CA Intermediate Auditing and Ethics Classes

CA Intermediate Paper 5 — Auditing and Ethics

Auditing and Ethics is a 100-mark subjective paper in Group 2 that tests your understanding of the audit process, Standards on Auditing (SAs), company audit requirements under the Companies Act 2013, and the ICAI Code of Ethics. Under the 2023 New Scheme, the Ethics component has increased — it now carries approximately 20–25 marks.

Syllabus Breakdown

• Nature, Objective and Scope of Audit — Types of audit, audit vs investigation, auditor's responsibility framework
• Audit Strategy, Planning and Programme — Audit risk model (inherent, control, detection risk), materiality, audit documentation
• Audit Evidence — SA 500 series — sufficiency and appropriateness, audit procedures (inspection, observation, confirmation, recalculation, analytical procedures)
• Internal Control — Components of internal control (COSO framework), evaluation of internal control, EDP controls
• Vouching and Verification — Vouching of cash book, purchases, sales; verification of assets and liabilities
• Company Audit — Auditor's appointment, powers and duties under Companies Act 2013, CARO 2020 reporting requirements, audit report format
• Audit Report — SA 700, 705, 706 — unmodified vs modified audit opinion, emphasis of matter, key audit matters
• Special Areas of Audit — Bank audit, audit of NBFCs, government audit concepts
• Standards on Auditing (SA Series) — SA 200, 210, 220, 230, 240, 250, 260, 265, 299, 300, 315, 320, 330, 402, 450, 500–580, 600, 700 series
• Professional Ethics — ICAI Code of Ethics 2020, independence requirements, threats and safeguards, prohibited relationships

CARO 2020 — Consistently Tested, Often Under-Prepared

The Companies (Auditor's Report) Order 2020 (CARO 2020) has 21 matters on which the auditor must report. ICAI regularly tests 2–4 CARO matters in Paper 5 — asking whether reporting is required and what the auditor should report. Students who read CARO in full and understand the threshold for each matter score these questions; those who skim it miss 4–6 marks on predictable questions.

Ethics Is No Longer an Afterthought

Under the 2023 New Scheme, Ethics carries ~20–25 marks — enough to swing your paper score by a full grade. The ICAI Code of Ethics 2020 (Volume I: Part A — IESBA-aligned; Volume II: Part B — India-specific) is the primary source. Focus on the Five Fundamental Principles (Integrity, Objectivity, Competence, Confidentiality, Professional Behaviour), threats to independence (self-interest, self-review, advocacy, familiarity, intimidation), and the safeguards framework.