IGNOU ECO 12 Free Solved Assignment 2022-23, IGNOU ECO 12 ELEMENTS OF AUDITING Free Solved Assignment 2022-23 If you are interested in pursuing a course in radio production and direction, IGNOU ECO 12 can be an excellent choice. In this article, we will take a closer look at what IGNOU ECO 12 is all about and what you can expect to learn from this course.

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IGNOU ECO 12 Free Solved Assignment 2022-23 is a course offered by the Indira Gandhi National Open University (IGNOU) under the School of Journalism and New Media Studies. As the name suggests, it is a course on “Production and Direction for Radio.” The course is designed to provide students with a comprehensive understanding of radio production and direction and covers various topics related to this field. IGNOU ECO 12 Free Solved Assignment 2022-23

IGNOU ECO 12 Free Solved Assignment 2022-23

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Q1. Explain the terms “Internal Control”, “Internal Check” and “Internal Audit”. What are the requisites of a good internal control system?

Internal Control refers to the policies, procedures, and practices implemented by an organization to ensure that its operations are conducted efficiently, effectively, and in compliance with applicable laws and regulations. It involves the measures taken by management to protect the organization’s assets, ensure the accuracy and completeness of financial records, and prevent fraud and error.

Internal Check refers to the process of verifying and reconciling transactions and records within an organization to ensure that they are accurate, complete, and valid. It involves the use of checks and balances to detect errors, prevent fraud, and ensure that controls are working effectively.

Internal Audit refers to the independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. Internal auditors evaluate the effectiveness of an organization’s internal controls and provide recommendations for improvement.

The requisites of a good internal control system are:

• Clearly defined policies and procedures: An effective internal control system should have clear policies and procedures that are communicated to all employees and stakeholders.
• Separation of duties: Duties should be segregated to prevent any one person from having too much control over a process or transaction.
• Authorization and approval: Proper authorization and approval processes should be in place to ensure that transactions are valid and legitimate.
• Adequate documentation: All transactions should be properly documented, and records should be retained for an appropriate period.
• Physical safeguards: Physical safeguards should be in place to protect the organization’s assets from theft, damage, or misuse.
• Monitoring and review: An effective internal control system should be monitored and reviewed regularly to ensure that it is working effectively and efficiently.
• Adequate training and communication: Employees should be trained on internal control policies and procedures and be aware of their responsibilities to ensure compliance with the system.

By incorporating these requisites into its internal control system, an organization can effectively manage risk, ensure compliance, and protect its assets.

Q2. Discuss the process of verification and valuation of investments in a company.

The auditor in a company is responsible for verifying the accuracy and validity of the company’s financial statements and ensuring that the company is compliant with applicable laws and regulations. The auditor is typically an independent third-party that is hired by the company’s board of directors to perform an objective evaluation of the company’s financial performance and reporting.

To protect the rights of shareholders, the auditor must conduct a thorough and independent audit of the company’s financial statements. This includes reviewing the company’s accounting policies, procedures, and practices to ensure that they are in compliance with relevant accounting standards and principles.

The auditor should also review the company’s internal controls and risk management systems to identify any potential fraud or irregularities. If the auditor identifies any issues or discrepancies, they should report these to the company’s board of directors and management, as well as to the relevant regulatory authorities.

In addition, the auditor should communicate with shareholders about the audit process and any significant findings or concerns. This can help to build trust and transparency with shareholders and ensure that they have accurate and reliable information about the company’s financial performance.

Overall, the auditor plays an important role in protecting the rights of shareholders by providing independent and objective assurance about the accuracy and validity of the company’s financial statements and ensuring that the company is compliant with applicable laws and regulations.

Q4. What is cost audit? What are its objectives? State the advantages and limitations of cost audit.

Cost audit is an independent and systematic examination of a company’s cost accounting records and procedures to ensure that they are accurate, complete, and comply with legal and regulatory requirements. The main objective of cost audit is to identify and eliminate cost inefficiencies, reduce production costs, and improve the overall financial performance of a company.

The primary objectives of cost audit are as follows:

• To verify the accuracy and completeness of cost accounting records and financial statements.
• To identify and eliminate cost inefficiencies and wastages.
• To determine whether the company is complying with legal and regulatory requirements.
• To suggest measures to improve the cost-effectiveness of the company’s operations.

The advantages of cost audit are:

• Cost audit helps in identifying and eliminating wastages and inefficiencies, which results in cost reduction.
• It ensures compliance with legal and regulatory requirements, which helps in avoiding penalties and fines.
• Cost audit helps in improving the overall financial performance of the company.
• It helps in identifying areas for improvement in the company’s operations.

The limitations of cost audit are:

• Cost audit can be time-consuming and expensive.
• It may not always provide accurate results, as it is dependent on the quality of the cost accounting records.
• Cost audit may not be suitable for small and medium-sized enterprises due to their limited resources.
• Cost audit may not be able to capture all the costs incurred by the company, as some costs may not be easily quantifiable or may be hidden.

