GOOD QUERIES

The Audit to be started  in the following sequence :

1. Obtain the previous years' balance sheet alongwith groupings.

2. Check the opening balances.

3. Check the purchases/sales bills with sales register (check the Bill no, date of bill, date of booking, quantity, descripttion of goods, correct head of accounting, correct VAT/CST status)

4. Check the cash / petty cash vouchers with cash book. (Check the supporting cash memos, particulars mentioned on vouchers, reasonability of expenses, whether these are personal expenditure ? Nature of expenditure- capital/revenm)

5. Bank Vouchers with Bank Book and reconcile it with Bank Statements (Cash withdrawal/deposits entries must be taken as per cheque clearance date appeared in Bank statement, receipts for the payments to suppliers are attached or not? Customers advices for the payments received vouchers, etc.)

6. Journal Vouchers/Debit & credit note vouchers with journal/dr and cr note registers. (Check the effects of VAT/Excise/Service Tax properly)

7. Check the other records like Excise Records, Customs Records, Service Tax Record, TDS challans, government payments like electricity,telephone,water, licence renewal fees, etc.

8. Obtain the debtors/creditors/bankers/service provides confirmation and check it with the accounts.

9. check closing balances in the books of accouns matched with the trial balance/final balance sheet or not ?

10. Check the statutory records like members registers, directors registers, register u/s 301, 304, 307 under Cos Act for various contracts, directors, shareholders, etc.

11. Check the fixed assets register

12.  Check the documents related with increase in share capital, buyback of shares,  change in directors, acceptance of deposits, etc.

13. Check whether the activity falls under NBFC category or not ? If it attracts the NBFC registration, advice the party and also mention it in audit report.

14. Check whether the depreciation is properly charge or not ? Depreciation is to be charged as per Cos Act. Check it is on SLM or on WDV basis.

Thanks for your immediate reply  Lakshmikant

If this is the first year for a proprietary concern, how to audit?

Add the following points :

1. don't ask the previous year's balance sheet.

2. don't check the opening balances.

3. Check that, the capital introduced by the proprietor is by cheque/cash. If by cheque, from where it is coming ? There is no legal binding, but it will be clear us the base of the proprietor.

Can you please tell me the difference between HUF, AOP, BOI & Individuals?

HUF - Hindu Undivivde Family , in which there is a Karta who is the resposible person

AOP - Assocaition of Person maens group of person for an objective. Here PERSON is a inclusive definition PERSON includes individual , HUF , Comapny , Co-operative society etc.

BOI - Body of Individual . Here BOI means that group Individual for some specified objective. Main difference between AOP & BOI is AOP is group of PERSON & BOI is group is only INDIVIDUAL

Individual is a common man as you know.

Hope now you are clear about this.

thank you sorabh gupta, now my doubt is cleared