As we all are aware that smaller entities make a substantial contribution to our Indian economy, and quantitatively the majority of audits are also audits of smaller entities.

In India, all entities particularly those in the corporate sector are required to get their accounts audited and even in case of non-corporate sector also, audit is mandatory under various laws and regulations. Audit of Smaller entities remain challenging considering the mandatory compliance of Standards on Auditing (SAs) irrespective of the nature, size and complexity of the entity. SAs unlike accounting standards, need to accommodate the audits of the largest or most complex multinationals and at the same time the smallest entities as well.

Considering the challenges faced by the members in audit of smaller entities, in 2008, the Auditing and Assurance Standards Board (AASB) of ICAI issued a publication, “Practitioner’s Guide to Audit of Small Entities” to provide a step by step approach to implementation of Standards on Auditing that may be followed in audit of small entities. The publication was last revised in 2010. Since 2010, number of developments have taken place e.g. revision of some Standards on Auditing, issue of new Standards on Auditing, changes in Accounting Standards, changes in various law and regulations having bearing on audits of small entities. These developments necessitated revision of this publication.

AASB feel happy to publish this revised edition of the “Practitioner’s Guide to Audit of Small Entities”. The draft of revised Guide was developed by a study group constituted by AASB for this purpose and thereafter it was finalized with the contributions of AASB members and Central Council members of ICAI. The Guide contains ready to use audit programme templates for audit of small entities. The Appendices to the Guide contain illustrative checklist to verify compliance with various Standards on Auditing. The Appendices also contain illustrative formats of various letters and confirmations required in course of audit of small entities.

At this juncture, we wish to place on record our sincere gratitude to CA. Durgesh Kumar Kabra, Central Council member and AASB member for leading the study group under his able convenorship. Our deepest gratitude is also due to all members of the study group viz., CA. Narayan Pasari, CA. Rahul Shah, CA. Gourav Roongta, CA. Manish Sampat, CA. Pavan Gattani, CA. Avinash Rawani, CA. Hardik Chokshi, CA. Abhay Mehta, CA. Mehul Shah and CA. Niraj Gupta for sparing time out of their other preoccupations to revise the Guide.

We wish to express our sincere thanks to CA. Prafulla Premsukh Chhajed, Honourable President, ICAI and CA. Atul Kumar Gupta, Honourable VicePresident, ICAI for their guidance and support to the activities of the Board.

We also wish to place on record our sincere thanks to all the Board members for their suggestions, support and guidance in finalising this Guide and other pronouncements of the Board. We also wish to thank CA. Megha Saxena, Secretary, AASB and staff of AASB for their technical and administrative contribution, at various stages of finalizing this Guide.

As a matter of fact, we wish to emphasis that, this Guide is not a substitute for the text of Standards on Auditing and other authoritative pronouncements issued by ICAI. We are confident that the members would find this publication very useful.


The purpose of this Guide is to provide a practical approach to implementation of the Standards on Auditing that may be followed while carrying out audit of small entities. Since the Guide is in the form of a checklist, it is also hoped that by using that checklist, the practitioner would be able to maintain appropriate documentation of the audit work.