In conclusion, cost audit plays a crucial role in improving a company’s financial performance by identifying and eliminating inefficiencies and wastages. However, it is important to weigh the advantages and limitations of cost audit before deciding to undertake it.

Q5. Write short notes on the following:

(a) Auditing Standards

Auditing Standards are a set of guidelines and principles that auditors are required to follow when performing an audit. The standards are designed to ensure that audits are conducted with integrity, objectivity, and professionalism, and that the auditor obtains sufficient evidence to support their conclusions and opinions.

There are several different sets of auditing standards that auditors may be required to follow depending on the type of audit being conducted and the jurisdiction in which they are operating. Some of the most commonly recognized auditing standards include:

• International Standards on Auditing (ISA) – developed by the International Auditing and Assurance Standards Board (IAASB) and widely used in many countries around the world.
• Generally Accepted Auditing Standards (GAAS) – developed by the American Institute of Certified Public Accountants (AICPA) and used in the United States.
• Public Company Accounting Oversight Board (PCAOB) Auditing Standards – developed by the PCAOB and used in audits of public companies in the United States.
• Canadian Auditing Standards (CAS) – developed by the Canadian Institute of Chartered Accountants (CICA) and used in Canada.

Some of the key principles that are included in auditing standards include the need for auditors to maintain independence from the organization being audited, to exercise professional skepticism and judgment when evaluating evidence, and to obtain sufficient and appropriate evidence to support their opinions.

Auditing standards also include guidance on the planning and execution of audits, including the use of risk assessment procedures, the design of audit procedures, and the documentation of audit work. Additionally, standards address the reporting of audit findings and the communication of significant issues to management and other stakeholders.

(b) Clear Report and Qualified Report

Clear report and qualified report are two types of audit reports issued by auditors at the conclusion of an audit.

A clear report is an unqualified audit report, which means that the auditor has reviewed the financial statements and found them to be free from material misstatements or errors. In other words, the financial statements are deemed to be fairly presented in accordance with the applicable accounting framework (such as GAAP or IFRS). A clear report indicates that the auditor has no reservations or concerns about the financial statements and has full confidence in their accuracy.

On the other hand, a qualified report is issued when the auditor has identified one or more issues with the financial statements that do not comply with the accounting standards or regulations. These issues may include incomplete or inadequate disclosures, material misstatements, or limitations on the scope of the audit. A qualified report contains an explanation of the reason(s) for the qualification and a statement that the financial statements are not presented fairly in accordance with the accounting standards or regulations.

In summary, a clear report indicates that the financial statements are free from material misstatements or errors and comply with the applicable accounting framework, while a qualified report indicates that there are issues with the financial statements that need to be addressed.

(c) Continuous Audit

Continuous audit is an auditing approach that uses technology to automate the audit process and provide real-time monitoring of financial transactions. Instead of conducting periodic audits, a continuous audit system monitors financial transactions on an ongoing basis to detect errors, fraud, or irregularities.

Continuous audit uses technology such as data analytics, artificial intelligence, and machine learning to automatically collect, process, and analyze financial data. The system generates alerts when it detects any anomalies, which auditors can investigate further.

Continuous audit offers several benefits, including increased accuracy and efficiency, reduced risk of fraud and errors, and timely identification of issues. It also enables auditors to focus on high-risk areas and provide timely feedback to management.

However, implementing a continuous audit system can be challenging and requires a significant investment in technology and infrastructure. It also requires skilled auditors who can analyze the data generated by the system and provide meaningful insights to management.

(d) Importance of Vouching

Vouching is a crucial auditing technique used to test the accuracy and completeness of financial transactions. It involves examining documentary evidence to determine whether the transactions recorded in the accounting system are valid and supported by appropriate documentation.

Vouching is important for several reasons:

• Detecting errors and fraud: By reviewing documents, auditors can detect errors and fraud in the accounting system. Vouching helps to identify fictitious transactions, duplicate payments, and other irregularities.
• Ensuring compliance: Vouching helps to ensure that transactions are in compliance with applicable laws and regulations. By verifying that transactions are supported by appropriate documentation, auditors can ensure that the organization is following the proper procedures.
• Enhancing financial reporting accuracy: Vouching helps to ensure that financial statements accurately reflect the organization’s financial position. By ensuring that transactions are properly recorded, auditors can enhance the accuracy and completeness of financial reporting.
• Improving internal controls: Vouching helps to identify weaknesses in internal controls. By identifying areas where controls are weak, auditors can make recommendations for improving controls and reducing the risk of errors and fraud.

Overall, vouching is an important tool that auditors use to ensure the accuracy and completeness of financial transactions, enhance financial reporting accuracy, and improve internal controls.

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