Respected All,
Greetings!!
I am in an audit wherein the area allocated to me for auditing is [b]debit note [/b]as well as [b]product publicity expenses[/b]... Since i will be auditing these areas for the very first time, so i request the members to guide me with the audit steps which i should follow to ensure that all the aspects are covered by me...Do let me know which all points should i keep in mind while doing analysis for my observation...which i can bring in to the notice of the management...
In aspiration of your advice..
VARTIKA PANDE.
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Urgent !!!!
Replies (5)
For Product publicity u may followfollowing steps:
1. First see what is co.'s policy regarding these expenses.
2. Then see what type of publicity expenses are being incurred by client.
3. Are there some contract with different venders regarding these expenses? if yes then check expenses are being incurred in accordance with such contracts.
4. Is there any cost saving possible for these expenses? it may be through savings in transportation Expenses, New vender development, Quantity discount, Just in time Purchases etc.
For reporting purpose always show the monetary effect of any observation, u may be highlighting.
Thanking You
-Sachin Jain
S.S.Kothari Mehta & Co.
09871371922
1. First see what is co.'s policy regarding these expenses.
2. Then see what type of publicity expenses are being incurred by client.
3. Are there some contract with different venders regarding these expenses? if yes then check expenses are being incurred in accordance with such contracts.
4. Is there any cost saving possible for these expenses? it may be through savings in transportation Expenses, New vender development, Quantity discount, Just in time Purchases etc.
For reporting purpose always show the monetary effect of any observation, u may be highlighting.
Thanking You
-Sachin Jain
S.S.Kothari Mehta & Co.
09871371922
The One Says:
I assume this is an Internal Audit. In addition to Mr. Jain's post -
With regard to debit note (which essentially serves the same purpose as an invoice) the usual checks would be with regard to internal control in the area (Key factors - issued for bonafide transactions, updates in accounts, authorization, company policy). If they are reasonably sound then use sampling procedures.
With regard to product publicity expenses the scope of audit would dictate the amount of work you would want to put in - this could be from ensuring compliance with company policy and could extend upto the effectiveness of the expenditure - this is a marketing tool basically advertising - so what kind of research was done, what is the expense, is it reasonable, similar expenditure by related companies, effectiveness of expense, pre-post comparisons, etc.
Hope its useful.....
I assume this is an Internal Audit. In addition to Mr. Jain's post -
With regard to debit note (which essentially serves the same purpose as an invoice) the usual checks would be with regard to internal control in the area (Key factors - issued for bonafide transactions, updates in accounts, authorization, company policy). If they are reasonably sound then use sampling procedures.
With regard to product publicity expenses the scope of audit would dictate the amount of work you would want to put in - this could be from ensuring compliance with company policy and could extend upto the effectiveness of the expenditure - this is a marketing tool basically advertising - so what kind of research was done, what is the expense, is it reasonable, similar expenditure by related companies, effectiveness of expense, pre-post comparisons, etc.
Hope its useful.....
The One Says:
In case its a Statutory Audit then matters are less complicated you should find out the existing policy of the company first and then devise checks to find out if it has been complied with - and also if any related parties are involved - if so are the prices those prevailing in the market. Are the directors involved in any of the transactions - I prefer the 80:20 Rule check 80 percent of high value items and 20 percent of low value items.
Let me add debit note received is different from debit note issued (I am sure you must know it) - credit note is exchanged for debit note - and in cases debit/credit notes are used to rectify the errors in the invoice originally issed - so this is an onerous area.
Sure I remember we had quite a good conversation with regard to HR Policies.
In case its a Statutory Audit then matters are less complicated you should find out the existing policy of the company first and then devise checks to find out if it has been complied with - and also if any related parties are involved - if so are the prices those prevailing in the market. Are the directors involved in any of the transactions - I prefer the 80:20 Rule check 80 percent of high value items and 20 percent of low value items.
Let me add debit note received is different from debit note issued (I am sure you must know it) - credit note is exchanged for debit note - and in cases debit/credit notes are used to rectify the errors in the invoice originally issed - so this is an onerous area.
Sure I remember we had quite a good conversation with regard to HR Policies.
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