BUSINESS

ETHICS AND
AUDITING

SUBMITTED BY:
G A U R AV M I D A
ROLL NO.
3238
 THE MEANING OF BUSINESS
ETHICS
B u s i n e s s Ethics can be defined as critical structured
examination of how to people and institutions should
behave in the world of commerce
Ethics is a branch of social science, it deals with the moral
principles and social values. It helps us to classify what is
good and what is bad?
RULES AND PRINCIPLES OF BUSINESS
ETHICS
1. AVOID EXPLOITATION OF CONSUMERS-
Don’t
cheat and exploit consumers by using bad business
practices such as artificial price rise etc.
2.PAY TAX REGULARLY- Pay tax and other
charges or duties to Government with honesty and
regularly.
3. GET ACCOUNTS AUDITED- Now the
main
priniciple of Business Ethics to discuss maintain
accurate business record, accounts and make them
available to all authorized persons.
 MEANING OF
AUDITING
 T h e Auditing is an inspection , correction and verification
of business accounts conducted by an independent
qualify Accountant.

 A n Audit is an examination of an individual or Company

Tax returns to verify its accuracy. There are mainly three
types of Audit:

 CORRESPON DEN CE AUDIT

 O F F I C E AUDIT
 F I E L D AUDIT
 OBJECTIVES OF AUDITING

Primary Secondary

Detection of Error Detection of Frauds

1. Error of Commission 1. Misappropriation of cash

2. Error of omission 2. Misappropriation of Goods
3. Compensating Error 3. Misuse of Accounts
 THE OTHER TWO FIELDS OF
AUDITING COST AUDIT &
MANAGEMENT AUDIT
COST AUDIT
It is an audit process for verify the cost of
manufacture or production of any article on the basis
of accounts.
In the cost audit, Auditor has to perform the
following duties -
1. Examine the correctness of cost records maintain by
the concern.
2. To report to know about operational and technical
aspects of cost.
 MANAGEMENT AUDIT

 A systematic assessment of method

andorganization
policies in the management and use of
of
resources practical and strategic and
planning
employee and organizational improvement.
 T h i s is all done by different types of Auditors.
 AUDITOR

 M e a n i n g - Auditor is an Accountant who conduct an audit to

verify the accuracy of the financial report and accounting
practices of business and Government.
 A u d i t o r is an officer whose duty is to examine the accounts
of officers who have received the money from Public like
share holders and check the all records of the management.
 RIGHTS, DUTIES AND
LIABILITY

 1 . Right to access to Books of Accounts

and Vouchers. 255 (1)
 R i g h t to receive the information and explanations
.
255(2)
 R i g h t to receive notice of General Meetings. Section
255 (6).
 R i g h t to make representations, where another
person being appointed as an Auditor. 255(3)
 DUTIES OF AN AUDITOR 255
(4)

 T o give a report to a member on the accounts, Books

of Accounts, Balance Sheets and Profit and Loss
Account examined by him.
 T o attend those general meetings of a company
either himself or trough authorize.
 T o clarify receipt and payment in the
account statutory reports. (157)
 T o exercise reasonable care and skills.
 LIABILITIES OF AN
AUDITOR

 C i v i l Liabilities- civil liabilities means the dispute

over losses caused to one party by acts of another.
The civil liabilities of an auditor can be for- 1.
Negligence 2. Breech of duty
 C r i m i n a l Liabilities Section(260)- If Auditor fails
to comply with the requirements of section 157. 255
or 257, he shall punishable with the fine up to
100000/- and he shall also be punishable with the
imprisonment for a period of one year.
THANK
YOU