26 May 2010
Dear Sir, In a tax audit report, if the Auditor is unable satisfy about the payment exceeding Rs.20000/- through A/c payee cheque/draft means he has to give Diclaimer of opinion. Query: How to ensure whether a payment through cheque is A/c payee or Bearer cheque in a audit process?
26 May 2010
Actually it is very difficult to verify from the bank statement, because some banks shows as "clearing" and some banks shows the name of the party. For the bearer cheque also, the bank statement shows the name.
The better way to verify is to check the bank statement of the party to whom the cheque is issued. But practically it is not possible for all the party.
Hence auditor has to give the disclaimer of his opinion.
CAclubindia
