Вы находитесь на странице: 1из 28

INTRODUCTION

Auditing refers to a systematic and independent examination of books, accounts, documents and
vouchers of an organization to ascertain how far the financial statements present a true and fair
view of the concern. It also attempts to ensure that the books of accounts are properly maintained
by the concern as required by law. Auditing has become such a ubiquitous phenomenon in the
corporate and the public sector that academics started identifying an "Audit Society". [1] The
auditor perceives and recognizes the propositions before him/her for examination, obtains
evidence, evaluates the same and formulates an opinion on the basis of his judgment which is
communicated through his audit report.
M/s. S R Batliboi & Co. LLP, Chartered Accountants and M/s. Kirtane & Pandit LLP, Chartered
Accountants, the Joint Statutory Auditors of the Company, hold office up to the conclusion of the
ensuing annual general meeting of the Company. The Board of Directors recommends re-
appointment and fixing of remuneration of M/s. S R Batliboi & Co. LLP, Chartered Accountants
and M/s. Kirtane & Pandit LLP, Chartered Accountants as the joint statutory auditors of the
Company from conclusion of the ensuing Annual General Meeting till conclusion of the next
Annual General Meeting.

1
OBJECTIVE OF THE STUDY:

Our main objective is to know about audit in insurance company.


To know about auditors of the insurance company.

The main aim of the present study is to accomplish the following objectives:

1. Primary Objective:

To study and analyze the Audit in Insurance Company.

2. Secondary Objective:

To know the present Board of Directors of the Companies.

To know the reasons to know more about audit report and financial statement of the
insurance companies.

RESEARCH METHODOLOGY:

RESEARCH
1) To know the consumer responses about Bajaj Allianz life insurance policy.
2) To know about the products of Bajaj Allianz Life Insurance.
3) To know the audit report of Bajaj Allianz Life Insurance.
4) To know the competitors of Bajaj Allianz Life Insurance

METHODOLOGY
The objective of the present study can be accomplished by conducting a systematic
market research. Market research is the systematic design, collection, analysis and reporting of
data and findings that are relevant to different marketing situations facing the company. The
marketing research process that will be adopted in the present study will consist of the following
stages:

2
a. Defining the problem and the research objective:
The research objective states what information is needed to solve the problem. The
objective of the research is to derive the opinion of the users and opinion of the potential
customers.
b. Developing the research plan:
Once the problem is identified, the next step is to prepare a plan for getting the
information needed for the research. The present study will adopt the exploratory approach
wherein there is a need to gather large amount of information before making a conclusion. If
required, the descriptive and casual approaches may also be used.
c. Collection and Sources of data:
Market research requires two kinds of data, i.e., primary data and secondary data. Being a
firm in financial services, data gathering will involve usage of both primary and secondary data
though there Will be an extensive usage of primary data. Well-structured questionnaires will be
prepared for both the existing and potential customers. There will be personal interview surveys
mostly in-home (door-to-door) surveys. The questionnaires will contain both open-ended and
close-ended questions. Here, open-ended questions will be more useful, as it is an exploratory
research being conducted, wherein the main objective is to get an insight into how investors
think. Secondary data will be collected from various journals, books and web sites.

d. Analyze the collected information: This involves converting raw data into useful information.
It involves tabulation of data, using statistical measures on them for developing and calculating
the averages.
e. Report research findings:
This phase will mark the culmination of the marketing research effort. The report with the
research findings is a formal written document. The research findings and personal experience
will be used to propose recommendations to develop the performance of the organization.

3
NEED OF THE STUDY:
To analyze the concept of Audit in Insurance Company analysis towards insurance. First a
sample survey should be done on these things to know the How to audit in Insurance
Company in this regard and by this the satisfactory levels of the existing investors who have
already invested in life insurance.

1) We will get Know about Bajaj Allianz Life Insurance.

2) We can know about Audit Report.

3) We can know about the SWOT ANALYSIS of Bajaj Allianz Life Insurance

4) We can know about financial position of Bajaj Allianz Life Insurance for the year 2014-15.

