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Major Project Report: ON The Study of Auditing Functions With Reference To Neosis Advisory Pvt. LTD
Major Project Report: ON The Study of Auditing Functions With Reference To Neosis Advisory Pvt. LTD
ON
BATCH 2012-2015
A lot of effort has gone into this training report. My thanks are due to many
people with whom I have been closely associated.
I would like all those who have contributed in completing this project. First of all, I
would like to send my sincere thanks to MRS. PRABHJOT KAUR for her helpful
hand in the completion of my project.
I would like to thank my entire beloved family & friends for providing me monetary
as well as non – monetary support, as and when required, without which this
project would not have completed on time. Their trust and patience is now
coming out in form of this thesis.
STUDENT’S UNDERTAKING
I hereby certify that this is my original work and it has never been submitted
elsewhere.
11514101712
CONTENTS
LIST OF TABLES
1.
EXECUTIVE SUMMARY
This is to certify that Neela Kohli, pursuing V semester (B) (M) from Jagannath
International Management School, Kalkaji, has completed her project on the topic
“Study on Auditing Functions with reference to NEOSIS ADVISORY PVT LTD.”
under my guidance. Her work is appreciable.
Project guide:
Internal audit
Staffing internal audit is a joint exercise that includes input from the audit
committee and management. Several factors — such as an organization’s size,
complexity, level of risk and geographic diversity — can infl uence decisions
regarding the level of internal audit certifi cation that may be desired.
Selection criteria
Audit committees and management might consider the following factors in staffi
ng an internal audit function:
• A strong leader — Internal audit leaders (often called chief audit executives or
directors of internal audit) must not be afraid to bring potential problems to light.
• Reporting relationships — Regardless of its defi ned reporting relationship to
management and the board,1 internal audit should have frequent, open and
direct lines of communication with the audit committee, and the freedom to
address meaningful organizational risks.
• Need for specialists to deal with complex or diffi cult transactions.
• Geographic diversity — Organizations with wide geographic reach may
benefit from having internal audit personnel located near significant operations.
• Form of compensation fosters appropriate focus on audit quality.
• Objectivity or “independence” — Internal auditors should be familiar with the
subject matter, but should not be so closely tied to the area that their neutrality is
impaired.
The audit committee also should inquire of the independent auditor regarding the
quality of internal auditing personnel in relation to:
• the professional qualifi cations and educational backgrounds of the staff,
• the use of professional training and development programs for the corporate
audit staff, and
• the performance appraisal and evaluation system.
Finally, while each audit committee may develop its own approach to monitoring
the activities of the internal audit function, the following summary thoughts should
be helpful. In general audit committees should:
1. assist in the overall internal auditing policy determination and approve such
policies to ensure that the staff has authority commensurate with its
responsibilities;
2. review the scope of the internal and external auditing plans in order to
maximize the resources allocated to the audit function and minimize the outside
auditing fees;
3. review copies of the internal auditing reports and critically evaluate findings,
recommendations, management’s response and courses of action taken, and
review the disposition of the recommendations in the independent auditor’s
management letter;
4. review and appraise the staff’s organization regarding its auditing philosophy,
independence and logistical operations;
5. assess the quality of the auditing personnel and training to ensure that the
internal auditing function is adequately staffed;
6. assure the CAE that the audit committee supports his function in the corporate
structure and the director has access to the committee and the functional areas
within the entity, and obtain assurance that the staff is receiving the proper
cooperation from management; and
7. determine the need for specialists, such as in complex areas of accounting or
evaluation of computer security.
Terms of reference
The overall status and remit of internal audit should be formalised in terms of
reference, often referred to as an audit charter, and approved by the board,
normally through the audit committee. These should then be communicated to
relevant people within the organisation. Internal audit’s terms of reference or
charter should provide clarity about its:
• Strategy and objectives;
• Role and responsibilities within the organisation;
• Scope of work;
• Accountability to the audit committee;
• Reporting lines for line management purposes;
• Accessibility to the board and the audit committee; and
• Unfettered access to all information, people and records across the
organisation.
