on Approval, Consignment Sales, Sales
Returns Recovery of Bad Debts written off, Rental Receipts, Interest and
Dividends Received Royalties Received
• Audit of Expenditure - Purchases, Purchase Returns, Salaries and Wages,
Rent, Insurance Premium, Telephone expense Postage and Courier, Petty Cash
Expenses, Travelling Commission Advertisement, Interest Expense
• Audit of Assets Book Debts / Debtors, Stocks -Auditors General Duties;
Patterns, Dies and Loose Tools, Spare Parts, Empties and Containers Quoted
Investments and Unquoted Investment Trade Marks / Copyrights Patents
Know-How Plant and Machinery Land and Buildings Furniture and Fixtures
• Audit of Liabilities - Outstanding Expenses, Bills Payable Secured loans
Unsecured Loans, Contingent Liabilities