Unit – 5
Audit of other institutions
Q1) What does Audit of other institutions such as Banks means?
A1)
Audit of Banking Companies involves Security Check apart from routing nature of Auditing.
1) To check if all the other entrances to the bank and the ones within the bank are locked at the time of opening the cash room.
2) If the burglar alarm system is functioning properly.
3) If the branch has a copy of the Insurance Policy obtained by their corporate office.
4) Ensure that all the payments for the tax are on time and all the Challans for the same are present.
5) It is to be confirmed whether the letter of his appointment is in order.
6) He should examine the audit report of last year and should note down the observation and qualification, if any.
7) He should examine the minutes of the meeting of Board of Directors and note down those points which may affect his Audit work.
8) He should verify that the Internal Control and Internal Check System are working appropriately and are in the line decided by the trust.
9) He should physically verify the assets as many as possible.
10) All the applicable requirements of law should be fulfilled for the purchase of investments and fixed assets.
11) He needs to verify the Deposits Register and confirm the provisions relating to the amount, time of deposit, rate of interest and other details, as required by the prevailing Law.
Q2) Write a note on
- Educational Institutions
- Clubs
A2)
1) It is to be confirmed whether the letter of his appointment is in order.
2) He should examine the audit report of last year and should note down the observation and qualification, if any.
3) Examine the Trust Deed and note down its important provisions.
4) He should examine the minutes of the meeting of trustee and note down those points which may affect his Audit work.
5) He should verify that the Internal Control and Internal Check System are working appropriately and are in the line decided by the trust.
6) Whether collected fees is deposited in bank on a daily basis.
7) Verification of counterfoil copies of fees receipt with fees received register should be done.
8) Fees receivable and actual fees received should be reconciled.
9) Whether waiver of fees is properly sanctioned by appropriate authorities.
10) All purchases should be authorized by appropriate person.
11) In case where hostels purchase food items, provisions, clothing, etc. should be properly verified.
12) Appropriate provision should be made on account of outstanding payments.
13) Whether control system for payment is adequate or not.
14) He should physically verify the assets as many as possible.
15) All the applicable requirements of law should be fulfilled for the purchase of investments and fixed assets.
16) It is to be confirmed whether the letter of his appointment is in order.
17) He should examine the audit report of last year and should note down the observation and qualification, if any.
18) He should examine the minutes of the meeting of trustee and note down those points which may affect his Audit work.
19) He should verify that the Internal Control and Internal Check System are working appropriately and are in the line decided by the Managing Committee
20) The donation received by club will be verified with the counterfoils of receipt, donation register and cash book.
21) To know the policy regarding membership fees of the new members, an Auditor should check the policy of club
22) Membership fees should be vouched with counter foil of receipts, membership register and cash book.
23) On the basis of the members register, annual subscription dues received in advance and arrears of subscription should be reconciled.
24) Verification of rent received and outstanding rent may be verified with the rental agreement, receipt book and cash book.
25) Capital expenditure should be verified from minutes of meeting of managing committee.
26) Staff salary and annual increment to staff should be verified from appointment letters, attendance register, salary register, time records, etc.
27) Physical verification is recommended for food items, wines, crockery, sports equipment etc. on the basis of stock register.
28) All payments should be authorized by appropriate person.
29) All allowances and rebates should be properly sanctioned by the appropriate authority.
30) Depreciation should be properly verified according to applicable provisions of the Act.
31) He should physically verify the assets as many as possible.
32) All the applicable requirements of law should be fulfilled for the purchase of investments and fixed assets.
Audit of Club:
1) It is to be confirmed whether the letter of his appointment is in order.
2) He should examine the audit report of last year and should note down the observation and qualification, if any.
3) He should examine the minutes of the meeting of trustee and note down those points which may affect his Audit work.
4) He should verify that the Internal Control and Internal Check System are working appropriately and are in the line decided by the Managing Committee
5) The donation received by club will be verified with the counterfoils of receipt, donation register and cash book.
6) To know the policy regarding membership fees of the new members, an Auditor should check the policy of club
7) Membership fees should be vouched with counter foil of receipts, membership register and cash book.
8) On the basis of the members register, annual subscription dues received in advance and arrears of subscription should be reconciled.
9) Verification of rent received and outstanding rent may be verified with the rental agreement, receipt book and cash book.
10) Capital expenditure should be verified from minutes of meeting of managing committee.
11) Staff salary and annual increment to staff should be verified from appointment letters, attendance register, salary register, time records, etc.
12) Physical verification is recommended for food items, wines, crockery, sports equipment etc. on the basis of stock register.
13) All payments should be authorized by appropriate person.
14) All allowances and rebates should be properly sanctioned by the appropriate authority.
15) Depreciation should be properly verified according to applicable provisions of the Act.
16) He should physically verify the assets as many as possible.
17) All the applicable requirements of law should be fulfilled for the purchase of investments and fixed assets.
Q3) Write a report on Clean and qualified audit?
A3)
- 1st point should be – Check the background of the organisation.
- 2ndpoint should be – Check the accounting system of the organisation.
- 3rdpoint should be – Check the Internal Control system of the business entity.
- 4th to 7th points should be related to 4 Incomes
- 8th to 11th points should be related to 4 Expenditures
- 12th and 13th points should be related to 2 Assets
- 14th and 15th points should be related to 2 Liabilities
Q4) Write a brief description on Audit Standards (AS) and auditing of MNCs?
A4)
- 1st point should be – Check the background of the organisation.
- 2nd point should be – Check the accounting system of the organisation.
- 3rd point should be – Check the Internal Control system of the business entity.
- 4th to 5th points should be related to 2 Incomes
- 6th to 7th points should be related to 2 Expenditures
- 8th point should be related to Assets
- 9th point should be related to Liabilities
