Para 2.6.22 — MSO

Systems Approach Audit approach and procedures 2.6.22 The same systems approach should be adopted in regard to audit of accounts and of transactions of any institution regardless of whether the audit is undertaken as a sole auditor or otherwise. As the first step, the adequacy of various accounting systems and procedures, whether set out in the form of a manual or otherwise, should be examined and the extent of check of individual transactions should be determined based on the results of such examination. This is all the more necessary since generally only a small percentage of the transactions is checked in audit and Audit cannot escape responsibility if significant deficiencies in the accounting systems and procedures lead to misuse or abuse of public monies Though Audit cannot insure against defalcation and frauds, the possibility of their occurrence should be duly kept in mind while preparing for and conducting audit.