Audit procedure in case of the the fallowing situation

Internal Audit 413 views 5 replies

CA Devaraju Narisetti

320 Points Joined July 2014

I need guidence regarding the Fallowing issues

we are Conducting the Internal audit for the Pharmacy where they are operating in different location and they offer the dicount to the customer as fallows

1.Bill More than Rs. 100/- 10% of the Bill

2.Bill More than Rs.1000/- 12% of the Bill

3.Bill More than Rs.1500/- 15% of the Bill

Now the Issue is that,

Eg. The bill of a Customer X is Rs.95/- and bill of customer Y id Rs.80/- and the stratagy of the billing person is to Club them and both and Pocket the Dicount in his pocket. where the Individual bills are not eligible for Discount.

Now the Questions are

1.How to identify this Transactions and what audit Procedure are performed to know them,

2. And what the suggestion to the management to aviod this type of issues.

Answer me as early as possible

Thanks

Replies (5)

CA Amrita Chattopadhyay

Audit & Assurance

13864 Points Joined July 2011

The policy adopted by the company is to offer discount to the customer for procuring of the pharmacy.

In your situation, the there are two different customers who are entitled for discount. You have to stratify the sales data customer wise and compare them with the discount on one to one basis to find out the difference. You may also compare the bill wise sales data with customer wise sales data.

CA Devaraju Narisetti

320 Points Joined July 2014

Tq CA Amrita Ji

Gopalakrishna Mahesh

Chartered Accountant

211 Points Joined May 2016

It is advisable to go for Stratified sample Vouching of invoices along with the sales Ledger.
Choose a majority of samples which are Below the bill value of Rs.100 and verify the same with the ledger data.