Dear All,
I am doing a Statutory Audit of a small firm which maintains its books of accounts on cash basis. Pleas tell me the aspects to be taken care of in a cash basis of accounting?
Thanx in Advance.
Guddi (employee) (769 Points)
21 August 2009Dear All,
I am doing a Statutory Audit of a small firm which maintains its books of accounts on cash basis. Pleas tell me the aspects to be taken care of in a cash basis of accounting?
Thanx in Advance.
Satish
(CA Final Student)
(479 Points)
Replied 21 August 2009
Auditing in a cash basis environment is comparatively easy than in mercantile. You need to vouch for actual cashflows i.e. all expenses & incomes actually incurred for cash or by cheques during the financial year under audit. The journals would be only for depreciation & amortisations. No provisions are required to be made in the balance sheet.
CAclubindia