The terms of reference should make it clear that internal audit should not be put
in a position where it has to review its own work.
Audit approach
The audit approach taken by internal audit will largely depend on its remit and the
objective assurance that the board requires.
Audit plans
Internal audit should, on at least an annual basis, develop a plan of work that it
will cover to provide the required assurance to the audit committee and the
board. This plan should retain some flexibility to enable internal audit to respond
to new issues as they arise. The audit plan should identify how internal audit will:
• Obtain assurance on the effectiveness of the governance and risk management
processes;
• Support the development and maintenance of governance and risk
management processes;
• Challenge the board’s assessment of risk and the controls in place to manage
the identified risks;
• Evaluate and test the effectiveness of controls in place to manage the identified
risks; and
• Co-ordinate with other sources of assurance, e.g. health and safety, external
auditors, etc.
In setting the audit plan, there should be effective dialogue between the audit
committee, management, internal audit and external auditors to ensure that there
is adequate assurance from all sources to cover all key business risks. Audit
committees need to make clear their expectations that both internal and external
auditors will communicate effectively with each other about how their respective
audit plans and objectives will cover these key business risks. The IIA’s
Performance Standard 2201, Planning Considerations, states that internal
auditors, in planning their work, should consider the objectives of the activity
being reviewed, the risks related to that activity, the adequacy and effectiveness
of the activity’s risk management and control systems and the opportunities for
making significant improvements to those systems.
Communication of results
Under the IIA’s Performance Standard 2400, Communicating Results, it is
recommended that internal auditors report internally to the board, the audit
committee and management on a regular basis. Internal audit’s reports, opinions
and any recommended management actions need to be communicated in a
clear, concise, reliable and constructive way. They should demonstrate a clear
understanding of the organisation and its objectives. All significant actions need
to be communicated to the audit committee regularly, together with dates of
implementation. Where key agreed actions are not appropriately implemented by
management, there needs to be a mechanism for internal audit to investigate the
reasons why and, if necessary, escalate matters to the audit committee. It is
important for both internal and external auditors to co-operate, communicate and
share their evaluations and the results of their audit work when relevant and
subject to any confidentiality requirements. This dialogue should take place
regularly throughout the year.
External audit
Integrated audits
There are also new types of integrated auditing becoming available that use
unified compliance material (see the unified compliance section in Regulatory
compliance. Due to the increasing number of regulations and need for
operational transparency, organizations are adopting risk-based audits that can
cover multiple regulations and standards from a single audit event. This is a very
new but necessary approach in some sectors to ensure that all the
necessary governance requirements can be met without duplicating effort from
both audit and audit hosting resources.
Assessments
The purpose of an assessment is to measure something or calculate a value for
it. Although the process of producing an assessment may involve an audit by an
independent professional, its purpose is to provide a measurement rather than to
express an opinion about the fairness of statements or quality of performance.
Auditors
Internal auditors are employed by the organizations they audit. They work for
government agencies (federal, state and local); for publicly traded
companies; and for non-profit companies across all industries. The
internationally recognized standard setting body for the profession is the
Institute of Internal Auditors - IIA (www.theiia.org). The IIA has defined
internal auditing as follows: "Internal auditing is an independent, objective
assurance and consulting activity designed to add value and improve an
organization's operations. It helps an organization accomplish its objectives
by bringing a systematic, disciplined approach to evaluate and improve the
effectiveness of risk management, control, and governance
[5]
processes". Thus professional internal auditors provide independent and
objective audit and consulting services focused on evaluating whether the
board of directors, shareholders, stakeholders, and corporate executives
have reasonable assurance that the organization's governance, risk
management, and control processes are designed adequately and function
effectively. Internal audit professionals (Certified Internal Auditors - CIAs) are
governed by the international professional standards and code of conduct of
the Institute of Internal Auditors.[6] While internal auditors are not independent
of the companies that employ them, independence and objectivity are a
cornerstone of the IIA professional standards; and are discussed at length in
the standards and the supporting practice guides and practice advisories.
