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CMADD > CH 8 - Audit & CG Audit > Flashcards

CH 8 - Audit & CG Audit Flashcards

1
Q

Define Audit

A

Audit is an independent and systematic examination of the financial statements and non financial disclosures of to ensure tat they provide a true and fair view of the affairs of the company.

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2
Q

Name the Audits applicable under companies act 2013

A

Statutory Audit
Internal Audit
Secretarial Audit
Cost Audit

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3
Q

Classification of audits and its examples

A

Financial and Compliance
Financial - Stat, cost, internal
Compliance - Sec, cyber, compliance gov, labor, systems, CSR, takeover

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4
Q

What is corporate governance audit ?

A

It is the audit of the Corp gov activities and processes undertaken in the company

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5
Q

What is corporate governance ?

A

It is a set of strategic activities undertaken to ensure that an organisation practices
* Accountability
* Transparency
* Integrity
* Fairness &
* Ethical conduct
in every aspect of its business

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6
Q

What is the need of corporate gov audit?
or
Benefits of Corporate gov Audit.

A
  1. Recent increase in scams and scandals
  2. stakeholders assurance - req Corp gov activities are undertaken
  3. Monitoring device - on the functioning of BOD and management
  4. Effective check - supervisory, control and directory layers of the org.
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7
Q

Who is in charge of Corp gov audit ?

A

Audit committee and Auditor

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8
Q

what is the scope of Corp gov Audit ?

A
  1. transparency - disclosures and reporting
  2. Disclosures - Fin and Non fin
  3. BOD - composition, mix, independence
  4. Risk mgt
  5. Stakeholders int & rights
  6. Control environment.
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9
Q

Sec governing Audit committee (AuC) in COA 2013

A

177

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10
Q

LODR Regulation number wrt to Audit committee (AuC) ?

A

18

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11
Q

Applicability of Audit com.

A
  1. Every listed company
  2. Public Co -
    a) PSC - 10 cr or more
    b) T/o - 100 cr or more
    c) O/s Debentures, loans, Deposits - 50 cr or more (aggregate)
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12
Q

Min No of directors under in AuC ?

A

3

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13
Q

Independent directors in AuC ?

A

**as per COA 2013 - Majority
as per LODR reg - 2/3 of the total (in case of o/s SR eq sh - ALL)

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14
Q

Financial Literacy (Read and understand financial statements) in AuC

A

as per COA 2013 - Majority + Chairperson
as per LODR reg - ALL

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15
Q

what are the additional Req for AuC under LODR reg ?

A
  1. Financial Expert - at least 1
  2. CS of Co = CS of Comm
  3. Chairperson to be present at AGM to answer to shareholder’s queries.
  4. Authority to invite executives to be present at meeting of AuC.
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16
Q

Who is a Financial Expert as per LODR reg ?

A

Is a person with expert knowledge in the field of accounting or financial management.

17
Q

What is the Role of AuC ?

A

MR VIP is SAD (R - 2, I - 2, S - 2, A -2)
* M- Modified opinions of the auditor
* R - Review - quarterly fin statements, significant audit findings
* R - Review - Audit report, Annual FS, DRS
* V - Vigil Mechanism/ whistle blower policy
* I - independence of auditor
* I - internal controls and RM systems
* P - payment to stat auditor - approval
* S - Scrutiny of loans/borrowings/investments
* S - Scope of audit function
* A - Approval - RPT
* A- Appointment remuneration of Auditor
* D - disclosures - fin statements - correct, sufficient and credible.

18
Q

Name the 5 aspects of CG audit checklist.

A
  • Accountability
  • Transparency
  • Responsibility
  • Fairness
  • Shareholder interest
19
Q

contents of CG audit checklist - Transparency

A
  • Investor - aware - rights
  • material matters - disclosures
  • insider trading policy
  • political contribution policy
  • remuneration policy
20
Q

contents of CG audit checklist - Accountability

A
  • Separation of ownership and control
  • management accountable to BOD
  • BOD accountable to Sholder
  • ID have sufficient powers to play their role
  • AuC has its policies in place
  • Auditors - access to info
21
Q

contents of CG audit checklist - fairness

A
  • Maj and min are =
  • effective resolution of violations
  • fair pricing policy
  • fair market conduct
22
Q

contents of CG audit checklist - Responsibility

A
  • towards society and stakeholders - Co has policy on - stakeholders rights, buss sustainability, social responsibility
  • of Board - Corp strategies, annual budgets, action plans, risk management policies etc.
23
Q

contents of CG audit checklist - Shareholder interests

A
  • protection of min shareholders
  • info on - a) MOA/AOA changes b) Assets significant changes c) alteration in sh cap
  • disclosures of acquisition policies
  • disclosures of material interests of Dir/KMP
  • disclosures on capital structures and arrangements
  • variation of rights of shareholders is in compliance with the provisions of the act thereto

CMADD (2 decks)

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