A Summer Internship Project Report

on
“A Study of Audit Procedures”

At
SKPN & ASSOCIATE LLP CHINCHWAD
By
Pranjali Ananda More
MBA-II (Finance)
Batch (2022-24)

Under the guidance of

Dr.Vinayak Shitole

Submitted to
Savitribai Phule Pune University

In partial fulfilment of the requirement for the award of Degree of

Master in Business Administration (M.B.A)

Ramachandran International Institute of Management.

Behind Crystal Honda Showroom, Uttam Nagar, Bhunde Vasti, Bavdhan, Pune,
Maharashtra,411021.

1
 DECLARATION
I, the undersigned, hereby declare that the Project Report titled “A Study of Audit Procedures
at SKPN & Associates”, in partial fulfilment of the requirement for the award of degree of
Master of Business Administration is my original work and the conclusions drawn therein are
based on the material collected by myself.

Place: Pune

Date:

Pranjali Aananda More

Name & sign of Research Student

2
 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to Dr.Vinayak Shitole my internal

project guide for providing me steamed guidelines since inception, till the
completion of the project. His continuous guidance during the course of project
helped me in channelizing my efforts, quite appropriately.

I am highly grateful to Mr. ASHOK CHANDNSHIV , who gave a golden

opportunity to do my Summer Internship Project in his prestigious organization.

Place: Pune More Pranjali Aananda

Date: MBA

Batch ( 2022-2024)

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 Sr. TOPIC Page No.
No.
1 Introduction 7
-objectives
- scope
- limitations
2 0rganization / Company profile 23
3 Literature Review 26
4 Research Methodology & Data 31
Analysis
5 Data Analysis Data 37
Interpretation & Hypothesis Testing
6 Finding & Suggestion 51
7 Recommendations 53
8 Conclusion 55
9 Bibliography, Reffred Books, 57
Annexure

List of Figures:

Sr.no. Title Page

no.
1 Concept of 08
Audit
2 Types of 11
Audit
3 Professional 17
conduct
4 Human 25
Resources
5 Data Sources 35
6 Questionnaire 40
charts(1-12)

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 CHAPTER-1

INTRODUCTION

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A Charge imposed by government on the annual gains of a person, corporation, or other taxable
unit derived through work, business pursuits, investments, property dealings, and other sources
determined in accordance with the revenue code or state law is known as Income Tax.

The central government has been empowered by entry 82 of the union list of schedule vii of
the constitution of India to levy tax on all income other than agricultural income( subject to
section 10 (1)). The income tax law comprises the income tax act 1961, income tax rules 1962 ,
notifications and circulars issued by Central Board of Direct Taxes (CBDT), annual finance acts
and judicial pronouncements by supreme court and high courts.

The government on taxable income of all persons including individuals, Hindu Undivided
Families (HUFs), companies, firms, association of persons, body of individuals, local authority
and any other artificial judicial person. Levy of tax is separate on each of the persons. The levy is
governed by the Indian Income Tax Act, 1961. The Indian income tax department is governed by
Central Board of District Taxes and is part of the department of revenue under the Ministry of
Finance , Government of India. Income tax is a key source of funds that the government uses to
fund its activities and serve the public.

As per section 2(7) of Income Tax Act, 1961 the term “assessee” means any person by whom
any tax or any other sum of money is payable under this Act, and includes-

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 a) Every person in respect of whom any proceedings under Income Tax Act has been
taken :-
1) For the assessment of his income or of the income of any other person in
respect of which he is
2) To determine the loss sustained by him or by such other person ; or
3) The amount of refund due to him or to such other person.

Every person who is deemed to be assessee under any provisions of Income Tax Act.

a) Assessee in default : every person who is deemed to be an assessee who has failed to
comply with any of the duties imposed upon him by the Income Tax Act.

Every year many salaried individual file their income tax return. This income tax return is based
on the form 16 provided by the employer to the employee. Present project aims to understand
how income tax return of a salaried individual is filed and what kinds of taxes are charged on a
salaried individual.

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*DEFINITION OF AUDITING:
Arens and Loebbecke, 1998 defines Auditing as:

"Auditing is the process by which a competent, independent person accumulates and evaluates
evidence about quantifiable information related to a specific economic entity for the purpose of
determining and reporting on the degree of correspondence between the quantifiable information
and established criteria."

L.R.Dicksee defines Auditing as:

“Auditing is an examination of accounting records undertaken with a view to establishment.

whether they correctly and completely reflect the transactions to which they purport to. relate.”