DATA COLLECTION:

SECONDARY DATA SOURCES:


Through Internet, various official sites of the companies.
Through pamphlets and brochures of the companies.
Journals & Magazine

LIMITATIONS OF THE STUDY:


1) The time is not sufficient to meet all the investors.
2) Respondents suggestions may or may not be correct.
3) Researchers dont have experience.
4) Factors considered in the questionnaire may or may not be Sufficient.
5) Sample size is too low to get the proper information.
6) As many customers are not willing to give their opinions, we are unable to
Get Proper information.
7) Opinions of investors may vary by time.

4
Bajaj Alliance Life Insurance Co. Ltd
Bajaj Alliance Life Insurance Co. Ltd is a joint venture between two leading
Conglomerates Allianz AG, one of the worlds largest insurance companies, and Bajaj Auto,
one of the biggest two and three wheeler manufacturers in the world. Bajaj Allianz is one of
Indias leading private life insurance companies. It stands 2 nd among the private Insurance
companies in India and 3rd among the Insurance companies in India. It is one of the fastest
growing private life insurance companies in India. Bajaj Allianz currently has over
300,000satisfied customers. They are even backed by a network of 155 offices spanning the
country.
Bajaj Allianz General Insurance Company Limited, one of India's leading private general
insurance companies, reported a 50 percent increase in gross premium income to 12,850 million
rupees (234 million Euros) excluding service tax for its business year 2005-6, ending March 31.
Net profit grew 9.8 percent to 516 million rupees (9 million Euros).
Bajaj Allianz General Insurance is aiming for accelerated market penetration in future. "Going
forward, the company's focus will continue to be on growth with underwriting profits, and
preparing ourselves for the free pricing scenario from 2007 onwards," said Kamesh Goyal, CEO.
The company, a joint venture company between Bajaj Auto Limited, a leading Indian
manufacturer of two- and three-wheeler vehicles and the Allianz Group, issued 3.9 million
policies over the twelve-month period, the highest rate among private insurers. Its claim
settlement ratio reached 93 percent.
Bajaj Allianz Life wins new business Bajaj Allianz Life Insurance, meanwhile, reported a 216
percent increase in new business premium to 505 million Euros in its business year 2005-6. The
company, which is now Indian's leading life insurance company, said its industry market share
grew to 7.6 percent from 3.4 percent in the previous year. It aims to become India's first

5
profitable life insurance company soon, by employing an innovative economic model & keeping
costs low. It issued 777,492 new policies in fiscal 2005-6.

Bajaj Allianz Life Insurance

Is the fastest growing private life insurance company in India.


Currently has over 3,00,000 satisfied customers
We have customer care centers in 155 cities with 28000 Insurance Consultant providing
the finest customer service.
One of India's leading private life insurance companies
Competitors

birla sun life insurance


hdfc standard life
sbi life insurance
tata aig insurance
icici prudential
lic
icici lombard
metlife india life insurance
new india assurance company
kotak life insurance
Products
Units Gain Insurance

Term Care Plans

Lifetime Care Insurance Policy

Business Insurance Policies

Savings and Security Policies for You and your family

6
Healthcare Insurance

Pension Plus

Audit in Bajaj Allianz Life Insurance Company Limited


2015-16

Auditors
Statutory auditors
M/s. S R Batliboi & Co. LLP, Chartered Accountants and M/s. Kirtane & Pandit LLP, Chartered
Accountants, the Joint Statutory Auditors of the Company, hold office up to the conclusion of the
ensuing annual general meeting of the Company. The Board of Directors recommends re-
appointment and fixing of remuneration of M/s. S R Batliboi & Co. LLP, Chartered Accountants
and M/s. Kirtane & Pandit LLP, Chartered Accountants as the joint statutory auditors of the
Company from conclusion of the ensuing Annual General Meeting till conclusion of the next
Annual General Meeting.

Secretarial auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Companies
(Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has
appointed Mr. Shyamprasad Limaye (Membership No. 1587), Company Secretary in Practice to
undertake the Secretarial Audit of the Company. The Secretarial Audit report for the financial
year ended on March 31st 2015 is annexed to the report.

