Preface to the Thirteenth Edition (2020)
It gives me great pleasure to present to you, dear readers, the thirteenth
thoroughly revised and updated edition of Principles and Practice of Auditing.
The patronage showered on the book is indeed overwhelming and I really feel
humbled by it.
The reason this edition had to be brought out was: One, incorporating the
several amendments made to the Act in the past years. A fascinating feature of
these amendments is that it remarkably enhances the ease of doing business in
India, taking the country several notches above in the Index of Ease of Doing
Business. Two, it is soft on companies which follow norms and procedures as
prescribed.
Of special significance is the toning down of provisions prescribing
punishment for violation of rules and procedures – ‘penalty’ has been replaced
with ‘fine’, greater discretionary power has been given to enforcement
authorities to help promote investment, particularly from foreign entities.
However, the amended law comes down heavily on companies that shortcircuit legal provisions to enable directors/relatives of major stakeholders to
play with company assets. The statutory auditor is now under an obligation
to report on directors taking loans from companies without timeline of
repayment, replacing existing loans with fresh loans, proper utilization of
funds raised through public issue or borrowings from banks and financial
institutions or through preferential allotment or private placement. As if such
provisions were not enough, the auditor is also required to critically assess the
company management and report whether the company will be able to pay
off its liabilities up to the expiry of six months from end of the financial year.
I hope and pray the book in its revised form comes up to readers’
expectations. As always, I assure them their comments and suggestions would
be my precious treasure that would immensely help me cast the next edition.

Brief Contents

1. Introductory
2. Objects of Audit
3. Classification or Types of Audit
4. Internal Control, Internal Check and Internal Audit
5. Audit Planning, Audit Program, and Working Papers
6. Audit Evidence and Sampling
7. Vouching – Audit of Cash Transactions
8. Vouching – Audit of Trading Transactions
9. Vouching of Impersonal Ledger
10. Verification and Valuation of Assets and Liabilities
11. Auditing in EDP Environment
12. Company Audit – Appointment, Qualifications, and Removal of Auditors
13. Company Audit – Rights and Duties of Auditors
14. Company Audit – Audit of Share Capital, Share Transfer
15 Top-Level Management of Company, and Their Remuneration
16. Audit of Divisible Profits and Dividends
17. Specialized Audits
18. Special Features of Government Audit
19. Audit Report
20. Management Audit
21. Liabilities of Auditors or Professional Accountants
22. Cost Audit
23. Tax Audit
24. Investigations
25. Professional Ethics and Regulation
26. Auditing Statements and Standards on Auditing