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*TYPES OF AUDIT:

There are various types of audit Such as:

1) Operational Audit

2) Compliance Audit

3) Audit of Financial Statements

4) Internal Audit

5) Interim Audit

6) Performance Audit Governmental Audit

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 1) Operational Audit:

Operational Audit refers to the study of business operations for the purpose of making
recommendations about the economic and efficient use of resources, effective achievement of
business objectives and compliance with company policies.At the completion of an operational
audit, recommendations to management for improving operations are normally expected. The
goal of operational audit is to help managers to discharge their management responsibilities and
improve profitability.

2) Compliance Audit:

Management often wants to know whether its organizational policies are being complied with or
whether external mandates are being met.

The purpose of a compliance audit is to determine whether the auditee is following specific
PROCEDURE or rules set down by some higher authority.

Results of compliance audits are generally reported to someone within the organizational unit
being audited rather than to a broad spectrum of users. Management, as opposed to outside users,
is the primary group concern with the extent of compliance with certain prescribed
PROCEDURE and regulations. Hence a significant portion of work of this type is done by
auditors employed by the organizational units themselves.

Compliance audit involves:

. Examining transactions and detailed records, and

.Identifying weaknesses.

3) Audit of Financial Statements:

Financial statements audits are conducted to determine whether financial statements are
presented fairly in accordance with generally accepted accounting principles (GAAP).
However, public

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sector financial audits also determine whether financial statements are presented in accordance
with applicable laws and regulations.

An audit of financial statements is conducted to determine whether the overall financial

statements the quantifiable information being verified are stated in accordance with specific
criteria. The financial statements most commonly included are the statement of financial
position, income statement and statement of cash flow, including accompanying footnotes.

The assumption underlying an audit of financial statements is that they will be used by different
groups for different purposes. Therefore, it is more efficient to have one auditor perform an audit
and draw conclusion that can be relied upon by all users than to have each user perform his or
her own audit.

4) Internal Audit:

Internal audit is an independent appraisal function established within an organization to examine

and evaluate its activities as a service to the organization. The objective of internal auditing is to
assist members of the organization in the effective discharge of their responsibilities. To this end,
internal audit furnishes them with analyses, appraisals, recommendations, counsel, and
information concerning the activities reviewed.

Internal audit is practiced by auditors employed by an organization, such as a bank, hospital, city
government, or industrial company. The Institute of Internal Auditors is the international
organization that governs the standards, continuing education and generals rules of conduct for
internal auditors as a profession.

5) Interim Audit:

Interim audit refers to the PROCEDURE applied prior to the client's year end, primarily for the
purpose of lowering the assessed risk level. The interim audit phase consists of resting the
client's internal accounting controls and performing substantive tests of transactions. Interim
audit PROCEDURE performed several weeks or months before the balance sheet date.

In recent years, certain changes in the information processing environment have begun to alter
the traditional approach to the interim audit. Instead of testing the internal control PROCEDURE
during a single interim time period, auditors are applying these tests, along with tests of selected
transactions, at frequent intervals throughout the year. This sometimes referred to as Continuous
Audit. This type of audit is especially applicable to those clients with sophisticated computer
based accounting applications.

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 6) Performance Audit:

Performance audits address the economy, efficiency, and program results of a reporting unit.
Economy and efficiency audits are performed to determine whether management's objectives are
being achieved and to identify opportunities and develop recommendations for improvements.
Program audit includes determining (1) the extent to which the desired results or benefits
established by the legislature or other organizing body are being achieved, (2) the effectiveness
of organizations, programs, activities, or functions, and (3) whether the entity has complied with
laws and regulations applicable to the program.

7) Governmental Audit:

Governmental audit may be defined as testing and reporting on conformity with laws and
regulations relating to recipients of federal financial assistance. Governmental audit refers to the
independent auditor's responsibility for determining compliance with laws and regulations when
engaged in audits of state and local governmental units, as well as other not-for- profit entities,
that are the recipients of federal finance assistance.

Governmental auditors are employed by various state, local, and federal agencies. The work
performed by these auditors' ranges from a internal audits of a specific agency to audits of other
governmental units to audits of reports furnished to the government by outside organizations.

The project was carried out at Mr.Ashok Chandanshiv firm. SKPN & Associates LLP is a tax
preparation firm (CA firm) in Nilanga[ Latur dist.].

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  AICPA GENERALLY ACCEPTED AUDITING STANDARDS:
Auditing standards are general guidelines to aid auditors in fulfilling their professional
responsibilities in the audit of historical financial statements. They include consideration
of professional qualities such as competence and independence, reporting requirements,
and evidence.

