SUBMITTED BY:GAURAV MIDAROLL NO. 3238

BUSINESS ETHICS AND AUDITING

THE MEANING OF BUSINESS ETHICS

Business Ethics can be defined as critical structured examination of how to people and institutions should behave in the world of commerceEthics 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

The Auditing is an inspection , correction and verification of business accounts conducted by an independent qualify Accountant.

An Audit is an examination of an individual or Company Tax returns to verify its accuracy. There are mainly three types of Audit:

CORRESPONDENCE AUDITOFFICE AUDITFIELD AUDIT

OBJECTIVES OF AUDITING

Primary Secondary

Detection of Error

Detection of Frauds

1. Error of

Commission

2. Error of omission

3. Compensating

Error

1. Misappropriation of cash

2. Misappropriation of

Goods

3. Misuse of Accounts

THE OTHER TWO FIELDS OF AUDITING COST AUDIT & MANAGEMENT AUDIT

COST AUDITIt 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 and policies of organization in the management and use of resources practical and strategic planning and employee and organizational improvement.

This is all done by different types of Auditors.

AUDITOR

Meaning- Auditor is an Accountant who conduct an audit to verify the accuracy of the financial report and accounting practices of business and Government.

Auditor 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)

Right to receive the information and explanations . 255(2)

Right to receive notice of General Meetings. Section 255 (6).

Right to make representations, where another person being appointed as an Auditor. 255(3)

DUTIES OF AN AUDITOR 255 (4)

To give a report to a member on the accounts, Books of Accounts, Balance Sheets and Profit and Loss Account examined by him.

To attend those general meetings of a company either himself or trough authorize.

To clarify receipt and payment account in the statutory reports. (157)

To exercise reasonable care and skills.

LIABILITIES OF AN AUDITOR

Civil 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

Criminal 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