7
Financial Statements

Independent Auditors Report


To the Members of
Bajaj Allianz Life Insurance Company Limited

Report on the Standalone Financial Statements


We have audited the accompanying standalone financial statements of Bajaj Allianz Life
Insurance Company Limited (the Company), which comprise the Balance Sheet as at March
31, 2015, the related Revenue Account (also called the Policyholders Account or the
Technical Account), the Profit and Loss Account (also called the Shareholders Account or
Non-Technical Account) and the Receipts and Payments Account for the year then ended, and
a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Standalone Financial Statements


The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the
Companies Act, 2013 (the Act) with respect to the preparation of these standalone financial
statements that give a true and fair view of the Balance Sheet, the related Revenue Account, the
Profit and Loss Account and the Receipts and Payments Account of the Company in accordance
with accounting principles generally accepted in India, including the provisions of the Insurance
Act, 1938 (the Insurance Act) (amended by the Insurance Laws (Amendment) Act, 2015), the
Insurance Regulatory and Development Authority Act, 1999 (the IRDA Act), the Insurance
Regulatory and Development Authority (Preparation of Financial Statements and Auditors
Report of Insurance Companies) Regulations, 2002 (the IRDA Financial Statements
Regulations), orders/directions/ circulars issued by the Insurance Regulatory and Development
Authority (the IRDA) in this regard, and the Accounting Standards specified under Section 133
of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

8
This responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, the relevant to
the preparation and presentation of the financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.

9
Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We
have taken into account the provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the provisions of the Act and
Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the Companys preparation of the financial statements that give a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on whether the Company has in place an adequate
internal financial controls system over financial reporting and the operating effectiveness of such
internal controls. An audit also includes evaluating the appropriateness of the accounting policies
used and the reasonableness of the accounting estimates made by the Companys Directors, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion on the Standalone financial statements.

10
Independent Auditors Certificate

This certificate is issued to comply with the provisions of paragraphs 3 and 4 of Schedule C of
the Insurance Regulatory and Development Authority (Preparation of Financial Statements and
Auditors Report of Insurance Companies) Regulations 2002, (the Regulations) read with
regulation 3 of the Regulations.
Management of the Company is responsible for complying with the provisions of The Insurance
Act, 1938 (the Insurance Act), the Insurance Regulatory and Development Authority Act, 1999
(the IRDA Act), the Insurance Regulatory and Development Authority (Preparation of
Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 (the
IRDA Financial Statements Regulations), orders/directions issued by the Insurance Regulatory
and Development Authority (the IRDA) which includes the preparation of the Management
Report. This includes collecting, collating and validating data and designing, implementing and
monitoring of internal controls suitable for ensuring compliance as aforesaid.
Our responsibility, for the purpose of this certificate, is limited to certifying matters contained in
paragraphs 3 and 4 of Schedule C of the Regulations. We conducted our examination in
accordance with the Guidance Note on Audit Reports and Certificates for Special Purposes
issued by the Institute of Chartered Accountants of India (the ICAI).
In accordance with the information and explanations given to us and to the best of our
knowledge and belief and based on our examination of the books of account and other records
maintained by Bajaj Allianz Life Insurance Company Limited (the Company) for the year
ended March 31, 2015, we certify that:
1. We have reviewed the Management Report attached to the financial statements for the
year ended March 31, 2015, and on the basis of our review, there is no apparent mistake
or material inconsistencies with the financial statements;
2. Based on management representations and compliance certificates submitted to the Board
of Directors by the officers of the Company charged with compliance and the same being

11
noted by the Board, we certify that the Company has complied with the terms and
conditions of registration stipulated by Insurance Regulatory and Development Authority
(IRDA);

3. We have verified the cash balances, to the extent considered necessary, and securities
relating to the Companys loans and investments as at March 31, 2015, by actual
inspection or on the basis of certificates / confirmations received from the Custodian and/
or Depository Participants appointed by the Company, as the case may be. As at March
31, 2015, the Company does not have reversions and life interests;
4. The Company is not a trustee of any trust; and
5. No part of the assets of the Policyholders Funds has been directly or indirectly applied in
contravention to the provisions of the Insurance Act, 1938, relating to the application and
investments of the Policyholders Funds.

