CA Intermediate Auditing Notes, Paper 5

The CA Intermediate Auditing Notes are designed to provide students with a clear and brief summary of the key concepts and principles covered in this paper. CA intermediate auditing notes to help them develop the knowledge and skills necessary to succeed in the exam.


CA Inter Notes

Marks Weightage

Download

MTPs

Download

RTPs

Download

MCQs

Download

Practice Questions

Download

Others

Download

Handwritten Notes

Download

Past Papers

Download

Detailed Notes

Download

Chart Book

Download

Summary Notes

Download

Amendment Notes

Download

Get ready to excel in the CA Intermediate Auditing and Ethics paper with our all-inclusive preparation notes. This exhaustive CA Intermediate Auditing Notes includes:

  • Subject-wise marks weightage
  • Detailed syllabus
  • Study materials for in-depth learning
  • Revision Test Papers (RTP)
  • Mock Test Papers (MTP)

Our complete package provides everything you need to prepare and perform exceptionally well in the CA Intermediate Auditing and Ethics exam.

CA Intermediate Auditing and Ethics Syllabus

CA Intermediate Syllabus 2025 Auditing and Ethics
Topics Sub Topics
Nature, Objective, and Scope of Audit Auditing Concepts:
  • Origin of Auditing,
  • Meaning of Audit,
  • Need for Audit (Benefits of Audit), Objective of the Audit, Scope of Audit, External Audit engagements,
  • Qualities of Auditor
  • Inherent Limitations of an Audit; Relationship of auditing with other disciplines.
  • (SA 200: Overall Objectives of the Independent Auditor and the Conduct of an Audit following Standards on Auditing)
Audit Strategy, Audit Planning, and Audit Program:
  • The auditor’s responsibility is to plan an audit of financial statements. Benefits of audit planning.
  • Planning is a continual and iterative process.
  • Discussion of elements of planning with the entity’s management.
  • Involvement of Key Engagement Team Members in planning the audit. Preliminary engagement activities.
  • The auditor’s consideration of client continuance and ethical requirements. Planning activities.
  • Establishing an overall audit strategy: assistance for the auditor. Development of an audit plan.
  • Documenting the overall audit strategy and audit plan; audit program.
  • Development of Audit Plan and Program
Risk Assessment and Internal Control: Audit Risk.
  • Risk of Material Misstatement, Inherent Risk and Control Risk, and Detection Risk.
  • Sampling and Non-Sampling Risk.
  • Concept of Materiality, Materiality in Planning and Performing an Audit.
  • The auditor’s responsibility is to apply the concept of materiality.
  • An auditor’s determination of materiality is a matter of professional judgment. Materiality and Audit
  • Risk.
  • Application of materiality in planning and performing the audit. Concept of Performance Materiality.
  • Determining materiality and performance materiality when planning the audit.
  • Use of Benchmarks in determining materiality for the financial statements as a whole. Materiality level or levels for particular classes of transactions, account balances, or disclosures.
  • Revision in materiality as the audit progresses. Documenting the Materiality.
(SA 320 Materiality in Planning and Performing an Audit).
  • Identifying and Assessing the Risk of Material Misstatement, Risk Assessment procedures.
  • Understanding the entity and its environment; Internal control.
  • Documenting the Risks.
  • Evaluation of internal control system.
  • Testing of Internal control; Internal Control and IT Environment (SA 315 Identifying and Assessing the
  • Risks of Material Misstatement Through Understanding the Entity and Its Environment).
Digital Audit
  • Key features
  • Impact of IT-related Risks
  • Impact on Controls
  • Internal Financial Controls as per Regulatory requirements
  • Types of Controls
  • Audit approach
  • Understanding and documenting Automated environment
  • Testing methods, data analytics for audit, assessing and reporting audit findings.
Audit Evidence
  • Meaning of Audit Evidence.
  • Relevance and Reliability of Audit Evidence
  • Sufficient appropriate audit evidence
  • Meaning of Assertions
  • Assertions contained in the Financial Statements. Source of audit evidence
  • Test of controls
  • Substantive Procedures- Test of details and Substantive analytical procedures, Audit procedures for obtaining audit evidence.
  • Evaluation of Audit Evidence (SA 500 Audit Evidence), Audit Trail
(Using the work of Internal Auditors – SA 610)
Internal audit function.
  • External Auditor’s Responsibility for the audit, Evaluating the internal audit function.
  • Basics of Internal Financial Control and reporting requirements. The distinction between Internal Financial Control and Internal Control over Financial Reporting.
  • Audit Sampling: (SA 530 Audit Sampling). Meaning of Audit Sampling.
  • Designing an audit sample; Types of sampling (Approaches to Sampling).
  • Sample Size and selection of items for testing; Sample selection method.
  • Obtaining evidence of the existence of inventory; Audit procedure to identify litigation & claims.
  • Obtaining evidence regarding the presentation and disclosure of segment information
  • (SA 501 Audit Evidence – Specific Considerations for Selected Items)