The broadest guidelines available are the ten Generally Accepted Auditing Standards
(GAAS). These standards were developed by the AICPA in 1947, they have, with
minimal changes, remained the same. These standards are not sufficiently specific to
provide any meaningful guide to practitioners, but they do represent a framework upon
which the AICPA can provide interpretations.

The ten Generally Accepted Auditing Standards are as follows:

General Standards

 The audit is to be performed by a person or persons having adequate technical training

and proficiency as an auditor.
 In all matters relating to the assignment, independence in mental attitude is to be
maintained by the auditor or auditors.
 Due professional care is to be exercised in the performance of the audit and the
preparation of the report.

Field Work Standards

 The work is to be adequately planned, and assistants, if any, are to be properly supervised.
 A sufficient Understanding of the internal control structure is to be obtained to plan the
audit and to determine the nature, timing, and extent of tests to be performed.
 Sufficient competent evidential matter is to be obtained through inspection, observations,
inquiries, and confirmations to afford a reasonable basis for an opinion regarding the
financial statements under audit.

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Reporting Standards

 The report shall state whether the financial statements are presented in accordance with
generally accepted accounting principles (GAAP).
 The report shall identify those circumstances in which such principles have not been
consistently observed in the current period in relation to the preceding period.
 Informative disclosures in the financial statements are to be regarded as reasonably
adequate unless otherwise stated in the report.

 The report shall either contain an expression of opinion regarding the financial
statements, taken as a whole, or an assertion to the effect that an opinion cannot be
expressed. When an overall opinion cannot be expressed, the reasons therefore should be
stated. In all cases where an auditor's name is associated with financial statements, the
report should contain a clear-cut indication of the character of the auditor's work, if any,
and the degree of responsibility the auditor is taking.

PROFESSIONAL CONDUCT:

The AICPA Code of Professional Conduct (the Code) consists of four components. The
principles provide the ethical concepts on which the Rules of Conduct are based as well
as the standards for meeting the public trust. The principles provide the broadest
framework for professional conduct and should be the highest guide for professional
action. Auditors should always look first to the principles for professional guidance. The
rules are only guides to help accomplish the broad principles of the profession.

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 AICPA Code of Professional Conduct

CONCEPTS

RULES OF CONDUCT

INTERPRETATIONS

ETHICAL RULINGS

Ideal standards of ethical conduct stated in philosophical terms.

They are not enforceable.

Minimum standards of ethical conduct stated as specific rules.

They are enforceable.

Interpretations of rules of conduct by the AICPA Division of Professional Ethics. They are not
enforceable, but a practitioner must justify departure.

Published explanations and answers to questions about the rules of conduct submitted to the
AICPA by practitioners and others interested in ethical requirements. They are not enforceable,
but a practitioner must justify departure.

AICPA Principles of Professional Conduct:

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The principles provide the ethical concepts on which the Rules of Conduct are based as well as
the standards for meeting the public trust. The principles provide the broadest framework for
professional conduct and should be the highest guide for professional action. Auditors should
always look first to the principles for professional guidance. The principles are as follows:

Responsibilities:

In carrying out their responsibilities as professionals, members should exercise sensitive

professional and moral judgments in all their activities.

Public Interest :

Members should accept the obligation to act in a way that will serve the public interest, honor the
public trust, and demonstrate commitment to professionalism.

Integrity:

To maintain and broaden public confidence, members should perform all professional
responsibilities with the highest sense of integrity.

Objectivity and independence:

A member should maintain objectivity and be free of conflicts in discharging professional

responsibilities. A member in public practice should be independent in fact and appearance when
providing auditing and other attestation services.

Due care:

A member should observe the profession's technical and ethical standards, strive continually to
improve competence and the quality of services, and discharge professional responsibility to the
best of the member's ability.

Scope and nature of services:

A member in public practice should observe the principles of the Code of Professional Conduct
in determining the scope and nature of services to be provided.

• AUDIT RISKS:

The auditor should obtain an understanding of the accounting and internal control systems
sufficient to plan the audit and develop an effective audit approach. The auditor should use

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professional judgment to assess audit risk and to design mudit PROCEDURE to ensure it is
reduced to an acceptably low level.

