Audit of Drawing Power (DP) w.r.t Working Capital

Whenever we are auditing drawing power w.r.t working capital loans, we calculate it based on quarterly statements submitted  by the company to banks. My question is how to verify the figures mentioned in such quarterly statements with books?

Also, what is the resolution if discrepancies arise between the values as per books & quarterly statements?

Replies (2)
Quick Summary
This discussion focuses on auditing drawing power (DP) for working capital loans. It addresses how auditors can verify figures in quarterly statements submitted to banks against the company's own accounting records. The thread also explores the resolution process for discrepancies, suggesting reporting material differences and discussing findings with management first.

If the discrepancies are materially larger in compared to the quantum of the loan then it's better to withhold and report and disclose as per standards.
Nice Queston.

To verify following points must be taken into consideration:

1. Verify the opening balances of Books of Accounts with the Audit report of borrower.

2. Check bank statements to ensure that entries have been passed into correct party account.

3. One may also check party balances with the Thirty party statements or balance confirmation certificates.

4. Check whether physical balances of stocks tallied with Books.

5. Check other elements of Current Assets and Current Liabilities to ensure their correctness level.


If after checking any discrepancies appears, then one must report to the bank or lender. But before that, as a professional courtesy it must be discussed with the management first.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
25 August 2026
Senior Accountant

MG Associates

New Delhi

CA Inter

View Details
Company
Featured 19 August 2026
Chartered Accountant

apricus india

Pune

CA

View Details
Company
28 August 2026
Assistant Manager

NRS AND ASSOCIATES

Kozhikode

CA Inter

View Details
Company
ARTICLESHIP 29 August 2026
Article Assistant

RRPM & ASSOCIATES LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 01 September 2026
Article Assistant

SGNG & Associates

New Delhi

CA Inter

View Details
Company
13 August 2026
Chartered Accountant (FP&A)

Client of Trellis Consulting

Gurgaon

CA

View Details
Company
18 August 2026
Audit Assistant - Remote / Work From Home

CA ANOOP P K & ASSOCIATES

Kozhikode

CA Inter

View Details
Company
29 August 2026
Chartered Accountant

Velionit Consulting PVT LTd

Mumbai

CA

View Details