STATUTORY

 
AUDIT
       
1.   Name of The Client :  
     
2. Particulars of Establishments:  
a. Registered Office:
b. Head Office :
  c. Branches :  
d. Factory :

3. Nature of  Business Carried On :  

Changes(ifany) :
   
List of Sistem Concern
     
4. Financial Year of the Audit :  
     
5. Basis of Accounting Followed by The Company :  
    Changes( if any) :  
     
6. Income tax Particulars:  
 Pan No. :
 Ward / Circle :
 Tan No. :
   
 Assessment Completed Upto :
 Particulars of Assessment :

7. Preliminary Works :  
a. Ensure that Auditor’s Appointment Letters are obtained and acceptance
replied.
b. Obtain the Last year’s Balance Sheet, Profit & Loss Account & Tax Audit
Report
c. Study and evaluate the Accounting System/ Policies & Internal controls
d. Determine the nature, timing & extent of other audit procedures
e. Ensure Opening balances c/f correctly
f. (If Manual : Obtain Trial Balance
g. Check the recasting, grouping & summarizing of transactions in the
  Financial Statements  
h. Carryout the Scrutiny of Accounts
i. Compare the profitability i.e GP and NP of the preceding three years
j. If Computerized: Check the recasting, grouping & summarizing of
transactions in the Financial Statements and Ledger scrutiny of the
Accounts on computer.
k. Observation of the Ledger scrutiny to be made in the following format:-
l. Date Head of natute of Observations Rectification of entry account
Transaction

8. Informations to be document/checked  
  A) Share Capital Opening Addition closing  
   Authorised  
 Issued & Subscribed
  If Further Issued
 Enclose the Details showing
 Name, Address, Amount, Mode of Payment, date etc.
 Copy of Allotment Filed with ROC
 Cross check with the Members Register

  B) Loans & Advances Taken Sanctioned Limit  

     
  1. SECURED LOANS TERM LOAN CASH CREDIT  
 From Banks
 (Nature of Security)
 From Others
 (Nature of Security)
 Vehical Loans
 Obtain the Statement of Accounts from the financier Bank/ Institution and
 Also obtain interest certificate as to compare with the balance in the
Books.
 If the loans are intrest free, obtain certificate to that effect.
   
 If the loans are obtained from Directors/ Sharholders, obtain certificate
that the same is not given out of borrowed funds.
 Note:- Enclose the details of loans and advances taken during the year
showing Opening
 balance, Additions , Repayment, interest credited , Tax Deducted and any
other
 adjustments , so as to agree with the total opening and total closing
balance and maximum outstanding during the year.

* Check the compliance of the provision u/s 269 SS & u/s269 T of the Income Tax
Act
** Check the Compliance of the Provisions of Section 292/293 of the Companies
   
Act
Deviations if any to be reported here:
** Check the charges on assets w.r.t loans are filed with the ROC.
     
  2. UNSECURED LOANS :  
 From Banks :
 From Prom Others :
   
 From Others :

  (Information as required above to be furnished here also)  

     
9. FIXED ASSETS:  
  i. Check the additions / deletions during the year with supporting Bills .  
ii. Ensure that all the related expenses are capitalised.
iii. Proper accounting and income tax treatment of assets sold during the
year.
iv. Check the depreciation Calculated and the rates consistently applied.
v. Prepare the Depreciation Chart under Co’s Act and IT Act
vi. Check the Titles & Documents in the possession of the Client to ensure
the existence and right of the Assets.
vii. Obtain the Ledger Copy of Fixed Assets.
 viii. Check that Fixed Assets Register is maintained.

10.INVESTMENTS  
 Details of Investments at the Year end
 Check the income accrued on the Investments
   
 Disclosure requirements under Schedule VI.

11.INVENTORY  
 Check the Method of Valuation of the Closing Stock
 Reconcile the physical / book items of inventory showing opening
balances, purchases , issued for consumption/sales , short & excess and
closing Stock with the Excise Records.
 Also trace the deviations if any from the method of valuation of Stock,
purchases, sale according to section 145A of the Income Tax Act.
 According to the provisions of the said section all duties, cess, taxes and
levies are to be Included at the first instance in the said items including
  provisions for excise duty on closing stock of finished goods.  
 Check the Compliance of the Accounting Standard -2 " Valuation of
Inventories."
 It may be noted that the said Accounting Standard ignores the CENVAT
adjustments and only exclusive method is permissible.
 The Sock statement submitted to bank to be obtained.
Sheet of physical verification conducted by the management to be
obtained.

12.CASH & BANK BALANCES  

 Obtain the Bank Reconciliation statement from the client along with the
bank statement balance at the year end.
 Check any items of reconciliation pending for a long time and their impact
on the financial Statements. Verify subsequent clearance of items
pending as on 31st March in the month of April, May etc.
o Check daily cash balance for negative balance.
  o Verify cash payment of April to verify the expenses related to 
Audit Period.
o Verify heavy cash balance in hand and subsequent withdrawal
from bank to be enquired.
o Verify Contra entries in cash book, bank book and bank
statement simultaneously to identify bearer cheque payments.

     
13.CUSTOMER’S DUES  
  i. Carry out the Ledger scrutiny of customers  
ii. Obtain the confirmations from the customers possibly
iii. Test Check the subsquent recoveries in the following year
iv. Obtain the outstanding more than 6 months
v. Dues frm directors to be disclosed separetely
o Check provision/ write off of time barred debts i.e outstanding for
a period exceeding three years.
o Scrutinise sales to sisiter concern, ensure that same are at
market rate/ at rate charged to other parties.
 o Obtain information as to legal cases going on with the customer.

14.LOANS & ADVANCES GIVEN  

i. Prepare the Chart of Loans and advances given showing the opening
balance, additions, repayment , interest charged , tds deducted and other
adjustments made during the year.
ii. Check the Compliances as per para 8(B) above.
iii. List out the deviations if any.
   
iv. Obtain the details of Due from directors with maximum outstanding during
the year
v. Obtain ledger copy of interest free loans given to any party.
vi. Ensure proper disclosure is made w.r.t security aspects.

15.SUPPLIER’S DUES  
i. Carry out the Ledger scrutiny of suppliers
ii. Obtain the confirmations from the suppliers possibly
iii. Test Check the subsequent payments in the following year
  iv. Test Check the posting of bills of suppliers specially at the ear end  
Scrutinise transaction with sister concern for rates and other terms. Check
whether old dues no longer payable are required to be written back.

16.PROVISIONS FOR TAXATION  

i. Ensure the taxation provided according to the taxation Laws applicable at
the date of balance Sheet
ii. Check the adequacy or deficiency of the provisions for taxation.
iii. Ensure that provision for tax is made in accordance with the AS-22. "
   
Deferred Tax"
iv. Ensure that Provisions u/s 115JB MAT is also considered.
v. Impact of latest assessment on the Accounts.

17.OTHER LIABILITIES & CONTINGENCIES:  

i. Ensure that all losses and laibilities provided for
ii. If possible discuss with the management ofr such ensurance.
   
iii. Take management representation of all legal cases going on.

18.MISC. EXPENDITURES  
i. List out the expenditures covered under this head and its amortisation
  during the year  

19.REVENUE ITEMS :  
  SALES  
i. Verify the sales with quarterly statements submitted with the Sales tax
Department
ii. differences if any to be checked
iii. Check the usual trade discounts e.g. Qty dis, Lifting dis, rate dis etc. and
their treatments in the accounts.
   
iv. Cut off procedures adopted at the year end.
v. Treatment of excise duty on sales in the accounts
vi. Check sale for April month to ensure that it does not include sales
effected in the year under audit.
20.OTHER INCOME : Check the recognition of income in respect of the following:-  
i. INTEREST INCOME : corelate the same with TDS receivable for the year.
ii. EXPORT INCENTIVES : Obtain the Invoice wise details of duty
drawbacks, import Licence Premiums & othe entitlements etc. check any
such claims received up to the date of audit.
iii. ESCALATION OF PRICES
  iv. SALE OF NON- CURRENT ASSETS  
v. INSURANCE CLAIMS
vi. COMMISSION INCOME : Obtain the documentry evidence, Agrrements,
and calculation of commission and their recognition in the Accounts.
vii. Others if any;

21.PURCHASE  
i. Check the purchases with supporting Invoices/ GRN Date/ date of receipt
ii. Check the cut off proceders at the year end
iii. Carry out the Test Checks with suppliers Accounts.
iv. Treatment of Excise duty / MODVAT in the Accounts
   
v. Check purchases of April to ensure that there are no goods in transit.
vi. Accounting treatment of discounts awailed on purchase.
vii. Import Purchase the as per format required.

22.EXPENDITURE :  
  Obtain the monthly details of following major expenditures such as:  
 Salary ( Personwise)
 Wages (Personwise)
 Directors Remuneration (person wise)
   Rent  
 Telephone Expenses
 Payment of Excise duty

  Repair & maintenance : Determination of Revenue/capital expenditure  

 Interest paid
 Commission paid
 Discount given
   
 Amortisation of expenses
 Depreciation

ESI & EPF and other Retirement Benefits as per AS -15 Exps. : Refer to Annexure
   
-... 3CD Report
Note:- Ensure that the Extraordinary & Prior Period items are disclosed in the
   
financial statements and also obtain the details.
     
23.ANALYTICAL REVIEW PROCEDURES  
  1. Calculate the following ratios  
a. G/P Ratio
b. N/P Ratio
  c. Material consumptio to cost of Production  
d. Inventory Turnover Ratio

  2 . Also Calculate the following Ratios to sales:  

   Selling & Distribution Exps.  
  Machinery & factory maintenance
 Staff welfare Exps.

ABOUT THE CONSTITION OF THE MANAGEMENT NAME OF PARTNERS

24.  
NAME OF DIRECTORS CHANGES( if any)
     
ENQUIRIES TO BE CARRIED OUT U/S 227 (1A) OF THE COMPANIES ACT
25.  
1956 IN RESPECT OF THE FOLLOWING :
a. Whether the loans and Advances shown in the books as deposits.
b. Whether the terms and conditions on which loans & advances have been
made are not prejudicial to the interest of the of the company or its
members.
c. Where it is stated in the books of Accounts that the during the year shares
have been allotted for cash , Check whether the cash has been actually
received.
d. Whether the entries made in the books merely by book entries are
  prejudicial to the interest of the company.
e. Whether the personal expenses have been charged to the Revenue
accounts
f. Where the Company is not an investment Company within the meaning of
section 370 B of the companies Act 1956, Check whether the shares of
the company have been sold at below the cost at which it was purchased.
g. Any taxes, duty and cess outstanding for a period exceeding six months.

ADVERSE POINTS (If any):