INTRODUCTION
Auditing is a process of reviewing the financial transactions of the entity, verifying records for the transactions which are material, assessing the risks of material misstatements based on the overall samples selected and then giving an assurance to the readers of the audited financial statements that they reflect the true and fair view of the affairs of the entity.
The process of auditing requires going through various types of documents like payment vouchers, purchase invoices, sales invoices, expenses invoices, receipt records, bank statements, contracts and agreements entered into by the entity which has a bearing on the financial results, filings for regulatory compliances, assessments/demands under various statutes, maintenance of records as per various regulations, etc.
Challenge lies in documenting the audit process for SME entities. The primary reason for this challenge is that the organisational structure is lean and majority of the decisions are centralised with a few persons managing the business. Sometimes, decisions are taken off the cuff during informal meetings and there may be no official documents for the process followed for decision making. Further, there may be explanations provided which may be genuine and convincing, however they would not be recorded in any form. The auditors of these SME entities are also Small and Medium Practitioners (SMPs) who may not have professional staff with ade
