Day: December 26, 2021

Some of the frauds which audit may fail to disclose unless stocks are checked are the following: Suppose there are two cotton mills : Alfa and Beta, and have a common managing director. The mill Alfa closes its accounts on Read More …

 When an invoice runs into several pages and the total of each page has been carried forward to the next or where the amount of an invoice has been distributed over several accounts, it should be confirmed that the amounts Read More …

The purchases on credit should be verified by reference to the suppliers invoices to which generally copies of delivery notes, disclosing the dates and particulars of goods received and acknowledged by the Receiving Department, are also attached. While vouching entries Read More …

The provision of service also constitutes trading, e.g., those rendered by a contractor, estate agent, repairer of motorcars, etc. In those cases, the internal check should provide for the regulation of the charges for the services rendered, either according to Read More …

Trading is a chain of business process of buying, taking delivery of goods bought, making proper arrangements for their storage and issuing them on sale, etc. The function of audit, in this background, is to ensure that there is no Read More …

General Considerations In addition to matters which are listed in the audit of cash transactions, certain other principal matters that should be taken into account while vouching trading transactions are :  Correctness of book-keeping record : The auditor should also Read More …

The auditor should carry out physical verification of cash at the date of the balance sheet. However, if this is not feasible, physical verification may be carried out, on a surprise basis, at any time shortly before or after the Read More …

Apart from comparing the entries in the cash book with those in the Pass Book the auditor should obtain a certificate from the bank confirming the balance at the close of the year as shown in the Pass Book. If Read More …

Obtain the schedule of discounted bills receivable dishonoured.  Check the entry in bank statement regarding the amount of bills dishonoured and see that the bank has debited the account of client. Verify the bills receivable returned by the bank alongwith Read More …

The refund of insurance premium may be because of earlier provisional payment of premium or may be a policy might have been cancelled at a later date. The auditor should take following steps while vouching such refunds :  Ascertain the Read More …