  • External confirmation procedures.
  • Management’s refusal to allow the auditor to send a confirmation request; Negative Confirmations (SA 505 External Confirmations); Audit evidence about opening balances; Accounting policies relating to opening balances; Reporting with regard to opening balances (SA 510 Initial Audit Engagements-Opening Balances)
  • Meaning of Related Party; Nature of Related Party Relationships & Transactions; Understanding the Entity’s Related Party Relationships & Transactions (SA 550 Related Parties)
  • Analytical Procedures.
  • Meaning, nature, purpose, and timing of analytical procedures; Substantive analytical procedures.
  • Designing and performing analytical procedures prior to Audit.
  • Investigating the results of analytical procedures (SA 520 Analytical Procedures)
Audit of Items of Financial Statements
  • Audit of sale of Products and Services; Audit of Interest Income, Rental Income, Dividend Income, Net gain/loss on sale of Investments, etc.
  • Audit of Purchases, Employee benefits expenses, Depreciation, Interest expense, Expenditure on Power and fuel, Rent, Repair to building, Repair to Machinery, Insurance, Taxes, Travelling Expenses, Miscellaneous Expenses, etc.
  • Audit of Share Capital, Reserve and surplus, Long-term Term Borrowings, Trade Payables, Provisions, Short-term Term Borrowings, and other Current Liabilities.
  • Audit of Land, Buildings, Plant and equipment, Furniture and fixtures, Vehicles, office equipment, Goodwill, Brand/Trademarks, Computer Software, etc.
  • Audit of Loans and advances, Trade Receivable, Inventories, Cash and cash Equivalent, and Other Current Assets. Audit of Contingent Liabilities. (The list of items is illustrative only.)
Audit Documentation
  • Concept of Audit Documentation
  • Nature & Purpose of Audit Documentation; Form, Content & Extent of Audit Documentation. Completion Memorandum.
  • Ownership and custody of Audit Documentation (SA 230 Audit Documentation).
Completion and Review
  • Meaning of Subsequent Events;
  • Auditors’ obligations in different situations of subsequent events.
  • Procedures for subsequent events. (SA 560 Subsequent Events).
  • Responsibilities of the Auditor with regard to Going Concern Assumption; Objectives of the Auditor
  • regarding Going Concern.
  • Events or Conditions that may cast doubt about the Going Concern Assumption.
  • Audit Procedures when events or conditions are identified (SA 570 Going Concern). Overview and
  • Introduction of Evaluations of Misstatements identified during the audit (SA 450).
  • Written Representations as Audit Evidence.
  • Objective of Auditor regarding Written Representation.
  • Management from whom Written Representations may be requested.
Audit Report
  • Forming an opinion on the Financial Statements.
  • Auditor’s Report- basic elements (SA 700 Forming an Opinion and Reporting on Financial Statements).
  • Communicating key Audit Matters in the Independent Auditor’s Report (SA 701) Types of Modified Opinion, Circumstances When a Modification to the Auditor’s Opinion is Required, Qualified, Adverse Disclaimer of Opinion (SA 705 Modification to the Opinion in the Independent Auditor’s Report).
  • SA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report.
  • Nature of Comparative Information.
  • Corresponding Figure; Comparative Financial Statements (SA 710 Comparative Information – Corresponding Figures and Comparative Financial Statements).
  • Branch audit; Joint audit; Reporting requirements under the Companies Act, 2013, including CARO
Special Features of Audit of Different Types of Entities
  • Appointment of Auditor,
  • Audit Procedure and Audit Report in respect of different Category of Entities
  • Government; Local bodies; Not-for-profit organizations; Trust and Societies, Partnership Firms
  • Audit of different types of undertakings, i.e., Educational Institutions, Hotels, Clubs, Hospitals, etc.
  • Basics of Limited Liability Partnerships (LLPs) Audit and Co-operative Societies Audit.
Audit of Banks
  • Understanding of accounting systems in Banks
  • Audit Approach
  • Audit of Revenue items,
  • Special Consideration in Bank Audit with emphasis on Advances and NPAs
Ethics and Terms of Audit Engagements
  • Meaning of Ethics. – Ethics is a State of Mind, Need for Professional Ethics.
  • Principles-based approach v Rules-based approach (Ethical or Legal). 
  • The fundamental principles of Professional Ethics: Integrity;
  • Objectivity; Professional Competence and Due care; Confidentiality; Professional Behaviour.
  • Independence of Auditors.
  • Threats to Independence: Self-interest threats, Self Review threats, Advocacy threats, Familiarity threats, Intimidation threats.
  • Safeguards to Independence; Professional Scepticism, Terms of Audit Engagements Preconditions for an audit; Audit Engagement
  • Agreement on Audit Engagement Terms
  • Terms of Engagement in Recurring Audits (SA 210 Agreeing the Terms of Audit Engagements)
  • Overview and Introduction of SQC 1 Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information and Other Assurance and Related Services Engagements
  • Overview and Introduction of SA 220 (Quality Control for an Audit of Financial Statements).

