PRINCIPLES OF AUDITING

THANUS PRABHA.M.S
III B.COM – B
SEMINAR
TOPIC:AUDIT NOTEBOOK

Dr. NGPASC
COIMBATORE | INDIA
 AUDIT NOTEBOOK

MEANING

CONTENTS

IMPORTANCE

ADVANTAGES

DISADVANTAGES

Dr. NGPASC
COIMBATORE | INDIA
 AUDIT NOTEBOOK

MEANING:

Audit Note Book is a register maintained by the audit staff to record important
points observed, errors, doubtful queries, explanations and clarifications to be
received from the clients. It also contains definite information regarding the
day-to-day work performed by the audit clerks. It is of immense help to the
auditor in preparing audit report.

Dr. NGPASC
COIMBATORE | INDIA
 IMPORTANCE
1. An auditor can use it as evidence when a charge of negligence is registered against the
auditor.
2. It facilitates the auditor to know the actual volume of work performed by his/her audit
staff.
3. It helps in future reference and acts as a guide to draft audit programme in future, as the
points noted down in the notebook highlight the loopholes in the accounting system of the
client which must be considered.
4. It also helps the auditor for correlating the audit work if the related assistant is not present
or the work is halted for the short term.
5. It also records different queries that came up during the course of the audit and their state of
disposal.
6. Further, with regard to disposed queries, explanation received and evidence encountered,
would be recorded and those queries which are not disposed of would be noted for the
purpose of follow up.

Dr. NGPASC
COIMBATORE | INDIA
 CONTENTS

• List of account books that the client maintains.

• Details of main officers, their powers, duties, and responsibilities.
• Method of accounting adopted by the firm
• Technical jargon used in business
• Points that need more explanation.
• Particulars of vouchers that are missing and duplicates are to be gathered.
• Commencement and completion date of the audit
• Any mistake, irregularity, or error identified during the course of the audit.
• Total or balances of different books of accounts.

Dr. NGPASC
COIMBATORE | INDIA
 CONTENTS
• Copy of audit programme.
• Accounting methods, internal control and internal check system in
operation.
• Routine queries like missing receipts and vouchers etc.
• Details of errors and frauds discovered during the course of audit.
• Points to be included in audit report.
• Details of all important information to be used as reference for
future audits.

Dr. NGPASC
COIMBATORE | INDIA
 ADVANTAGES
1. Facilitates Audit Work: It facilitates the work of an auditor as all important details about
the audit are recorded in the note book which the audit clerk cannot remember everything
at all the time. It helps in remembering and recalling the important matters relating to the
audit work.
2. Preparation of Audit Report: Audit note book helps in providing required data for
preparing the audit report. An auditor examines the audit note book before preparing and
finalizing the audit report.
3. Serves as Documentary Evidence: Audit note book serves as a documentary evidence in
the court of law when a suit is filed against the auditor for his negligence.
4. Serves as a Guide: When a audit assistant is changed before the completion of audit
work, audit note book serves as a guide in completion of balance work. It also acts as a guide
for carrying on subsequent audits.
5. Evaluating Work of Audit Staff: It helps to assess the work performed by the audit staff
and helps in evaluating their level of efficiency.

Dr. NGPASC
COIMBATORE | INDIA
 DISADVANTAGES

• 1. Very often, it creates misunderstanding between the client

staff and the audit staff.

• 2. If it is not properly and carefully prepared it cannot be used

as evidence against the auditor for negligence.

• 3. It develops a fault finding attitude in the minds of the staff

of the audit.

• 4. Audit staff has to depend too much upon the client’s staff for
its preparation.
Dr. NGPASC
COIMBATORE | INDIA
Dr. NGPASC
COIMBATORE | INDIA