Audit risk is defined as "the risk that the auditor may unknowingly fail to appropriately modify
his/her opinion on financial statements that are materially misstated". So audit risk is the risk that
the auditor gives an inappropriate audit opinion when the financial statements are materially
misstated. Audit risk has three components:

 "Inherent risk" is the susceptibility of an account balance or class of transactions

misstatement that could be material. individually or when aggregated with misstatements
in other balances or classes, assuming that there were no related internal controls.
 "Control risk" is the risk that a misstatement that could occur in an account balance or
class of transactions and that could be material individually or when aggregated with
misstatements in other balances or classes, will not be prevented or detected and
corrected on a timely basis by the accounting and internal control systems.
 "Detection risk" is the risk that an auditor's substantive PROCEDURE will not detect a
misstatement that exists in an account balance or class of transactions that could be
material, individually or when aggregated with misstatements in other balances or
classes.

Audit Evidence:

Audit evidence consists of those facts and inferences that influence the auditor's mind with
respect to financial presentation.

The collective purpose of all audit PROCEDURE is to gather sufficient competent evidence to
form an opinion on the fairness of the financial statements taken as a whole.

Characteristics of Audit Evidence:

It is important that the auditor appreciate the different characteristics of audit evidence and the
reliance that can be placed on each type. Audit evidence can be characterized as:

 Generated and held by the client.

 Received from outside parties and held by the client.
 Received directly by the auditor by independent means or from independent or quasi-
independent parties.

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Task Undertaken

Before discussing the Audit PROCEDURE followed by SKPN & Associates, I try to focus on
the engagement PROCEDURE through which SKPN & Associates is engaged/recruited by the
client to perform the audit. SKPN & Associates faces three kinds of situations in engagement
process:

 Engagement with new client.

 Engagement with existing client.
 Directly appointed by the client.

Before starting the audit work, some letters are exchanged between SKPN & Associates
and clients.

In case of last year's client

Three letters are exchanged between CA Yogesh Tibrewal & Associates and client:

 Willingness letter for reappointment: In this letter CA Yogesh Tibrewal & Associates
wants to audit this year. It can request to increase audit fee or change some other
conditions.
 Client sends appointment letter.
 CA Yogesh Tibrewal & Associates accept this appointment.

In case of directly appointed by the client

If the client is interested to work with CA Yogesh Tibrewal & Associates, then it directly
sends an appointment letter to the firm which includes all terms and conditions. If all
terms and conditions are favorable to CA Yogesh Tibrewal & Associates then it accepts
the appointment and sends a letter to the client as an auditor.

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*OBJECTIVES & SCOPE OF THE PROJECT –

Objectives of the project:

Primary objective

 To understand the process of income tax liability of salaried individual.

 To study various income tax provisions related to salaried individual according to the
Income Tax Act, 1961 as amended by the Finance Act,2007.

Secondary objective

 To calculate income tax liability of salaried individual with reference to 6 case.

 To study how to simplify the tax planning procedure from a layman’s perspective.

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*SCOPE

Scope of the project:

 The scope of this project is restricted to calculate tax liabilities of salaried individual
for the Assessment Year 2021-2022 at CA YogeshTibrewal& Associates with
reference to 2 cases.

*Limitations

 The project report is prepared based over the study of 2 months.

 This is based on the assessment year 2021-2022.
 The project is only based over income of the salaried individual and not other income
has been considered for study.

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 CHAPTER-2

ORGANIZATION/ COMPANY PROFILE

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ABOUT THE COMPANY

Name of the firm : CA YogeshTibrewal& Associates

Address : Mukund Niwas, Vidhya Nagar, Nilanga. Dist:Latur

Email : ytassociate@gmail.com

Membership no : 141530

 Background:

Founded in 2019,the name “ CA Yogesh Tibrewal & Associates” comes from the
acronyms of the founder: YOGESH TIBREWAL.

 Registration of firm:

CA Yogesh Tibrewal & Associates is registered under the Institute of Chartered

Accountants of New Delhi in the year 2019.

 ACHIEVEMENT OF FIRMS:

 A Brief statement on the outstanding activities and innovation by CA Yogesh

Tibrewal & Associates:

CA Yogesh Tibrewal & Associates Introduced stipend to attract brilliant students to the
profession of accounting in Nilanga. It has introduced and implemented several forms for
an effective audit field work. It is considered to be the market leader in audit and
evaluation of microfinance organization.

 Publication and manuals used internally by the firm:

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 CA Yogesh Tibrewal & Associates has developed the following two manuals which are
extensively used by the CA Yogesh Tibrewal & Associates staffs:

 HUMAN RESOURCES:

Sr. personnel Number

#
01. Professional staff 1
02. Supporting staff ( trainee) 2
3
Total

 LOGISTIC SUPPORT :

List of important industries in which the firm has experience

 Banks,
 Micro-Finance Institution (MFI),
 Non-Government Organization (NGO).