12
Independent Auditors Certificate

To,
The Board of Directors
Bajaj Allianz Life Insurance Company Limited
GE Plaza, Airport Road, Yerwada,
Pune 411 006

Dear Sirs,
[Ref: Certificate in accordance with the Regulation 13 (D) (7) of the IRDA (Investment) (5th
Amendment) Regulations (the Regulations), 2013]

1. At the request of Bajaj Allianz Life Insurance Company Limited (the Company), we
have performed the procedures stated in paragraph 2 below, for the purpose of issuing a
certificate in connection with the Regulations, regarding the declaration of the Net Asset
Value (NAV) of the schemes of the Company as at March 31, 2015.
2. In this connection, we have performed the following procedures:
a) Obtained representation from the management that the Company has declared March
31, 2015 as a business day for accepting applica- tion forms and that it has declared
NAV for March 31, 2015;
b) Obtained the list of applications for New Business, Renewal premium, Top up ,
Surrender, Free Look Cancellation, Fund Switches, and Partial Withdrawal in respect
of Unit Linked Products on March 31, 2015 ( together referred to as Application
Forms), from the Management;
c) Selected samples of Application Forms from the listing mentioned in paragraph 2(b)
above and verified whether:

13
i) The applications received on Tuesday, March 31, 2015, upto 3.00 p.m. have
been appropriately stamped; and the NAV of March 31, 2015 is applied for
such applications for the selected samples; and
ii) ii) The applications received on Tuesday, March 31, 2015, after 3.00 p.m. have
been appropriately stamped; and the NAV of April 1, 2015 is applied for such
applications for the selected samples.
3. The compliance with conditions stated in the circular is the responsibility of the
Companys management. Our responsibility is to perform the above-mentioned
procedures on the particulars and state our findings. We performed the above-mentioned
proce dures, in accordance with the Guidance Note on Audit Reports and Certificates for
Special Purposes issued by the Institute of Chartered Accountants of India (ICAI). The
above-mentioned procedures include examining evidence supporting the particulars on a
test basis. Further, our scope of work did not involve us performing audit tests for the
purposes of expressing an opinion on the fairness or accuracy of any of the financial
information or the financial statements of the Company taken as a whole. We have not
performed an audit, the objective of which would be the expression of an opinion on the
financial statements, specified elements, accounts or items thereof, for the purpose of this
certificate. Accordingly, we do not express such opinion.
4. Based on the procedures performed by us, as mentioned in paragraph 2 above, according
to the information and explanations provided to us and representation by the Companys
management, we confirm that:
(a) The Company had declared March 31, 2015 as a business day for accepting proposal
forms;
(b) The Company has declared NAV for March 31, 2015;
(c) The applications received on Tuesday, March 31, 2015 upto 3.00 p.m. have been
stamped as such in the system and that the NAV of March 31, 2015 is applied for
proposals received upto 3.00 p.m.; and
(d) The application received on Tuesday, March 31, 2015 after 3.00 p.m. have been
stamped as such in the system and that the NAV of next financial year i.e. April 01, 2015
is applied for proposal received after 3.00 p.m.

14
5. The concurrent auditors of the Company, M/s. Chokshi & Chokshi LLP, Chartered
Accountants have issued a certificate dated May 15, 2015 con- firming the compliance with
requirements of Regulation 13 (D) (5) of the Regulations. We have read the certificate and found
the same to be in order.
Prot & Loss account for the year ended March 31, 2016 Shareholders
Account (Non Technical Account)
(Rs. 000)
Particulars Schedul March 31, March 31,
Amounts transferred from the Policyholders account (Technical Account) 4,878,911 6,391,014
Income from investments (Refer note 2(c)(iii) of Schedule 16)
(a) Interest, dividends and rent Gross 5,856,338 4,853,803
(b) Profit on sale/redemption of investments 615,707 458,787
(c) (Loss) on sale/redemption of investments (125,600) (132,526)
(d) Accretion of discount/(amortisation of premium) (net) 154,813 195,964
Other Income 18,431 25,922
Total (A) 11,398,600 11,792,964
Expenses other than those directly related to the insurance business (Refer note 2(o) 3 169,281 101,644
Bad debts written off - -
Provisions (other than taxation)
(a) For diminution in value of investment(Net) - (Refer note 2(j)(ii) of Schedule - -
(b) Provision for doubtful debts - -
Contribution to the Policyholders' account (Technical Account) (Refer note 3.26 of 1,162,452 69,386
Total (B) 1,331,733 171,030
Profit/ (loss) before tax 10,066,867 11,621,934
Provision for taxation (Refer note 2(m) of Schedule 16)
(a) Current tax (credit)/charge 1,304,687 1,375,922
(b) Deferred tax (credit)/charge - -
(c) Wealth tax 62 100
Profit/ (loss) after tax 8,762,118 10,245,912
Appropriations
(a) Balance at the beginning of the year 46,601,707 36,355,795
Less: Adjustment on revision of depreciation rate (Refer note 2(l)(i) of Schedule 30,417 -
(b) Interim dividends paid during the year - -
(c) Proposed final dividend - -
(d) Dividend distribution on tax - -
(e) Transfer to reserves - -
Profit carried forward to the Balance Sheet 55,333,408 46,601,707
Earning per share (Basic and Diluted) (Refer note 3.12 & note 2(q) of Schedule 58.14 67.98
Basic earning per equity share Rs. 58.14 67.98
Diluted earning per equity share Rs. 58.14 67.98
Nominal value per equity share Rs. 10.00 10.00
Significant accounting policies and notes 16

