Auditing - Examples of Audit Program

Audit Program for Sale/Sale Return

The Audit Program for Sale/Sale Return involves the review and check of the following −

·        Complete accounting system right from the receiving of sale orders from customers to the receiving of payment from customers against the generated sale invoice.

·        Indirect Taxation entries like VAT/CST/Excise and Service Tax as applicable.

·        Stock valuation.

·        Generation and approval of credit notes.

·        Provision for doubtful and bad debts.

·        Accounting entries for installment received, interest elements and unrealized profit in case of sale made on hire-purchase system.

Audit Program for Purchase/Purchase Return

The Audit Program for Purchase/Purchase Return involves the review and check of the following −

·        Complete accounting system right from the issuance of purchase orders to suppliers till the payment to suppliers/creditors against the purchase invoice.

·        Checking of department-wise material requisition slips.

·        Authorization of requisition slips and purchase orders.

·        Comparison of quantity and rate of purchase bills with purchase order.

·        Material inward record with purchase bills.

·        Checking of Stock register.

·        Checking of purchase return note with purchase bills.

·        Impact of Indirect Taxation entries on the Cost of Purchase or Input Tax Credit account, CENVAT Account for VAT/CST/Excise and service Tax as applicable.

Audit Program for Cash/Bank

The Audit Program for Cash/Bank involves the review and check of the following −

·        Check posting and balancing of Cash book.

·        Check petty cash book if maintained.

·        Check cash receipt with cash book.

·        Check cash payment voucher with relevant support bills.

·        Authorization of cash payments.

·        Check accounting for cheques/demand draft received.

·        Check cash withdrawal entries with Bank statements and entries in cash book.

·        Checking of direct deposit into bank by parties.

·        Checking of bank reconciliation.

·        Physical verification of cash.

Audit Program for Salary/Wages

The Audit Program for Salary/Wages involves the review and check of the following −

·        Collect organization chart and list of officers.

·        Authorization of above list of employees with salary.

·        Review employment contracts of the employees.

·        Compare authorized salary with expense account.

·        Collection of information about stock option, bonus plan or other incentives as applicable to employees.

·        Scanning of stock register and stock issue record about issuance or reservation of shares to employees.

·        Review Salaries, incentives, bonus and compensation etc. with basic evidence.

·        Check and review legal formalities as applicable to organization such as E.S.I/ provident fund/TDS etc.