At present CA Yogesh Tibrewal & Associates have 62 audit clients. As one of the top
four firms in Latur CA Yogesh Tibrewal & Associates have audit clients of all type, e.g.
public, private, governmental, profit/non-profit organizations.

 SERVICES OFFERED COVER THE FOLLOWING ARE AS:

-Statutory audit
-Management consultation/ development
-Accountancy
-Taxation
-Accountancy and management training
-System development
-Data processing with computer
-privatization consultancy ( it includes pre-privatization review, restructuring,
valuation in particular and privatization assistance in general)

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-Shop act lisence
-Other accounting ancillary services including investigation, internal and
management audit.
-Micro-finance consulting
-Organizational consulting services
-Designing computerized systems for MIS and accounting and its implementation
-Business/asset valuation.

CHAPTER-3
LITERATURE REVIEW

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Chen and Church (1992) take the severity of the crisis of listed companies as the
starting point, and conclude that when the crisis of listed companies becomes obvious
(such as net loss, debt default, pending litigation), auditors are more likely to find the
crisis of going concern, so they are more likely to issue non-standard audit opinions .
Lennox (2002), empirical research shows that companies with high liabilities have a high
probability of receiving non-standard audit opinions due to the high risk of bankruptcy.

Chow and Rice (1982), put forward the same view: the change of auditor has a positive
correlation with the retained audit opinion of the most recent fiscal year before the
change
.

Lennox (2000) uses the British listed companies as the research sample, designs the audit
opinion estimation model to estimate the types of audit opinions that the listed companies
may receive when they do not change their auditors, and compares it with the audit
opinion types after changing their auditors, and finds that the British listed companies
have successfully realized the purchase of audit opinions.

Defond and Subramanyam (1998) concluded that even if the company changed the
accounting firm or audit that provided audit services for it, the subsequent firms would
still maintain a high degree of prudence in their statements .

Lennox, C. (2003) thought that the partner of the auditee’s former accounting firm was
an associated enterprise . They found that such an associated enterprise was more likely
to receive clean audit opinions, and receiving clean audit opinions would make the
company feel that this association was more valuable.

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 The common conclusion of De Angelo (1981) and Dye (1993) is that the larger the
accounting firm is, the higher the audit quality it provides. De Angelo (1981) found that
the larger the size of the firm, the higher the reputation, so as to maintain a high degree of
independence and professional judgment . A large-scale firm can reduce its economic
dependence on a certain customer and provide non-standard audit opinions. If the audit
failure leads to the loss of the firm, the larger the scale, the greater the loss, that is to say,
“deep pocket” effect. These reasons make the large-scale firm more cautious, and will
issue more non-standard audit opinions, which means the higher the audit quality.

Lindsay (1988), through an empirical study of the Canadian market, concludes that the size of
the firm will have an impact on the independence of the audit, and ultimately the type of audit
opinion
.

Arens and Loebbecke, 1998 defines Auditing as:

"Auditing is the process by which a competent, independent person accumulates and evaluates
evidence about quantifiable information related to a specific economic entity for the purpose of
determining and reporting on the degree of correspondence between the quantifiable information
and established criteria."

This definition includes several key words and phrases. To understand the definition, different
terms are discussed below:

Competent, Independent Person:

The auditor must be qualified to understand the criteria used and competent to know the types
and amount of evidence to accumulate to reach the proper conclusion after the evidence has been
examined.

The auditor must also have an independent mental attitude. It does little good to have a
competent person who is biased performing the evidence accumulation when unbiased
information and objective thinking are needed for the judgments and decisions to be made.
Independence cannot be absolute by any means, but it must be a goal that is worked toward; and
it can be achieved to a certain degree.

Accumulating and Evaluating Evidence:

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Evidence is defined as any information used by the auditor to determine whether the quantifiable
information being audited is stated in accordance with the established criteria.

Evidence takes many different forms, including oral testimony of the auditee (client), written
communication with outsiders, and observation by the auditor. It is important to obtain sufficient
quality and volume of evidence to satisfy the audit objectives. The process of determining the
amount of evidence necessary and evaluating whether the quantifiable information corresponds
to the established criteria is a critical task for every auditor.

Quantifiable Information and Established Criteria:

To do an audit, there must be information in a verifiable form and some standards (criteria) by
which the auditor can evaluate the information.

Quantifiable information can and does take many forms. It is possible to audit such thing as a
company's financial statements, the amount of time it takes an employee to complete an assigned
task, the total cost of a government construction contract, and an individual's tax return.

