What points need to given importance in the audit of liqour/wine contactors?
VEDANTA DESHIKA
(Practice)
(317 Points)
Replied 29 June 2010
as per my knowledge, you shud first u/s da constitution of the Organisation, study the process of manufacturing their system of accounting for revenues and booking expenses The most imp thing would be the Indirect tax implications like Excise, Octroi , and other duties.
Normal Audit functions needs to be conducted
Rajeev Sharma
(Others)
(48 Points)
Replied 04 July 2010
Normally liquor contractrs are manufacturing on behalf of the brand owners.
For carrying out the manufacturing operations, the contactors are entitled to a bittling fees per case.
To start with you can check the following specific things-
- Review of contracts
- Review of manufcaturing licence ( it has to be renewed every year, if not it may affect going concern)
- Study the excise rules for the state in which the maufcaturing plant is located ( in liquor excise is a state subject.
- Inventory valuation is key aspect.
Furtther if you can provide details regarding what type of contarctor and what is the arrangement , i can advise you further
Naina
(CA Student)
(477 Points)
Replied 12 September 2010
The proprietorship firm which we are auditing have got licence for the first time in F.Y. 2009-10 and their licence didn't continue in 2010-11. To my surprise, they haven't maintained any bank account.
So is it common for such industry. Please provide me more details about auditing liquor contractors.
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