15
Bajaj Allianz Life Insurance Company Limited Form L-3-A-BS
Registration No. 116
Date of Registration - 3rd August 2001
Balance Sheet as at March 31, 2016
(Rs. '
Particulars Schedul At March 31, 2016 At March 31, At March 31

Shareholders funds
Share capital L-8,L-9 1,507,090 1,507
Reserves and surplus L-10 65,982,917 57,201
Credit/(debit) fair value change account -
Sub-Total 67,490,007
Borrowings L-11 -
Policyholders funds
Credit/(debit) fair value change account 2,076,130 677
Policy liabilities
Non Unit Mathematical reserve 146,055,378
Provision for linked liabilities
(a) Provision for linked liabilities 175,322,488
(b) Credit/(debit) fair value change account (linked) 41,125,997
Provision for discontinuance fund
(a) Discontinued on account of non-payment of 2,844,186
(b) Other discontinuance - -
(c) Credit/[debit] fair value change account - 365,348,049 - 331,415
Insurance reserves -
Sub-Total 367,424,179
Funds for future appropriations 1,244,098
Total 436,158,284 392,640

Investments
Shareholders' L-12 71,866,187 58,104
Policyholders' L-13 144,378,834 115,362
Assets held to cover linked liabilities L-14 216,450,416 212,876
Discontinued fund assets 2,842,255 1,454
Loans L-15 957,439 526
Fixed assets - net block L-16 2,271,978 2,554
Current assets
Cash and bank balances L-17 4,523,360 7,320
Advances and other assets L-18 12,108,578
Sub-total(A) 16,631,938
Current liabilities L-19 15,245,299 13,252
Provisions L-20 3,995,464
Sub-total(B) 19,240,763
Net current assets (C)=(A)-(B) (2,608,825)
Miscellaneous expenditure (to the extent not written L-21 -
Debit balance in profit & loss account -
Total 436,158,284 392,640

16
Cash ow statement / Receipts and payments account for the year ended
March 31, 2016
(Rs. 000)
Sr. Particulars FY FY
A Cash Flow from operating activities:
1 Premium received from policyholders, including 62,264,207 61,642,223
2 Other receipts 511,269 305,621
3 Payments to the re-insurers, net of commissions (227,575) (233,899)
4 Payment of claims (83,915,58 (84,036,831
5 Payment of commission and brokerage (2,027,590) (2,959,138)
6 Payment of operating expenses (12,365,68 (15,473,481
7 Preliminary and pre-operative expenses - -
8 Deposits, advances and staff loans 132,387 552,046
9 Income taxes paid (Net) (1,415,803) (1,606,739)
1 Service tax paid (2,263,723) (2,569,175)
1 Other payments - -
1 Cash flows before extraordinary items (39,308,092 (44,379,373)
1 Cash flow from extraordinary operations - -
Net cash from operating activities (A) (39,308,092 (44,379,373
B Cash Flow from investing activities: - -
1 Purchase of fixed assets (123,097) (276,313)
2 Proceeds from sale of fixed assets 6,103 15,598
3 Purchase of investments (346,864,9 (357,833,69
4 Loans disbursed (735,000) (1,002,719)
5 Loans against policies (430,557) (220,916)
6 Sale of investments 369,370,983 385,147,650
7 Repayment received 357,741 1,209,747
8 Rent, interest and dividend received 19,385,704 18,159,983
9 Investment in money market instruments and in 1,434,693 1,168,539
1 Expense related to investments (28,968) (29,403)
Net cash from investing activities (B) 42,372,616 46,338,470
C Cash Flow from financing activities:
1 Proceeds from Issuance of share capital - -
2 Proceeds from borrowing - -
3 Repayments of borrowing - -
4 Interest/dividends paid - -
Net cash from financing activities (C) - -
Effect of foreign exchange rates on cash and - -
3,064,524 1,959,097
cash equivalents,
Add: Cash & cashnetequivalents
(D) Net increase in
at the beginning of the 9,175,307 7,216,210
Cash & cash equivalents at the end of the year 12,239,831 9,175,307
Components of cash & cash equivalents at the
( Cash (including cheques in hand and stamps 2,586,655 1,549,305