Professional internal auditors are mandated by the IIA standards to be
independent of the business activities they audit. This independence and
objectivity are achieved through the organizational placement and reporting
lines of the internal audit department. Internal auditors of publicly traded
companies in the United States are required to report functionally to the
board of directors directly, or a sub-committee of the board of directors
(typically the audit committee), and not to management except for
administrative purposes. As described often in the professional literature for
the practice of internal auditing (such as Internal Auditor, the journal of the
IIA) or other similar and generally recognized frameworks for management
control when evaluating an entity's governance and control practices; and
apply COSO's "Enterprise Risk Management-Integrated Framework" or other
similar and generally recognized frameworks for entity-wide risk management
when evaluating an organization's entity-wide risk management practices.
Professional internal auditors also use Control Self-Assessment (CSA) as an
effective process for performing their work.
Performance Audit
Safety, security, information systems performance, and environmental concerns
are increasingly the subject of audits. There are now audit professionals who
specialize in security audits and information systems audits. With nonprofit
organizations and government agencies, there has been an increasing need
for performance audits, examining their success in satisfying mission objectives.
Quality Audits
Quality audits are performed to verify conformance to standards through review
of objective evidence. A system of quality audits may verify the effectiveness of a
quality management system. This is part of certifications such as ISO 9001.
Quality audits are essential to verify the existence of objective evidence showing
conformance to required processes, to assess how successfully processes have
been implemented, and to judge the effectiveness of achieving any defined target
levels. Quality audits are also necessary to provide evidence concerning
reduction and elimination of problem areas, and they are a hands-on
management tool for achieving continual improvement in an organization.
To benefit the organization, quality auditing should not only report non-
conformance and corrective actions but also highlight areas of good practice and
provide evidence of conformance. In this way, other departments may share
information and amend their working practices as a result, also enhancing
continual improvement.
Project Management
Projects can undergo 2 types of Project audits:
Regular Health Check Audits: The aim of a regular health check audit is to
understand the current state of a project in order to increase project success.
Regulatory Audits: The aim of a regulatory audit is to verify that a project is
compliant with regulations and standards. Best practices of NEMEA
Compliance Center describe that, the regulatory audit must be accurate,
objective, and independent while providing oversight and assurance to the
organization.
Energy Audits
An energy audit is an inspection, survey and analysis of energy flows for energy
conservation in a building, process or system to reduce the amount of energy
input into the system without negatively affecting the output(s).
Operation Audit
An operations audit is an examination of the operations of the client's business.
In this audit the auditor thoroughly examines the efficiency, effectiveness and
economy of the operations with which the management of the entity (client) is
achieving its objective. The operational audit goes beyond the internal controls
issues since management does not achieve its objectives merely by compliance
of satisfactory system of internal controls. Operational audits cover any matters
which may be commercially unsound. The objective of operational audit is to
examine Three E's, namely Effectiveness – doing the right things with least
wastage of resources. Efficiency – performing work in least possible time.
Economy – balance between benefits and costs to run the operations
OBJECTIVE
LITERATURE REVIEW
Advantages of Auditing
COMPANY PROFILE
Noesis is a unique hospitality professional services firm in India. It offers a
complete cycle of broad-based services across a wide range of hospitality
retaining the specialist skills, attention to detail, and quality of service.
Considered by its many multi-national, national and regional clients as a
particular “safe pair of hands”, with the resources and skills to offer both, a “one
stop” service and in-depth expertise, Noesis has built up an excellent reputation
for adding value to the client.
Noesis provides Developers, Investors and corporates with a comprehensive
range of services including research, consultancy, transactions, Capital markets,
retail, education and hospitality advisory.
Client Focus:
Noesis places the client first and adopts a genuine partnering approach. From
the outset, Noesis places great emphasis on understanding the client’s current
and likely future business, alongside its challenges and opportunities. Through
this rigorous brief derivation, regular discussion and reporting, Noesis breadth of
experience enables our client to make decisions based on maximum information.
