Commercial & Industrial Laws and Auditing

ICWA : Intermediate
Paper 6 : Commercial & Industrial Laws and Auditing
[One Paper: 3 hours:100 marks]

Objective . . .

•	To gain knowledge of some of important commercial and industrial laws related to business.
•	To gain working knowledge of the principles and practice of auditing and their various applications.

A. Commercial & Industrial Law ( 50 Marks)

1.	Laws of Contracts	15%
	• Essential elements of a valid simple contract. • Legal status of the various types of statements which may be made by negotiating parties. Enforceable offers and acceptances, and the application of the rules to standard form contracts and modern forms of communication. • Meaning and importance of consideration. • Principles for establishing that the parties intend their agreement to have contractual force. • How a contract is affected by a misrepresentation. • Conditions and warranties • Manner in which law controls use of exclusion clauses and unfair terms in consumer and non-consumer transactions • Level of performance sufficient to discharge contractual obligations • Valid reasons for non-performance by way of agreement, breach by the other party and frustration
2.	Laws relating to Sale of Goods	10%
	• Formation of Contract of sale • Conditions and warranties • Transfer of ownership and delivery of goods • Unpaid seller and his rights
3.	Industrial Laws	20%
	• Factories Act • Industrial Dispute Act • Workman Compensation Act • Payment of Wages Act, Minimum Wages Act • Provident Funds Act • Payment of Bonus Act • Payment of Gratuity Act • Consumer Protection Act etc
4.	Other Laws	5%
	• Limited Liability Partnership • RTI Act • Competition Commission Act • Negotiable Instruments Act. • Dissolution, Insolvency • Piecemeal Distribution

B. Auditing ( 50 Marks)

1.	Auditing Basics	10%
	• Major influences of auditing; nature and scope of auditing; basic concepts of auditing; role of evidence in auditing; auditing techniques and practices – generally accepted auditing standards; the concept of materiality in auditing. • Fixed assets, investments, inventories, debtors, loans and advances, cash and bank balances, debentures and creditors, provisions for taxation, proposed dividend and gratuity – other items in the balance sheet; verification of items in the profit and loss account; contingent liabilities; disclosure of accounting policies, practice; expenditure during the period of construction; adjustments for previous year – provisions of the Companies Act, 1956 regarding accounts. Restructure • Statistical sampling in auditing. Use of ratios and percentages for comparison and analysis trends - inter-firm and intra-firm comparison.
2.	Companies Act Provisions relating to Audits	10%
	• Auditors' appointment, remuneration, removal, rights of statutory auditors, duties of statutory auditors, joint auditors, branch audits. • report versus certificate, contents of the reports, qualifications in the report. • relevant provisions of the Companies Act, 1956 and the Income-tax Act, 1961. • Interface between statutory auditor and internal auditor. • Corporate Governance
3.	Review and Audit of Internal Control Systems	15%
	• Nature and scope of internal auditing, financial versus operational audit; concepts of efficiency audit, propriety audit, voucher audit, compliance audit, pre and post audits. • CARO • Audit Report • Internal auditing function • Planning and process of internal audit • Verification of evidence, detailed checking versus sampling plans, statistical sampling as used in internal auditing; flow chart techniques. • Internal control, nature and scope, internal auditor and internal controls. • Field work, collecting evidences, interviews; memoranda. • Audit notes and working papers. • Audit reports - techniques of effective reporting; follow up of audit report. • Summary reports of top management. • Communications in internal auditing - improving auditor-auditee relationship. • Scope of Audit Committee • Internal audit and investigation of fraud
4.	Information System Audit.	10%
5.	Introduction to Management Audit.	5%