Professional Documents
Culture Documents
Audit Chapter 1
Audit Chapter 1
Audit Chapter 1
CHAPTER 4: ANALYSIS 40
CONCLUSION 58
RECOMMENDATION 60
APPENDICS
REFRENCES 67
6
CHAPTER 1:
7
INTRODUCTION
AUDITING
The term audit usually refers to a financial statement audit. A financial audit
is an objective examination and evaluation of the financial statements of an
organization to make sure that the financial records are a fair and accurate
representation of the transactions they claim to represent. The audit can be
conducted internally by employees of the organization or externally by an
outside Certified Public Accountant (CPA) firm.
8
In India, the ICAI (Institute of Chartered Accountants of India) has a list of
Standards of Auditing that lay out the rules, procedures, methods etc about
auditing, both internal and external. In all, there are 35 of these Auditing and
Assurance Standards (AAS) as of now.
KEY TAKEWAYS
There are three main types of audits: external audits, internal audits,
and Internal Revenue Service (IRS) audits.
External audits are commonly performed by Certified Public
Accounting (CPA) firms and result in an auditor's opinion which is
included in the audit report.
An unqualified, or clean, audit opinion means that the auditor has not
identified any material misstatement as a result of his or her review of
the financial statements.
External audits can include a review of both financial statements and a
company's internal controls.
Internal audits serve as a managerial tool to make improvements to
processes and internal controls.
Understanding Audits
Almost all companies receive a yearly audit of their financial statements,
such as the income statement, balance sheet, and cash flow statement.
Lenders often require the results of an external audit annually as part of their
debt covenants. For some companies, audits are a legal requirement due to
the compelling incentives to intentionally misstate financial information in
an attempt to commit fraud. As a result of the Sarbanes-Oxley Act (SOX) of
9
2002, publicly traded companies must also receive an evaluation of the
effectiveness of their internal controls.
Types of Audits
External Audits
Audits performed by outside parties can be extremely helpful in removing
any bias in reviewing the state of a company's financials. Financial audits
seek to identify if there are any material misstatements in the financial
statements. An unqualified, or clean, auditor's opinion provides financial
statement users with confidence that the financials are both accurate and
complete. External audits, therefore, allow stakeholders to make better, more
informed decisions related to the company being audited.
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auditor's opinion expressed on items being audited (a company's financials,
internal controls, or a system) can be candid and honest without it affecting
daily work relationships within the company.
Internal Audits
Internal auditors are employed by the company or organization for whom
they are performing an audit, and the resulting audit report is given directly
to management and the board of directors. Consultant auditors, while not
employed internally, use the standards of the company they are auditing as
opposed to a separate set of standards. These types of auditors are used when
an organization doesn’t have the in-house resources to audit certain parts of
their own operations.
The results of the internal audit are used to make managerial changes and
improvements to internal controls. The purpose of an internal audit is to
ensure compliance with laws and regulations and to help maintain accurate
and timely financial reporting and data collection. It also provides a benefit
to management by identifying flaws in internal control or financial reporting
prior to its review by external auditors.
11
IRS audit selection is usually made by random statistical formulas that
analyze a taxpayer's return and compare it to similar returns. A taxpayer may
also be selected for an audit if they have any dealings with another person or
company who was found to have tax errors on their audit.
There are three possible IRS audit outcomes available: no change to the tax
return, a change that is accepted by the taxpayer, or a change that the
taxpayer disagrees with. If the change is accepted, the taxpayer may owe
additional taxes or penalties. If the taxpayer disagrees, there is a process to
follow that may include mediation or an appeal.
CONCEPTS OF AUDITING
Investigation vs Auditing
Auditing is the general check to verify the accuracy of the accounts. But in
certain cases, a more in-detail look is required into specific areas. This is what
we call an investigation which forms a part of forensic accounting. So let us
further study the concept and differences of auditing and investigation.
12
Advantages of Auditing
They will be satisfied with the workings of their various departments and the
overall efficiency and profitability of their business operations. It is the same
case with investors, who will find assurance in the books of accounts after
auditing.
An error is something that is done without the intention to fraud the company,
it is an innocent mistake. Fraud, on the other hand, is deliberate. During the
process of auditing, both errors and frauds are discovered. Auditing also helps
prevent such errors and frauds. It creates a fear of being detected.
So auditing helps us minimize the risks of errors and frauds in our books of
accounts but does not eliminate the risk entirely. There is always the chance
that the error may go unnoticed, and the fraud is very cleverly hidden so may
go undetected.
If the auditor is an external auditor, the business can get a second opinion on
their financial statements and their financial standing as well.
13
An external auditor will closely inspect the books and be completely true and
fair in his opinion as he has no hidden agenda. If he says the accounts are true
and fair, it has a lot of weightage with the company and the investors.
3. Moral Check
One of the other advantages of auditing is that the staff and the workers of the
company do not try to steal or defraud the company. They are under constant
scrutiny since they know that the accounts will be audited. Any irregularities
can be identified during such an audit, and they will be caught eventually. This
helps the staff in being honest and responsible at all times.
4. Stakeholders Confidence
Limitations of Auditing
1. Cost Factor
A very thorough and detailed audit would be a costly affair. It is not cost
effective. So the auditor has to limit the scope of his audit and use techniques
like sampling and test checking.
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2. Time Factor
3. Inconclusive Evidence
Generally, the audit evidence the auditor collects is persuasive in nature, not
conclusive in nature. So there is never cent percent conclusive evidence in
most cases while auditing.
This is one of the major limitations of auditing. There also a lot of use of
estimates in accounting. The auditor cannot measure or comment on the exact
accuracy of these estimates. He has to rely on his knowledge.
SA- 200 describes the nine basic principles that govern the procedure of
auditing. It lists out the roles and responsibilities of the auditor and his general
code of conduct during an audit. We will look into these principles in brief.
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1. Integrity, Independence and Objectivity
2. Confidentiality
The auditor must be experienced and trained in the procedures of auditing, i.e.
must be qualified as an auditor. And as a professional, he must be up to date
on recent changes, announcements, rules etc.
If necessary he can undergo training and workshops to stay up to date with the
recent auditing and accounting procedures. For example, after GST was
introduced, auditors had to update their knowledge.
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4. Work Performed by Others
The scope of audit at times can be very vast. So an auditor has employees,
delegates and other people who work under him.
However, the auditor will continue to be fully responsible for the work done
by these people working for him. So the auditor must carefully supervise and
review such work and be reasonably sure of the accuracy of such work.
5. Documentation
In most cases the auditor maintains an audit notebook, an audit plan and
auditing file. It is important the auditor keeps a record of important documents
with respect to his audit work, as it is evidence of the work the auditor has
done. And the client is inclined to these documents and files if he wishes to
inspect the work.
6. Planning
An audit plan allows the auditor t plan out his work and enables him to be
more efficient and timely. Every audit plan is different as it has to be
customized according to the type of organization, the kind of business they
conduct, the scope of the audit, the efficiency of the internal controls etc.
7. Audit Evidence
The auditor must collect enough evidence to support his final opinion. This
collection of such evidence is done by compliance and substantive procedures.
There are two sources of this evidence – internal and external. Also, external
sources of evidence are always more reliable.
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8. Accounting Systems and Internal Controls
The auditor has to assure that the accounts of the organization are accurate and
represent a true and fair picture of the financial status of the company. Also,
the auditor must ensure that all material information has been recorded in the
accounts. Testing the internal controls system is also important as it helps
determine the same.
The primary objective of any audit is the review of all systems and procedures
that relate to the accounting and financial processes. The auditor must first
understand the system and its functionality before he started with the audit of
the final statements of accounts. It will be the base of the entire auditing
exercise.
The effectiveness of the organizations internal control system will dictate the
scope of the audit. If the internal controls of the company are in place and very
18
effective, then the auditor can rely on the system. Then he need no go through
the accounts very minutely.
However, if on the other hand the internal controls are not effective, the
auditor has to go through the accounts with a fine tooth comb. And as per
CARO 2003, it is compulsory for the auditor to review the internal control
system.
3. Arithmetical Accuracy
The auditor must also routinely check the accuracy of the books of accounts.
This includes checking the arithmetical accuracy of the books, by ensuring the
posting of the entries is perfect.
4. Accounting Principles
The auditor must ensure that proper distinction is made between the capital
and revenue transactions. All financial transactions must be properly
categorized as either revenue or capital transactions. The auditor must also
check the items of both income and expenditure for their accuracy.
5. Verification of Assets
The auditor must physically verify all the assets of the company. So he must
check all the legal documents, certificates, official statements etc. to analyse
the ownership of all assets. The auditor will also have to ensure no assets have
been left out of the balance sheet either.
19
6. Verification of Liabilities
The auditor must also verify all the liabilities of the organization. Again he
will inspect all documents, letters, certificates etc. If necessary he can ask third
parties for confirmation as well.
7. Vouching
Ever financial transacting leaves a paper trail. The auditor has to examine
these supporting documents to check the existence and accuracy of these
transactions. This is known as vouching. For example the organization has
shown an electricity expense of 12,000/-. Then the auditor must inspect the
electricity bill to cross check this transaction.
8. Statutory Compliance
It is the duty of the auditor to check that the financial records of the company
are in compliance with all the laws, rules and regulations in effect at any given
time. So he must make sure that the accounts are in compliance with the
Companies Act 2003, Income Tax Act 1961 etc.
Auditing Standards
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As of 2012, PCAOB has 15 permanent standards approved by the SEC and a
number of interim standards that reflect generally accepted auditing
standards, as described in standards issued by the Auditing Standards Board
(ASB), which is part of the American Institute of CPAs (AICPA).
The ASB also issues Statements on Auditing Standards (SASs) that apply to
preparing and releasing audit reports for nonissues (companies not required
to register with the SEC). AICPA members who audit a nonissuer are
required by the AICPA Code of Professional Conduct to comply with these
standards. As of 2012, there are more than 60 active standards.
Audit Planning
21
For internal auditing, the Institute of Internal Auditors provides guidance for
audit planning. Planning starts with determining the scope and objectives of
the audit.
22
Audit procedures are the processes and methods that auditors perform to
obtain audit evidence which enables them to make a conclusion on the set
audit objective and express their opinion. Sometimes we call audit
procedures as audit programs.
These two are the same thing. Auditors normally prepare audit procedures at
the planning stages once they identified audit objective, audit scope, audit
approach, and risks.
Auditors design audit procedures to detect all kind of risks that they
identified and ensuring that the required audit evidence is obtained
sufficiently and appropriately.
Normally, audit partners need to approve on audit plan and audit procedures
before the audit team could perform their testing. This is to make sure that
all concern or risks are address in the procedures. Audit procedures might be
different from client to client, and period to period. This is because internal
control over financial reporting is different from one client to another and
the control might be change from time to time. The auditor might need to
update audit procedures from time to time event thought current financial
statements had been audited by its firm or team.
Classification testing.
23
Completeness testing.
Audit procedures can test to see if any transactions are missing from the
accounting records. For example, the client's bank statements could be
perused to see if any payments to suppliers were not recorded in the
books, or if cash receipts from customers were not recorded. As another
example, inquiries can be made with management and third parties to see
if the client has additional obligations that have not been recognized in
the financial statements.
Cutoff testing.
Occurrence testing.
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listed on the sales ledger, along with supporting documentation such as a
customer order and shipping documentation.
Existence testing.
Audit procedures can be followed to see if a client actually owns all of its
assets. For example, inquiries can be made to see if inventory is actually
owned by the client, or if it is instead being held on consignment from a
third party.
Valuation testing.
25
CHAPTER 2:
26
PROFILE OF THE FIRM
Tele: +91-141-4068778
Web: www.sapaassociates.com
E-mail: sapaandassociates@gmail.com
27
BACKGROUND
The name of SAPA & Associates has been synonymous with service,
quality and integrity in Central India. The head office of the firm is located
in Jaipur and is well equipped with all latest and modern infrastructure
facilities like Computers, Fax, E-mail, Library of books and periodicals on
all subject. The firm has its branches in Bhopal and Indore headed by
Partner / Chartered Accountant at each location and proposed to have branch
in Mumbai and New Delhi soon. The firm has approximately 25
professional staff. Besides, the firm is associated with experts of various
fields viz. engineers, MBAs, etc.
We have provided our professional services to many clients, large and small,
established and new. Our clients include individuals, small and large private
and public limited companies, public sector undertakings, banks and
financial institutions and non-profit organisations, both on the local and
national scene.
We help in many ways in the profession, which has diversified rapidly and
in response to a demand for specialised knowledge and expertise, our
services have expanded well beyond the scope of auditing and accounting.
We also prepare business plans for clients looking to obtain finance in order
to commence or expand. These contain cash-flow forecasts and profit
projections which, used in conjunction with management accounts, provide a
valuable source of management information on an ongoing basis.
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accounting services, manpower management, SAPA Associates is a
professionally managed partnership firm. The Team consists of distinguished
Chartered Accountants, corporate financial advisors and tax consultants. The
firm represents a combination of specialized skills, which are geared to offers
sound financial advice and personalized proactive services. Those associated with
the firm have regular interaction with industry and other professionals which
enables the firm to keep pace with contemporary developments and to meet the
needs of its clients.
COMMITMENT
29
M ISSION STATEM ENT
PRACTICE
The name of SAPA & Associates has been synonymous with service, quality
and integrity in Central India. The head office of the firm is located in Jaipur
and is well equipped with all latest and modern infrastructure facilities like
Computers, Fax, E-mail, Library of books and periodicals on all subject. The
firm has its associates at various big city of India headed by Senior
Chartered Accountant at each location. The firm has approximately 15
professional staff. Besides, the firm is associated with experts of various
fields viz. Architects, Lawyers, CS, MBAs, etc.
30
We have provided our professional services to many clients, large and small,
established and new. Our clients include individuals, small and large private
and public limited companies, public sector undertakings, banks and
financial institutions and non-profit organisations, both on the local and
national scene.
0We help in many ways in the profession, which has diversified rapidly and
in response to a demand for specialized knowledge and expertise, our
services have expanded well beyond the scope of auditing and accounting.
We also prepare business plans for clients looking to obtain finance in order
to commence or expand. These contain cash-flow forecasts and profit
projections which, used in conjunction with management accounts, provide a
valuable source of management information on an ongoing basis.
COMPANY SERVICES
• Development of MIS
• Supervision of systems
• Analysis of performance
We also provide manpower and assist our client to maintain proper books of
accounts in compliance of various Accounting Standards issue by the
31
Institute of Chartered Accountants of India and under various applicable law
of the land.
32
• Assist in the selection of executive personnel in the areas of
production, marketing, accounts, data processing, personnel, general
administration etc.
33
Audit & Allied Services
Our audit and allied services provide clients with a constructive and
innovative approach to their needs. We place great emphasis on partner’s
involvement and an up-to-date understanding of our client’s business and
industry. This helps us to identify potential areas of risk, to communicate
more effectively with management and to develop an approach that is less
disruptive and enhances the benefits that client’s receive from our services.
We provide following type of audits suitable to the needs of clients:
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MISSION
VISION
• Highest
• Flexible solution.
