- 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 regarding rate of dividends.
- Examine the company’s procedure for payment of dividends including unclaimed dividends and ensure that they are not paid without adequate safeguards as to identification of the payee, checking of the payee’s claims etc. In this connection, internal control of the company should be examined.
- Verify the shareholders’ register and ensure that the names of all shareholders who are entitled to receive dividends have been included.
- Check the computation of dividends with reference to rate of dividends and number of shares held.
- See counterfoils of cheques for amounts paid to shareholders.
- Examine, whether all the conditions for payment and source of dividend as specified on section 205, 205A and 205B, have been complied with. It may be noted that the Institute has issued a Guidance Note on Audit of Payment of Dividends.
(Visited 134 times, 1 visits today)
Share this:
