Audit Program www.manojmehta.

com

Name of Auditee
Nature of Audit Audit Period
Audit Start Date End Date Audit Staff

Extent of Checked Audit Procedures

SN Area Of Audit Checking By (Scope of Work)
1. Opening Balances Verify opening balances of current ledgers from previous
year certified balance sheet.
2. Cash Vouching (Cash / Petty cash Books): • Make a note on procedure for cash payments/receipts.
a. Cash Payments Vouching (from cash • All payments should be duly authorised & supported by
independent evidences.
payment vouchers/bills or cash
• Prepare separate lists for missing, unsupported &
ledger to cash book)
unauthorised vouchers.
• Note down other irregularities & Queries.
b. Cash Receipts Vouching (from cash • Verify whether transactions fall within the accounting year.
receipt vouchers or cash ledger to • Verify revenue/capital allocations.
cash book) • If materials recd. against cash payment, verify Goods
Inward Note (GIN) or similar.
• Verify account head allocations.
c. Physical Cash Verification
• Verify discounts/rebates recd.
• Conduct physical cash verification as on 31 March.
st

• Conduct surprise physical cash verification if need is felt.

3. Bank Vouching (Bank Book): • Make a note on procedure for cash payments/receipts.
a. Bank Payments Vouching • All payments should be duly authorised & supported by
independent evidences.
(from bank payment vouchers/bills or
• Prepare separate Lists for missing, unsupported &
bank ledger to bank book)
unauthorised vouchers.
• Verify whether transactions fall within the accounting year.
b. Bank Receipts Vouching • Verify revenue/capital allocation
(from bank receipt vouchers or bank • If materials recd.against cheque payment, verify Goods
ledger to bank book) Inward Note (GIN) or similar.
• Verify account head allocations & discounts/rebates recd.
• Follow purchase vouching procedure (point 6 below) if
purchases are booked through this register
4. Bank Reconciliation Statement (BRS): • Verify BRS with bank statements & bank book to determine
Outstanding (uncleared) Cheques cleared & uncleared cheques.
• Verify last month BRS for b/fd. uncleared items & next
Vouching – issued & received (from BRS
month BRS for c/fd. uncleared items.
to bank statements & bank book)
• Verify next month bank statement for cleared cheques.
• Verify year end bank balances with bank certificates.
• Check whether any outdated cheques are c/fd. in BRS.
5. Expense Vouching: • Make a note on procedure for expense bookings.
Vouching of Expense Register • All expense vouchers should be duly authorised &
supported by independent evidences.
• where separate expense register for
• Prepare separate Lists for missing, unsupported &
revenue expenses is present
unauthorised vouchers.
• check from expenses vouchers/ bills • Verify whether transactions fall within the accounting year.
to expenses register • Verify revenue/capital allocation
• If materials recd. against exp. vouchers, verify Goods
Inward Note (GIN) or similar.
• Verify account head allocations & discounts/rebates recd.
• follow purchase vouching procedure (point 6 below) if
purchases are booked through this register
6. Journal Vouching: • Make a note on system of recording journal entries, internal
(from Journal Vouchers to Journal controls & the kind of entries routed through the journal.
Register) • Prepare separate Lists for missing, unsupported &
unauthorised vouchers.
• Verify whether transactions fall within accounting year.
• Verify account head allocations.

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7. Purchase Vouching: • Make a note on system of recording purchases & internal

a. Purchase Vouching controls. Make list of docs forming part of purchase invoice.
• All purchase invoices/vouchers should be duly authorised.
(from purchase invoices/ vouchers to
• Prepare separate Lists for missing & duplicate invoices.
purchase register)
• Note down other irregularities or Queries.
b. Credit Notes Vouching • Verify invoices with Goods Inward Note (GIN) or similar &
(from credit notes to Purchase/ GIN’s with stock record.
Credit Note Register) • Verify whether transactions fall within the accounting year.
c. Creditor’s Ledger Scrutiny • Verify quality control procedures & implementation.
(verify irregular movements, overdue • Verify procedure for damaged/rejected goods & returned
goods with stock record.
balances, dormant accounts, related
• Verify discounts/rebates recd.
parties, high value accounts)
• Verify revenue/capital & account head allocations.
8. Sales Vouching: • Make a note on system of recording sales & internal
a. Sales Vouching controls.
• Make a list of documents that form part of sales invoice.
(from sales invoices/vouchers to
• All sales invoices/vouchers should be duly authorized.
sales register)
• Prepare separate Lists for missing & duplicate invoices.
b. Debit Notes Vouching • Note down other irregularities or Queries.
(from debit notes to Sales/Debit Note • Verify invoices with challans & challans with stock record.
Register) • Verify whether transactions fall within accounting year.
c. Debtor’s Ledger Scrutiny • Verify accounting & valuation of returned goods & its
(verify irregular movements, overdue adjustment to stock record.
• Verify discounts/rebates schemes with actual figures.
balances, dormant accounts, related
• Verify procedure for disposal of scrap, scrap sales & test
parties, high value accounts)
check with stock record.
9. Inventories: • Verify classification of inventories as per Sch. VI.
a. Test check GIN’s with purchase • Verify whether value wise ‘ABC’ Analysis is present? Verify
invoices & challans ‘A’ items 100%, ‘B’ items 50% & ‘C’ items 10-25%.
• Make note on inventory records maintained for raw
b. Test check RM issued to production
materials (RM), work-in-process (WIP) & Finished Goods
with production record (FG) (only FG in case of trading concern).
c. Test check FG received in stores with • Make a note on the system of recording inventories for
production record inward & outward movements, returned or damaged
d. Test check WIP inventory with inventories, by-products or scrap inventories.
production record • Verify the valuation method consistently employed for RM,
WIP & FG.
e. In case of trading concern test check
• Verify compliances with Accounting Standards.
purchase invoices & challans with
• Note down irregularities/Queries.
stock record
• Verify whether procedure for adjustment for obsolete
f. Conduct physical verification of stocks, damaged stocks, scrap etc.
inventories (ideally on 31st March) • Conduct surprise physical verification if necessary.
10. Statutory Compliances: Determine TDS liability from accounts & verify compliance,
also obtain TDS Statement for 3CD report. Verify 15CA-CB
a. eTDS filing (TDS statement, Returns,
Reports for TDS on foreign remittances.
Challans, Forms 15CA-CB etc.)
b. TDS Credits (credits available from Verify TDS credits from accounts to TDS Certificates &
tax deducted by third parties) compare with 26AS statement.

c. eTCS filing (TCS statement, Reutrns, Determine TCS liability from accounts & verify compliance,
Challans etc) also obtain TCS Statement for 3CD report.

d. Service Tax (ST) filing (ST statement, Determine ST liability from accounts & verify compliance,
Returns, challans etc.) also verify 43B impact and 3CD & CARO reporting.

e. VAT filing (VAT summaries, Returns, Determine VAT liability from accounts & verify compliance,
challans etc.) incl. Prof. Tax filing also determine 43B impact on 3CD & CARO reports.

f. Accounting Standards (AS) Determine the AS applicability & verify compliance. Verify
Compliances (use our AS Checklist) disclosures under Co’s Act & Tax Laws. Obtain Related
Parties List as per our Checklist.
g. Transfer Pricing Reporting Determine applicability on Overseas & Domestic
transactions & verify disclosures with ALP workings.
h. MCA Portal Search (obtainMaster Data, Search for other directorships & defaulting status of the
Signatories & Charges created on assets) company & directors.

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Audit Program www.manojmehta.com

11. Ledger Scrutiny & Trial Balance (TB) Verify irregular movements, overdue balances, dormant
Check Year End accounts, related parties, high value accounts. Verify final
ledger balances (TB) with final balance sheet
12. Payroll Vouching: • Make a note on the HR policies & procedures with
a. Test Check Salaries & Wages regards to salaries, allowances/perquisites, sick/casual
Quarterly holiday leave, overtime, bonus/incentives, ESOPS etc.
Registers with Bank entries
• Test check terms of employment with actual
b. Test Check allowances & deductions disbursements
for accuracy • Test check payroll with bank or cash book & ledgers.
Verify whether client is required to provide for ‘employee retirement • Verify statutory deductions like PF, ESIC, gratuity etc.,
benefits’? Make a note on the retirement policy & whether it is as per law? and compliances & disclosures for 3CD, CARO & 43B.
13. Excise Records Verification: • Make a note on excise accounting & recording procedures.
• Verify whether statutory records are maintained as per law.
a. RG 1 Register – Daily Stock Account
• Check all RT-12, monthly excise returns thoroughly.
of Finished Goods (check with
• Make a note on the treatment of excise credits (duty paid
stock/production record)
but unutilised) outstanding at the year end.
b. Annexure IV Register – RM or WIP • Verify compliances with Accounting Standards.
Stock Account issued to production • Make a note on typical issues which may assist in future
(check from inventory issue record) audits.
c. Annexure 10 Register – Input/Modvat • Verify Annexure II in case of Jobwork operations.
Duty Credits A/c. (check purchase • Verify supporting docs like Excise Invoices or Gatepass,
Challans or Delivery Notes, TR6 Challans etc.
invoices for cenvat credits)
• Reconcile excise record with stock records.
d. Ann. 8 Register – Excise Paid A/c. • Verify if Modvat credits at the year end are reduced from
(check sales invoices for duty debits closing stock of finished goods?
& TR6 challans for duty paid/credits)
e. ER-1 – Monthly Return for removal
of goods (check from SI, GIN etc.)
14. Statutory Books/Record: • Make a note on the records/registers maintained.
• Verify accuracy & completeness of entries made.
a. Fixed Assets Register Cursory
• Whether statutory records are maintained as per law?
b. Board / AGM Minutes Book • Verify & make a note of items/resolutions impacting the
c. Section 301 Register (interested party) financial statements.
• Prepare details of issues requiring disclosure in audit report
d. Others – Register of Members, Share
or CARO or 3CD.
Transfers, Foreign Members, Inv. etc.
e. Legal Suits / Cases pending against • Make a note of pending legal suits & its impact on financial
the Client (verify ROC website) statements incl. contingent liabilities.
• Make a note of Tax Litigations and with the tax demands.
f. Tax Litigations (Income tax, Vat,
• Determine whether litigations likely to create a liability or
Service tax, Excise, Customs, Prof. contingent liability & related disclosures.
tax, duties/cess etc.) • Audit Report, CARO & 3CD Disclosures.
g. Register of Charges in respect of • Verify accuracy & completeness of entries made.
institution/bank loans (verify ROC • Verify & make note on the documentation with bank,
website) securities offered, guarantees, collateral etc.
• CARO, 3CD Disclosures & 43B disallowance.
General: (put your ticks on each items, upon completion)
(a) Obtain management engagement letters before starting audit and management representations post audit.
(b) Make general notes (and attach it with this program) on each area of audit (like sales, purchase, bank/cash, stocks etc.)
for typical issues so as to help audit process of subsequent years.
(c) Verify applicability of Wealth Tax Act, Cost Audit, CARO, Cash Flow etc., & prepare appropriate details.

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