Most auditors are hand in gloves in corporations that do frauds. The auditors themselves often show the way to game the system and syphon off the money or worse.

The Standard of Audit published by ICAI is the mother documents which an Auditor must comply while doing the audit . Following is the simple process to follow in case of Mis Statement.
Here's an overview of the audit procedures to be followed when a misstatement is detected during an audit under the ICAI framework:

Initial Response (SA 240)
1. *Evaluate the Misstatement*: Assess the materiality and nature of the misstatement.
2. *Discuss with Management*: Inform and discuss the misstatement with management.
3. *Obtain Management's Response*: Document management's response, including their explanation and proposed corrective actions.

Audit Procedures (SA 240, SA 330, and SA 450)
1. *Re-evaluate Risk Assessment*: Update the risk assessment to reflect the misstatement.
2. *Perform Additional Procedures*: Design and perform additional audit procedures to:
- Verify the accuracy of financial statements.
- Test the operating effectiveness of internal controls.
- Evaluate the reasonableness of management's estimates and judgments.
3. *Consider the Impact on Other Areas*: Assess the potential impact of the misstatement on other areas of the financial statements.
4. *Evaluate the Need for Expert Assistance*: Consider seeking expert assistance, such as a forensic accountant or a specialist in the relevant area.

Communication with Management and Those Charged with Governance (SA 260 and SA 265)
1. *Communicate the Misstatement*: Inform management and those charged with governance about the misstatement and its implications.
2. *Discuss the Proposed Corrective Actions*: Discuss and agree upon the proposed corrective actions with management.
3. *Consider the Need for Disclosure*: Evaluate the need for disclosure of the misstatement in the financial statements.

Reporting Considerations (SA 700 and SA 705)
1. *Evaluate the Impact on the Audit Report*: Consider the impact of the misstatement on the audit report, including the need for an emphasis of matter or a qualified opinion.
2. *Document the Misstatement and Corrective Actions*: Document the misstatement, the proposed corrective actions, and the auditor's response in the audit working papers.

Quality Control and Review (SA 220)
1. *Conduct a Review*: Perform a review of the audit procedures and conclusions to ensure that the misstatement was properly addressed.
2. *Document the Review*: Document the review procedures and conclusions in the audit working papers.

The CA profession is at a low. CAs are being churned out like a production line, but the depth of knowledge and the credibility, accountability and transparency are found wanting, when compared to the profession in the 70s and 80s. No wonder NFRA had to be formed to oversee the ICAI Members. Isnt that a matter of shame that the topmost accounting and audit body in the country is subject to scrutiny !! I dont think the ACS and ICMA members are under control of any regulatory body. Wuite a reflection on this profession.