Day: December 24, 2021

Receipt of cash from the customers against price of good sold are checked with the counterfoils of receipt issued to them. At the same time, it is also verified that there is a system of internal check in operation which Read More …

Primarily, the system of internal check should be examined with the objective of finding out loopholes therein, if any, whereby cash sales could be misappropriated. Further, the practice followed in the manner cash memos are issued should be ascertained. Because Read More …

The function of audit in respect of cash receipts being much the same as that in the case of cash payments, the procedure stated at the beginning of this Chapter should be applied for their verification. But the internal check Read More …

 Examine the basis on which the gratuity payable to employees is worked out. The liability for gratuity may either be worked out on actuarial rules or agreement or on the presumption that all employees retire on the balance sheet date. Read More …

 Examine special provisions, if any, in the Memorandum and Articles of Association regarding payment of dividends.  See that in declaring dividends, provisions of the Companies (Transfer of Profits to Reserves) Rules, 1975 have been complied with.  Examine the Board’s minutes Read More …

The advertisement expenses will be vouched in the following manner :  Ascertain the nature of advertisement expenses to ensure that the same have been charged properly.  Obtain the complete list of advertisement, mediawise, i.e., newspapers, slides, hoardings, magazines, television, radio, Read More …

Note : Students should study carefully from the Spicer and Pegler’s book the system of internal check that should exist in respect of payments made from petty cash. Payments from petty cash should be verified as follows :  Trace the Read More …

Payments on account of salaries and wages need to be vouched carefully, since amounts which were either not due or in excess of those due may have been paid by the client. The evidence in support of such payments generally Read More …

The expenditure incidental to the creation and floating of a company includes stamp duties, registration fees, legal costs, accountant’s fees, cost of printing, etc. The contracts relating to preliminary expenses should be examined. If preliminary expenses incurred by promoters have Read More …

Since the line demarcating repairs from renewals is slender, usually it is not a simple matter to determine the amount of the expenditure, if any, included as charges for repairs, which should be considered as that incurred for renewal of Read More …