The criteria for evaluating quantitative information can also vary considerably. For example, in
auditing a vendor's invoice for the acquisition of raw materials, it is possible to determine
whether materials of the quantity and stated description were actually received, whether the
proper raw material was acquired considering the production needs of the company, or whether
the price charged for the goods was reasonable. The criteria used depend upon the objectives of
the audit.

Economic Entity:

Whenever an audit is conducted, the scope of the auditor's responsibility must be made clear.
The primary method involves defining the economic entity and the time period.

In most instances the economic entity is also a legal entity, such as a corporation, unit of
government, partnership, or proprietorship. In some cases, however, the entity is defined as a
division, a department, or even an individual.

The time period for conducting an audit is typically one year, but there is also audits for a month,
a quarter, several years, and in some cases the lifetime of an entity.

Reporting:

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The final stage in the audit process is the audit report the communication of the findings to users.
Reports differ in nature, but in all cases they must inform readers of the degree of
correspondence between quantifiable information and established criteria.

DISTINCTION BETWEEN AUDITING AND ACCOUNTING

Many financial statements users and members of the general public confuse auditing with
accounting. The confusion results because most auditing is concerned with accounting
information, and many auditors have considerable expertise in accounting matters. Although
auditing and accounting are related, they are distinct from each other.

Accounting and Auditing Contrast

Accounting involves collecting, summarizing, reporting, and interpreting financial data.
Accounting is the process of recording, classifying, and summarizing economic events in a
logical manner for the purpose of providing financial information for decision making. The
function of accounting, to an entity and a society as a whole, is to provide certain types of
quantitative information that management and others can use to make decisions.

To provide relevant information, accountants must have a thorough understanding of the

principles and rules that provides the basis for preparing the accounting information. In addition,
accountants must develop a system to make sure that the entity's economic events are properly
recorded on a timely basis and at a reasonable cost.

Auditing, by contrast, utilizes the theory of evidence-in much the same way as does the legal
profession- to verify the overall reasonableness (fairness) of the financial statements presented.
In auditing accounting data, the concern is with determining whether recorded information
properly reflects the economic events that occurred during the accounting period. Since the
accounting rules are the criteria for evaluating whether the accounting information is properly
recorded, any auditor involved with these data must also thoroughly understand the rules. In the
context of the audit of financial statements, these are generally accepted accounting principles
(GAAP).

28
 CHAPTER-4

RESEARCH METHODOLOGY & DATA ANALYSIS

29
Research Methodology:

Research refers to search for a knowledge. One can also define research is a scientific &
systematic search for pertinent information on a specific topic. It is an art of scientific
investigation.

Implies more than simply the methods you intend to use to collect data. It is often necessary
to include a consideration of the concepts and theories which underlie the methods. For instance,
if you intend to highlight a specific feature of a sociological theory or test an algorithm for some
aspect of information retrieval, or test the validity of a particular system, you have to show that
you understand the underlying concepts of the methodology.

When you describe your methods, it is necessary to state how you have addressed the
research questions and/or hypotheses. The methods should be described in enough detail for the
study to be replicated, or at least repeated in a similar way in another situation. Every stage
should be explained and justified with clear reasons for the choice of your particular methods and
materials.

There are many different ways to approach the research that fulfil the requirements of a
dissertation. These may vary both within and between disciplines. It is important to consider the
expectations and possibilities concerning research in your own field. You can do this by talking
to your tutors and looking at dissertations written by former students on your course.

Definition:

"In the broadest sense of the word, the definition of research includes any gathering of data,
information and facts for the advancement of knowledge".

"Research is a process of steps used to collect and analyse information to increase our
Understanding of a topic or issue".

30
Primary and secondary sources of data were gathered for the research. Primary source of data
was collected through the use of questionnaires and survey interviews. The secondary sources of
information were collected from past research work, books, journals, articles, internet search, etc.

 METHODOLOGY OF COLLECTION OF INFORMATION

In order to prepare the assigned project paper I have collected necessary

information from two types of source as follows:
 Primary sources information.
 Secondary sources information.

PRIMARY SOURCES INFORMATION

 I have collected primary information by working with staff.

 Discussing with engagement partner, Audit manager, staff and articled student.

SECONDARY SOURCES INFORMATION

 I have also collected secondary information like annual audit report, management
audit report, accounting system and audit working papers.
 The information was obtained from various corresponding files of the firm.

