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.