17
( Bank balances and money at call and short 1,492,341 6,015,710
b notice [including bank balance for linked
( Other short term liquid Investment (forming part 8,160,835 1,610,292
c & cash
Cash of equivalents
investments in
at financials)
the end of the 12,239,831 9,175,307

AUDITING

Meaning:

Auditing refers to a systematic and independent examination of books, accounts, documents and
vouchers of an organization to ascertain how far the financial statements present a true and fair
view of the concern. It also attempts to ensure that the books of accounts are properly maintained
by the concern as required by law. Auditing has become such a ubiquitous phenomenon in the
corporate and the public sector that academics started identifying an "Audit Society". [1] The
auditor perceives and recognizes the propositions before him/her for examination, obtains
evidence, evaluates the same and formulates an opinion on the basis of his judgment which is
communicated through his audit report.
Define
An examination and verification of a company's financial and accounting records and
Supporting documents by a professional, such as a Certified Public Accountant.

Features:
The following are the essential features of auditing:

1) Accounting Control Audit is an instrument of accounting control. The truth and fairness
of the accounting information is controlled and checked by auditing activities.

2) Safeguard Audit acts as a safeguard on behalf of the proprietor/s (whether an individual


or a group of persons) against extravagance, carelessness or fraud on the parts of the
proprietors' agents or servants in the realization and utilization of his/their money and
other assets.

18
3) Assurance Audit assures on the proprietors' behalf that the accounts maintained truly
represents facts and expenditure has been incurred with due regularity and propriety.

4) Assessment Audit assesses the adequacy of the accounting system in order to ascertain its
effectiveness in maintaining accounting records of an organization.
5) Review Audit carries out a review of the financial statements to know whether the
accounting records are in agreement with those statements.

6) Reporting Tool Audit is a tool for reporting on the financial statements as required by the
terms of the auditors' appointment and in compliance with the relevant statutory
obligations.

7) Practical Subject Auditing is a practical subject. It is something that people do. How it is
done today is a result of long history of marginal changes and responses to new
commercial and legal developments over the centuries with the most rapid progress in the
last few years.

Advantages:

Auditing has become a compulsory task in the business organization. All the organizations like
business, social, industries and trading organizations make audit of books of accounts. Now-a-
days, owner of business and its management are separate. So, to detect and prevent frauds,
auditing has become essential. Its advantages are as follows:

1. Audit Helps To Detect and Prevent Errors And Frauds


An auditor's main duty is to detect errors and frauds, preventing such errors and frauds and
taking care to avoid such frauds. Thus, even though all organizations do not have compulsion to
audit, they make audit of all the books of accounts.
2. Audit Helps To Maintain Account Regularly
An auditor raises questions if accounts are not maintained properly. So, audit
gives moral pressure on maintaining accounts regularly.
3. Audit Helps To Get Compensation

19
If there is any loss in the property of business, insurance company provides compensation on the
basis of audited statement of valuation made my the auditor. So, it helps to get compensation.