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Data Collection Tool:
The questionnaire was the only tool used to collect data. Liker type close ended) questionnaire
was employed to generate data. The importance of the use of close ended questions was to avoid
delays in responding to the questionnaire, thus enabling the respondents who had boy schedules
to respond quickly. Another reason for using close ended questions was that coding of close
ended questions did not take much time as compared to open ended questions and also for testing
hypothesis.

Importance of Research
Research is important both in scientific and non-scientific fields. In our life new problems,
events, phenomena and processes occin every day. Practically implentettable solutions and
suggestions are required for tack-ling new problems that arise. Scientists have to under-take
research on them and find their causes solutions, explanations and applications Precisely,
Research assists us to understand nature and natural phenomena.

AREA OF STUDY

Area of study was an Trainee, where in ,recording of bank statements, purchase bill as well as
sales bill, audit report, statutory audit, accountancy, taxation related work,etc. was done.

It also included managing clients and keeping financial records and records of various
documents submitted by the clients.

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TYPE OF RESEARCH
Descriptive Research :

Descriptive research aims to describe a population, situation, or phenomenon accurately and

systematically. It can answer what, when, where, when and how questions, but not why
questions. To determine cause and effect, experimental research is required. A descriptive
research design can use a wide variety of quantitative and qualitative methods to Investigate one
or more variables. Unlike in experimental research, the researcher does not Control or
manipulate any of the variables, but only observes and measures them.

SAMPLE TECHNIQUE

Random sample technique-

Random sampling is a part of the sampling technique in which each sample has an equal
probability of being chosen A sample chosen randomly is mcarn to be an unbiased representation
of the total population. An unbiased random sample is important for drawing conclusions.

Research Approach

The research involved in both interview and survey Research method involving face to face
Interaction with the clients working.

Research Tool

Along with a Survey Research Based Questionnaire.

33
Sample Size

Sample of 51 clients were taken for analysis.

Sampling Method

Simple random sampling method.

Likert Scale

Likert scale method was used in this research project with the help of Google forms for survey.

34
 CHAPTER-5
DATA ANALYSIS, DATA INTERPRETATION &
HYPOTHESIS TESTING

35
36
Interpretation: As per the given chart, we can see that total 51 clients those were screened and
in opinion of 54.9% clients the financial statements reviewed by an independent public
accounting firm.and in opinion of 37.3% clients financial statements are moderate reviewed by
an independent public accounting firm. And 7.8% people reviewed for poor response.

37
Interpretation: As per the given pie diagram , it is been seen that the firm provides entire
financial transaction like bank statement, tax, audit, purchase bill, sales bill.etc. as you can see
the most responses for Audit.

38
Interpretation: In the above chart shows that the CA firm controls to prevent expenditure of
funds in excess of approved, budgeted amounts.

39
Interpretation: As per the given pie diagram ,the most of the clients give importance to CA
Firm 68.6% is positive response & 31.4% response is negative.. and the majority is for positive
response.

40
Interpretation :As we can see, in the above graphical diagram, we can get to the result that, in
clients opinion the most important aspect of the audit process is budget planning which is
41.2%.secondly is to insure compliance ,25.5%.and low is prevents fraud which is 11.8%.

41
Interpretation : finance audit is suitable for midscale business .as we know that audit is
important for small scale, midscale as well as large scale industries.this is the reason for finance
audit is suitable for all scale industries.

42
Interpretation: How firm identify and analyse or access the risk of material misstatement in an
audit engagement.35.3% clients look towards when balancesheet does not match. Secondly,for
when we analyse fraud which is 33.3% And all remaining material is looked by clients.

43
Interpretation: payroll charges checked against program budgets 54.9% responses are for
moderate and 35.3% is for extremely.

44
Interpretstion: from this question we get research 51% clients think that audit helps to build
trust it means it is moderate & 47.1% clients think that audit helps to build trust it means it is on
extreme level.

45
Interpretation: This question represents that 72.5% clients thinks that financial audit is
important to their organization. 27.5% clients responses are negative.

46
Do you confident in the accuracy and completeness of your financial statements without of
financial audit?

Chart Title
ExtremelyModeratePoor

8%
11%

81%

Interpretation: This data represents that 81% clients thinks that audit is important for accuracy
in their financial statements , 11% clients response is for neutral and 8% response is for negative

47
Interpretation: This data represents that 54.9% clients thinks that financial
statements reviewed by an independent public accounting firm which is moderate
and 37.3% clients thinks that financial statements are not reviewed by an
independent public accounting firm.

