Professional Documents
Culture Documents
Confirmation of balances with the banks \ Lending institutions should be obtained on a monthly basis for the purpose of
preparation of bank reconciliation statements.
Confirmation of balances with the Creditors / Debitors should be obtained on a six monthly basis. The balances in the
Creditors\ Debtors Ledger account should also be reconciled with the balances as per the partys books on a six monthly
basis.
Debtors Ledger Trial Balance \ Debtors Ledger account
Check that the balance shown by the Debtors Ledger Trial balance agrees with the balance shown by the Debtors control
account in the General Ledger Trial balance.
Check the Agewise analysis of Sundry Debtors and comment upon it.
Check the Debtors Accounts that are stuck up for long and are doubtful of recovery.
Check the debtors accounts where legal cases have been filed / are to be filed and ascertain the progress in the legal
cases.
Carry out a scrutiny of various Debtors Account in the debtors ledger and check for the following :o Match the Debit and Credit entries individually.
o Give the break up of the closing balance - Invoice wise.
o Ensure that there are no such cases where the payments have been received for later bills and the earlier
invoiced are unpaid.
o Give a break up of the closing balance as above in (b) including the details of any debits on account of
debit notes raised on the parties.
o Prepare a list of Debtors account showing closing credit balances.
o Tally each debit with a corresponding credit to locate any under payment / over payment for any invoices.
Creditors Ledger Trial Balance/Creditors Ledger Account
Check that the balance shown by the Creditors Ledger Trial Balance agrees with the balance shown by the Creditors
control account in the General ledger trial balance.
Check the creditors account that are outstanding to be paid since long (unclaimed Creditors) and that can be considered
for a write back in the books of account.
Carry out a scrutiny of various Creditors account in the creditors ledger and check for the following.
o Match the Credit and Debit entries correspondingly.
o Give the break up of the closing balance Invoice wise.
o Ensure that there are no such cases when the payments have been made for later invoices and the earlier
bills are unpaid.
o Give a break up of the closing balance as above in i (b) including the details of any credits on account of
credit notes raised on the party.
o Prepare a list of creditors account showing closing debit balances alongwith the reasons for debit balances.
Comments or details should be taken from the auditee in respect of every single debit balance.
o Tally each credit with a corresponding debit to locate any over payment /under payment for any invoice.
Check all the Creditors Ledger Trial balance as given below for above details.
Suppliers
Contractors
Transporters
Others
Outstanding Liabilities
Check that the outstanding liabilities pertaining to the earlier years have been adjusted in the books of account.
Excise V/s Accounts Reconciliation
Ensure that a reconciliation statement is prepared on a monthly basis to reconcile the modvat / Cenvat balance in the
excise with the accounts balances.
Check if any old pending entry is appearing in the reconciliation statement.
Check the unreconciled / reconciled difference in the balances shown by the excise records and the accounts records.
TDS
Check that all TDS deductions are deposited in time with the government - check the monthly TDS statement and the
actual date of deposit with the TDS challans.
Check whether the TDS Returns are submitted in time with the Government.
Check that the TDS deductions are made properly from all the payees wherever applicable.
Budget V/s Actual - Expenses
Check the Budget V/s Actual position as on a particular date with the Budget statement for all the expenses - Fixed /
Variable overheads.
Check the Variances between the Budget / Actual figures.
Obtain comments on reasons for variances between the Budget V/s Actual.
Analyse the variances between Budget / Actual in terms of percentage.
Scrutiny of Ledger Account - Expenses / Others
Check that in case of expenses the distination between Capital and Revenue expenditure is properly made.
Check that proper account head has been used to debit the expenses.
Pick up a few entries from the ledger account and trace the entry to the Voucher and the supporting bills / Invoices to
ensure that the expense bills are properly approved / authorized and accounted for.
General Ledger Trial Balance / Revenue ledger Trial Balance
Carry out a scrutiny of the General Ledger Trial balance/Revenue ledger Trial balance and comment on accounts that
need to be reconciled like inter office account / Inter unit account etc.
In case of accounts like TDS Receivable / Interest Receivable/ Insurance claim Receivable / Margin money deposit with
banks ask for the break up / detailed statements of accounts and comment upon it.
In case of Creditors / Debtors account check that the amount as given in the General ledger agree with the balance shown
by the Creditors ledger Trial balance/ Debtors ledger Trial balance.
Check whether any special accounts like suspense account etc are appearing in the trial balance and carry out a scrutiny.
In case of other accounts carry out a review of the ledger of the account to locate any irregularity / reconciliation matter