Location:
Headquartered in the Mumbai, Noesis takes care of its Western and Southern
India’s assignment from this office. Noesis Delhi office takes care of Northern
and Eastern India assignments. Noesis also works extensively internationally,
including in Thailand and the Middle East.
Neosis advisory private limited is a private company incorporated on 27 April
2010. It is classified as Indian non-government company and is registered at
registrar of companies , Delhi. Its authorized share capital is Rs. 100,000 and its
paid up capital is Rs. 100,000.
Neosis advisory private limited’s annual general meeting (AGM) was last held on
30 September 2013 and as per records from ministry of corporate affairs (MCA),
its balance sheet was last filed on 31 March 2013.
Neosis advisory private limited’s corporate identification number (CIN) , is
U67190DL2010PTC202034 and its registration number is 202034. Its registered
address is C-20 Jangpura B, New Delhi – 110014 , Delhi , India.
There are two directors of Neosis advisory private limited.
Neosis Advisory with the aim of providing a wide range of accounting and
financial services to clients in India. We are a team of chartered accountants in
India, with vast knowledge and professional experience, serving its clients and
specializes in the fields of accounting, auditing, taxation, foreign investments,
company law consultancy. software development consultancy, ISO 9000-2001
certificate consultancy.
Neosis Advisory is a team of distinguished chartered accountant, corporate
financial advisors and tax consultants in India. Our firm of chartered accountants
represents a coalition of specialized skills that is geared to offer sound financial
solutions and advices. The organization is a congregation of professionally
qualified and experienced persons who are committed to add value and optimize
the benefits accruing to clients.
Capital Market
Noesis Capital Market team advises on investment and divestment strategies
across the entire Hospitality Consultant asset classes. Capital Market team
primarily serves hospitality consultant funds, HNI’s investors, developers and
asset owners. Offer solutions based on the specific needs of the client; we take
mandate from client after understanding the investor’s objectives and assignment
in detail.
Our advice and services are backed by unparallel hospitality consultant market
knowledge, enabling clients to make a quality decision. Our in-depth coverage
ensures we offer a spread of opportunities to our clients.
The auditor has a responsibility to plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement, whether caused by error or fraud. Because of the nature of audit
evidence and the characteristics of fraud, the auditor is able to obtain
reasonable, but not absolute, assurance that material misstatements are
detected. The auditor has no responsibility to plan and perform the audit to obtain
reasonable assurance that misstatement, whether caused by errors or fraud, that
are not material to the financial statements are detected.
LIMITATIONS
The sample size is not universal , some part of other cities remained uncovered
Personal basis may be existing as the dealer of varied nature elicits the
information
RECOMMENDATION
CONCLUSION
The project was a great experience for me in order to study the marketing
aspects in the world. It was a great opportunity for me to express what I have
studied.
This industry is a place where two major players are there in the world.
APPENDICES
QUESTIONNAIRE
NEWSPAPERS: SURVEY
Q1. Name:
Q2. Age:
a.) 10-20
b.) 20-30
c.) 30-40
d.) 40-50
e.) Above 50
a.) Daily
b.) Weekly
c.) Never
a.) Yes
b.) No
a.) Advertisements
b.) Content
c.) Details
d.) Headlines
e.) Pictures
Q8. If you have heard of Pioneer, what did you like the most about it?
BIBLIOGRAPHY
REFERENCES
http://pcaobus.org/Standards/Auditing/Pages/AU110.aspx
https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&
uact=8&ved=0CDQQFjAE&url=https%3A%2F%2F1.800.gay%3A443%2Fhttp%2Fbaf.co.in%2Fauditing-advantages-
and-limitations%2F&ei=uof5U-
b5A5CTuATVxIGYBw&usg=AFQjCNFJsVVQUSJaQ59gXT8WS8dQ9-sAgQ