48
 CHAPTER-6

FINDINGS & SUGGESTION

49
Audit is an emotional response to a job situation. It can't be seen but only referred. Audit is often
determined by how well outcome meet exceed expectations.

Audit procedure represent several related attitudes.

CA Yogesh Tibrewal & Associates expresses an opinion as to whether the financial statement
are prepared and presented fairly taking generally accepted accounting principle [GAAP] into
consideration.

The audit team addresses the responsibilities for error, irregularities, efficiency and

client value.

CA Yogesh Tibrewal & Associates follows BAKER TALLY International audit procedure with
a view to provide opinion on financial statements in accordance BAS as well as ISA.

The procedure followed by the organization is as following:

1. Identify overall goals.

2. Gather & evaluate initial information.

3. Assess general risk

4. Develop effective & efficient audit plan/ work program.

5. Conduct audit testing.

6. Evaluate & communicate audit results.

CA Yogesh Tibrewal & Associates brings an external auditor, identifies the clients expectation
and design and work to meet the same.

50
 CHAPTER-7

RECOMMENDATIONS

51
Working at CA Yogesh Tibrewal & Associates, Corporate Office was a great experience for me.
I have learnt many things throughout my internship period. From my little knowledge what I
have some recommendations as follows: CA Yogesh Tibrewal & Associates have a very few
employee at account management department whereas the work pressure is high.

* So the firm could increase their workforce and share the work together.

*Secondly, to increase the rate of work efficiency they need faster computer with user friendly
operating system.

* There is customized accounting software in the firm which is not beneficial.

* The company should update or add more features in that software and appoint a professional
operator so that it might save time, money, labor and execute an impact for the long run.

52
CHAPTER-8

CONCLUSION

53
Audit Procedure describes the step by step instructions of a financial statement audit. This
procedure is sufficient for CA YOGESH TIBREWAL & ASSOCIATES. If all these steps are
followed properly, it is possible to ensure a proper conduct of financial statement audit. But as I
stated above, in some cases the auditors of CA YOGESH TIBREWAL & ASSOCIATES
violates some audit standards and not carry out their audit tasks properly. As a result, the quality
of audit work cannot be ensured all the time. But if all these problems can be removed, CA
YOGESH TIBREWAL & ASSOCIATES will be able to maintain its present status and improve
its position to the client. So all the partners and the articled students of CA YOGESH
TIBREWAL & ASSOCIATES must be conscious about this matter.

54
 CHAPTER-9

BIBLOGRAPHY, REFFRED BOOKS, ANNEXTURE

55
1. www.taxfoudation.org/

2. http://finotax.com/income-tax/slabs-next

3. https://cleartax.in/

4. http://www.incometaxindia.gov.in/

5. https://en.wikipedia.org/wiki/Income tax in India

6. http://taxguru.in/

7. http://finotax.com/

Books

The Audit Process

By lain Gray, Stuart Manson, Louise Crawford.

Audit Procedures

By Luis puncel.

56
 ANNEXURE

1) Do your firm give importance to finance audit?

a) Extremely
b) Moderate
c) Poor

2) In your opinion, what is the most important aspect of the audit process?

a) To insure compliance

b) Provide creditability

c) Prevents fraud

d) Budget Planning

3) Do you think finance audit is unsuitable for midscale business because it require expertise and
it is costly?

a) Extremely

b) Moderate

c) Poor

4) How do you identify and assess the risk of material misstatement in an audit engagement?

a) When balance sheet does not match

b) When we analyse fraud

c) Absence of credibility

d) Absence of compliance

57
 5) Are payroll charges checked against program budgets ?

a) Extremely

b) Moderate

c) Poor

6) Do you think that conducting financial audits helps to build trust with stakeholders?

a) Extremely

b) Moderate

c) Poor

7) Do you think a financial audit is important to your organisation?

a) Extremely

b) Moderate

c) Poor

58
 8) In your opinion, what are the benefits of conducting financial audits?

a) Recording the financial report

b) Improve internal accounting control

c) Minimize the possibility of fraud

d) Identify weakness in internal control

9) Do you confident in the accuracy and completeness of your financial statements without
of financial audit?

a) Extremely
b) Moderate
c) Poor

10) Does your organisation have its financial statements reviewed by an

independent public accounting firm?

a) Extremely
b) Moderate
c) Poor

59
11) Are duties separated so that no one individual has complete authority
over an entire financial transaction?

a) Tax
b) Audit
c) Purchase bill
d) Sales bill

12) Does your organisation have controls to prevent expenditure of funds

in excess of approved, budgeting amounts?

a) Extremely
b) Moderate
c) Poor

60