4. Audit Helps To Obtain Loan


Especially financial institutions provide loan on the basis of audited statements. A business
organization may obtain loan considering the audited statement of last five years. So, an
organization should make audit compulsory to obtain loan.
5. Audit Facilitates the Sale of Business
Valuation of assets is made by the auditor. On the basis of valuation of assets and liabilities,
businessman can sell his business. It helps to determine the price of business.
6. Audit Helps To Assess Tax
Tax authorities assess taxes on the basis of profit calculated by the auditor. In the same way sales
tax authority calculates sales tax on the basis of sales shown in the audited statement.
7. Audit Facilitates To Compare
An auditor instructs an accountant in the same way which helps to compare books of accounts of
current year with the accounting of the previous year. So, comparing the accounts of current with
previous years helps to detect errors and frauds.
8. Audit Helps To Adjust Account Of Deceased Partner
Valuation of all the assets and liabilities of the business is made by the auditor while auditing
books of account. Such valuation helps to clear the amount of deceased partner.
9. Audit Helps To Present A Proof
If any case is filed against the auditor regarding negligence, auditor can present audited report as
a proof to settle such case. So, it helps to present proof to settle such cases.
10. Audit Provides Information about Profit Or Loss
A businessman wants to know profit or loss of his business after a certain period of time. So, the
owner of the business can get information about profit or loss after auditing the books of
accounts.
11. Audit Helps To Prepare Future Plan
All the audited statements remain true and correct. Such true and correct account helps to prepare
for the future plans.
12. Audit Helps To Increase Goodwill

20
Auditing shows the profitability and financial position of an organization which creates faith of
public over the business. Thus, auditing helps to increase goodwill of an organization.

AUDITING STANDARDS IN INDIA

As the trade and commerce grew extensively globally, the involvement of public money therein
also increased manifolds. This in turn created a demand from the investors to have the accounts
of the business ventures examined by a person independent of the owners and management of
the business to ensure that they were correct and reliable. Such a demand laid down the
foundation for the profession of auditing. The extent of reliance placed by the public on the
auditors has increased so much with time that it is, unreasonably of course, felt by the public that
nothing can go wrong with an organization which has been audited. Though the fact that an audit
has been carried out is not a guarantee as to the future viability of an enterprise, it is extremely
important that the auditors carry out their assignments with utmost professional care and
sincerity, to uphold the faith posed by the public in them.

Auditing Standardssetting in India

As mentioned earlier, the Auditing and Assurance Standards Board of the Institute formulates
the auditing standards. Broadly, following is the procedure for formulating auditing standards:
1. The Auditing and Assurance Standards Board identifies the areas where auditing standards
need to be formulated and the priority in regard to their selection.
2. In the preparation of the auditing standards, the Board is normally, assisted by study groups
comprising of a cross section of members of the Institute.
3. On the basis of the work of the study groups, an Exposure Draft of the proposed auditing
standard is prepared by the Board and issued for comments of the members.
4. After taking into the comments received, the draft of the proposed auditing standard is
finalised by the Board and submitted to the Council of the Institute.

21
5. The Council considers the final draft of the proposed auditing standard and, if necessary,
modifies the same in consultation with the Board. The auditing standard is then issued under the
authority of the Council. While formulating the auditing standards, the Board also takes into
consideration the applicable laws, customs, usages and business environment in the country.

LIST OF AUDITING STANDARDS:

AAS SA Particulars SA 200-299


(Standards of Introductory Matters
auditing)
AAS 1 SA 200 Basic principles governing an audit SA 200-299 General
principles and
responsibilities
AAS 2 SA 200A Objective and scope of the audit of
financial statement
AAS 26 SA 210 Terms of audit engagement
AAS 17 SA 220 Quality control of audit work
AAS 3 SA 230 Documentation
AAS 4 SA 240 The auditors responsibility to consider
fraud and error in an audit of financial
statements
AAS 21 SA 250 Consideration of laws and regulations
in an audit of financial statements
AAS 27 SA 260 Communication of audit matters with
those charged with governance
AAS 12 SA 299 Responsibility of joint auditors
AAS 8 SA 300 Audit planning SA 300-499 Risk
assessment and
response
AAS 20 SA 310 Knowledge of the business
AAS 13 SA 320 Audit materiality
AAS 6 SA 400 Risk assessment and internal control
AAS 29 SA 410 Audit in a computer information
systems environment

22
AAS 24 SA 402 Audit consideration relating to entities
using service organizations
AAS 5 SA 500 Audit evidence SA 500-599 Audit
evidence
AAS 34 SA 501 Audit evidence additional
consideration for specific lte
AAS 30 SA 505 External confirmation
AAS 22 SA 510 Initial engagement opening balances
AAS 14 SA 520 Analytical procedures
AAS 15 SA 530 Analytical procedures
AAS 18 SA 540 Auditing of accounting estimates
AAS 23 SA 550 Related parties
AAS 19 SA 560 Subsequent events
AAS 16 SA 570 Going concern
AAS 11 SA 580 Representations by management
AAS 10 SA 600 Using the work of another auditor SA 600-699 using
work of others
AAS 7 SA 610 Relying upon the work of an internal
auditor
AAS 9 SA 620 Using the work of an expert
AAS 28 SA 700 The auditors report on financial SA 700-799 audit
statements conclusions and
reporting