 

Types of Audits

Audits are broadly categorized as:

  1. Statutory Audit: Mandated by law (e.g., Companies Act, 2013).

  2. Internal Audit: Performed to evaluate internal controls and operational efficiency.

  3. Tax Audit: Conducted as per the Income Tax Act, 1961.

  4. Cost Audit: Examines cost records and compliance with cost accounting standards.

  5. Management Audit: Focuses on evaluating managerial decisions and operations. 

CA Inter Auditing and Ethics Weightage skills wise

To excel in CA Intermediate, develop a comprehensive note-making strategy by compiling a list of potential questions that may be asked in the exam, categorized by types such as define, describe, explain, recognize, identify, classify, and discuss, which account for 30%–55% of the exam paper's weightage. 

For CA Intermediate second-level assessment, practice the prescribed format of ICAI for application and analysis skills. Practice a lot of questions, having calculated, determined, solved, computed, identified, and reconciled kinds of queries to excel in this skill. For application and analytical skills, weightage in your marks will be around 45%–70%.

Subject: Cost and Management Accounting Nature of Questions Weightage
Comprehension and Knowledge
  • Definition
  • Describe the process
  • Explain the concept
  • Discussing a provision of law
  • Listing the Condition
  • Classify
 30%-55%
Application and Analytical
  • Computation/calculation/estimation
  • Examining Issue
  • Reconciling the statements
  • Identifying the nature of income and expenditure
  • Calculating profit and loss
  • Solving Problems by integrating the provision
 40%-70%

CA Intermediate Auditing and Ethics Study Material 

CA Inter Auditing and Ethics Preparation Tips 

CA Inter Auditing and Ethics is a crucial paper that requires a strategic approach to preparation. Here are some valuable tips to help you excel in this paper:

  1. Practice Case Studies: Case studies are an essential part of the Auditing and Ethics paper. Practice solving case studies to improve your analytical skills.

  2. Focus on Ethics: Ethics is a significant part of the paper. Study the Code of Ethics issued by the ICAI and practice applying ethical principles to case studies.

  3. Make Notes: Make notes on important topics, including auditing procedures, auditing standards, and ethics. Review your notes regularly.

  4. Practice mock tests: Practice mock tests to assess your knowledge and identify areas for improvement.

Stay Updated: Stay updated with the latest developments in auditing and ethics. Read articles and attend webinars to stay informed.



Frequently Asked Questions


What is the importance of auditing notes in CA Intermediate?

Auditing notes are crucial for CA Intermediate students as they provide a comprehensive understanding of auditing concepts, principles, and procedures. These notes help students prepare for the exams and develop their analytical and problem-solving skills.

What are the key topics covered in CA Intermediate auditing notes?

CA Intermediate auditing notes cover various topics, including auditing standards, auditing procedures, internal control, audit sampling, and audit reporting. These notes also cover the Code of Ethics and professional standards for auditors.

How can I make effective auditing notes for CA Intermediate?

To make effective auditing notes, start by reading the recommended study materials and making notes on important topics. Use headings, subheadings, and bullet points to organize your notes. Review and revise your notes regularly to reinforce your understanding.

How can I practice auditing questions using CA Intermediate auditing notes?

To practice auditing questions, start by reading the auditing notes and making a list of important topics. Then, practice solving auditing questions from the study materials, practice manuals, or online resources. Use the auditing notes to review and reinforce your understanding of the concepts.

Can I prepare for CA Intermediate auditing without coaching?

While coaching can provide guidance and support, it's possible to prepare for CA Intermediate auditing without coaching. Use the recommended study materials, auditing notes, and online resources to prepare for the exams. Practice solving auditing questions and case studies to develop your analytical and problem-solving skills.

How can I stay updated with the latest developments in auditing for CA Intermediate?

To stay updated with the latest developments in auditing, read the Institute of Chartered Accountants of India (ICAI) publications, such as the Chartered Accountant Journal. Attend webinars, seminars, and workshops on auditing topics. Use online resources, such as auditing blogs and websites, to stay informed.

What is the weightage of auditing in the CA Intermediate exams?

Auditing carries a significant weight in the CA Intermediate exams. The auditing paper is divided into two parts: auditing and ethics. Auditing carries a weightage of around 70-80% of the total marks.

Can I use auditing notes from other institutes for CA Intermediate?

While auditing notes from other institutes may provide a general understanding of auditing concepts, it's essential to use the study materials and notes recommended by the ICAI for CA Intermediate. The ICAI notes are tailored to the CA Intermediate syllabus and exam pattern.

How can I revise auditing notes for CA Intermediate effectively?

To revise auditing notes effectively, start by reviewing the notes regularly. Use flashcards to reinforce your understanding of key terms and concepts. Practice solving auditing questions and case studies to apply your knowledge. Use the auditing notes to review and reinforce your understanding of the concepts.


Ad Ad Ad

Related Articles