Auditing in CA Intermediate
Paper 6 — Auditing & Assurance — is one of the most distinct papers in CA Intermediate Group 2. It is not a numerical subject and not purely law-based. It tests your understanding of audit procedures, Standards on Auditing (SAs), and professional judgment. Many students underestimate it; those who prepare it properly find it highly scoring.
Key Topic Areas
- Nature and Objectives of Auditing: Definition, types of audits, objectives, inherent limitations
- Audit Planning and Risk Assessment: SA 300 (Planning), SA 315 (Identifying risks), SA 320 (Materiality)
- Audit Evidence: SA 500 (Nature and sufficiency), SA 505 (External confirmations), SA 510 (Opening balances)
- Internal Control: Components of internal control, COSO model, reporting on internal control
- Company Audit: Appointment, qualification, disqualification of auditor (Sections 139–148 of Companies Act)
- Audit Report: SA 700, 705, 706 — types of opinions (unmodified, modified — qualified, adverse, disclaimer)
- Special Audits: Audit of banks, NBFCs, stock brokers, government audits (CAG)
- CARO 2020: All reporting requirements — memorize the list
How to Study SAs
SAs follow a consistent structure: Objective → Definitions → Requirements → Application Material → Documentation. For each SA, extract just the Objective and Requirements. This is 20% of the content but delivers 80% of the exam marks.
💡 E-mentor Planner for CA Inter Auditing: Assign one SA per day in your planner. 20 SAs in 20 days, then 5 days on CARO and Company Audit provisions, then 5 days on Special Audits. This 30-day sprint covers the subject comprehensively with daily milestone tracking.
Exam Technique
- For SA-based questions: State the SA number and name → Quote the relevant requirement → Apply to scenario → Conclude
- For CARO questions: If asked "comment as an auditor," list the specific CARO clause and what must be reported under it
- Use ICAI language: "sufficient appropriate audit evidence," "material misstatement," "going concern" — these phrases signal to examiners that you know the standards
CA Intermediate Auditing — Theory That Earns Easy Marks
CA Intermediate Auditing & Assurance (Paper 6, Group 2) is the most theory-friendly paper in CA Intermediate. Unlike Accounting or Taxation, it has very few numericals. Students with good reading comprehension and structured writing ability consistently score 60–70 marks. The entire paper is Standards on Auditing (SAs), Companies Act audit provisions, and audit reports.
Standards on Auditing at CA Intermediate Level
The following SAs are most frequently tested at Intermediate level:
- SA 200: Overall objectives of the independent auditor — foundational theory
- SA 230: Audit documentation — what goes into the audit file, purpose
- SA 300: Planning an audit of financial statements
- SA 315: Identifying and assessing risks of material misstatement
- SA 320: Materiality in planning and performing an audit
- SA 500: Audit evidence — sufficiency and appropriateness
- SA 700: Forming an opinion and reporting on financial statements
- SA 705: Modifications to the opinion in the independent auditor's report
Types of Audit Opinions — Master These
- Unmodified Opinion: Financial statements give true and fair view
- Qualified Opinion: Material but not pervasive misstatement or inability to obtain evidence
- Adverse Opinion: Financial statements do NOT give true and fair view (pervasive misstatement)
- Disclaimer of Opinion: Unable to obtain sufficient audit evidence, effect is material and pervasive
Examiners love questions like: "In the following circumstances, what opinion would you give and why?" Structure your answer: Identify the issue → Apply the SA standard → State the opinion type → Explain why it's not adverse/qualified → Draft the relevant paragraph.
Company Audit Under Companies Act 2013
- Auditor appointment, eligibility, disqualification — Sections 139–141
- Removal of auditor — Section 140, NCLT role
- Auditor's duties and powers — Section 143
- CARO 2020 — applicability and reporting requirements
- Audit under Section 138 (Internal Audit mandate for certain companies)
Writing Auditing Answers Effectively
Every audit theory answer gains marks from: citing the SA number, stating the requirement as written, and then applying it. Write short paragraphs or bullet points — long prose without structure loses marks. Practice writing 10-mark answers in 18–20 minutes maximum.
📎 Official Resources