AAS 25 SA 710 Comparatives


- SA 800 Special considerations - audits of SA 800-899
financial statements prepared in specialized areas
accordance with special purpose
frameworks
- SA 805 Special considerations audit of
single financial statements and
specific elements, accounts or items of
a financial statement
- SA 810 Engagement to report on summary

23
financial statements
AAS 33 SRE 2400 Engagement to review financial SA 2000-2699
statements standards on review
engagement
AAS 35 SAE 3400 The examination of prospective Assurance
financial information engagements other
than audits or review
of historical financial
inform SA 3000-
3699 standards on
assurance
engagements (SAE)
AAS 32 SRS 4400 Engagement to perform agreed upon SA 4000-4699
procedures regarding financial standards on related
information services
AAS 31 SAE 4410 Engagements to compile financial
information

AAS 1: BASIC PRINCIPLES GOVERNING AN AUDIT (SA 200)


Govern the auditors professional responsibilities, which should be compiled with all
audits.

Compliance with the basic principles requires the application of auditing procedures and
reporting practices appropriate to the particular circumstances.

The standard enunciates the following principles as integral part of any audit carried out
by a member of the ICAI. They are: integrity, objectively and independence,

24
confidentiality, skills and competence, work performed by other, documentation, audit
evidence, accounting system and internal control, audit conclusions and reporting.

AAS 2: OBJECTIVE AND SCOPE OF THE AUDIT OF FINANCIAL


STATEMENTS (SA 200A)
Objective of an audit of financial statements is to enable an auditor to express an
opinion. Responsibility for the preparation of financial statements is that of the
management of the enterprise.

Govern the auditors professional responsibilities, which should be compiled with for all
audits.

Compliance with the basic principles requires the application of auditing procedures and
reporting practices appropriate to the particular circumstances.

AAS 3: AUDIT DOCUMENTATION (SA 230)


Any changes to the documentation after file assembling should be recorded.

Scanning of original documentation allowed for practical reasons so far as its identical
in all respects as it would have been in a physical form.

Audit documentation implies record of audit procedure performed, relevant audit


evidence obtained and conclusions the auditor reached.

AAS 5: AUDIT EVIDENCE

Audit evidence from compliance procedures reasonably assures the auditor in respect of
existence valuation of assets / liabilities, occurrence completeness measurement of
transaction, appropriate presentation and disclosure of items.

Evidence can be obtained by performing compliance and substantive procedures


through inspection, observation, computation and analytical review.

25
AAS 8: AUDIT PLANNING
Plans should be made to cover at least

a) Coordinating the work to be performed.


b) Establishing the expected degree of reliance to be placed on internal control.
c) Acquiring knowledge of the clients accounting systems, policies and internal
control procedures.

Matters to be considered in developing the audit plan given.

CONCLUSION

Bajaj Allianz Life Insurance Company is the second largest insurance company in India.

The study reveals that the company has achieved this position because of its efficient
market operation & the ethics and transparency policies adopted by it.

26
The company should concentrate more on advertisement, technology up gradation & also
improve the efficiency of its workforce & has to have better offices.

The Marketing Communication of Bajaj Allianz has to focus on creating knowledge of


the company and its products.

The study also reveals that misleading advertisements, hidden charges etc are some of
the aspects with which Customers do not prefer.

So Bajaj Allianz has to work on these areas to maintain its position & grow further.

BIBLIOGRAPHY

Website
www.bajajallianz.com
www.wikipedia.com
https://www.bajajallianz.com/Corp/aboutus/life-insurance-annual-report.jsp

27
http://www.businessdictionary.com/definition/auditor.html
http://www.trueandfair.org.uk/what_is_an_audit
http://www.bitlanders.com/blogs/essential-features-of-auditing/794961
http://www.investorwords.com/324/audit.html#ixzz3n8Hcgrtw
http://accountlearning.blogspot.in/2012/02/advantages-of-audit.html
http://increase.indiacan.com/UploadUserDocument//Final%20Audit%20-%20Insurance
%20Audit%20Notes.pdf

28