• Competitive Pricing
• Accuracy
• Technology
• Innovation
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OBJECTIVES OF THE COMPANY
36
CHAPTER 3:
RESEARCH METHODOLOGY
37
METHODOLOGY
38
OBJECTIVES OF THE STUDY
39
CHAPTER 4:
ANALYSIS
40
Audit procedures followed by SAPA ASSOCIATES
It is another fact that before starting the audit procedure there presents a series of
more procedures. For example audit engagement letter, audit clearance letter,
team meeting etc.
41
Engagement Procedures
NEW CLIENTS
42
STAGE – 1: Client requires for technical and financial proposal from the
SAPA ASSOCIATES.
Client generally gives circular with the newspaper or directly wants proposal
for audit from the audit firm. In case of direct offer they request to the audit
firm to submit a quotation for the cost of conducting audit of the client. They also
mention the specific date to confirm the decision taken by the audit firm and
completion date for audits. The client firm mentions here the key areas of
the audit in the form of attachment. It assures that if SAPAASSOCIATES
audits client’s firm, they will supply the formal terms of reference/audit
mandates to govern the conduct of audit.
After reviewing the client letter or paper’s circular, audit firm drafts a proposal
letter to the client. The proposal letter contains technical and financial proposal
for carrying out the subject of audit. SAPAASSOCIATES estimates its
personnel costs after considering the mandates to be utilized and using the
minimum hourly rate of fees as prescribed by The Instituted of Chartered
Accountants of India (ICAI). The firm also mentions that as it is an estimate, the
cost may vary with variation in number of mandates estimated to be utilized for
the job.
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purpose. From the technical and financial proposal of the SAPAASSOCIATES
the client company understands the nature of the audit (such as
independent, external) to assess the organization’s internal control system
in administering the matter of audit.
44
Types of Audit Procedures
There are seven steps involved in the procedures that come one after another. The
procedures followed by the SAPAASSOCIATES are basically inspired by the
approaches suggested by ICAI in Audit Practice Manual. Steps are as follows:
45
CLIENT’S AUDIT PROCEDURE
audit the apartment for a period of four weeks. There they send an audit team
H.L.SHAH ASSOCIATES
Audit process
It is a sequential order of steps followed by the auditor in the examination
of client records. The audit process may vary depending upon the nature of
the engagement, its objectives, and type of audit assurance desired. The
process includes understanding the particular client's environment,
conducting the auditing procedures and tests, appraising the audit results,
and communicating the results to interested parties.
46
Audit process and procedures in India
The audit firm India are regulated and guided by the Institute of Chartered
Accountants Of India. ICAI has suggested and provided the firm with
different subject regarding auditing. Like others it has suggested auditing
procedures that can be followed by the audit firm in India in its Audit Practice
Manual.
Audit process suggested by Audit Practice Manual (APM) may be
summarized as follows.
1. Planning.
2. Collection of evidence.
Audit Process
47
Planning
The APM audit programs are comprehensive and designed to deal with
most eventualities. However, it is crucial that the programs are tailored to
meet particular circumstances of the client.
This section deals with how partner can review the overall audit and
form an opinion. APM provides some checklists which can be used to
review the overall performance of the client.
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Identify Firm’s Overall Goal
After our audit team got engaged in Commercial building audit project, we have
collected some basic information of the shops inside in the SAPA
ASSOCIATES. We went through what their basic business are, to understand
their operations, considered their internal control structure and also
identified their expectations.
49
Assess General risks of clients
Risks Area
• CASH
Risks
• Cash transactions may not be recorded accurately.
• Cash may not exist
• Review confirmation replies
• Test accounts where there is no confirmation
50
ACCOUNT RECEIVABLE
Risks
INVENTORY
Risks
Steps
51
ACCOUNTS PAYABLE
Risks
• The accounts payable listing may not be accurate
52
CHAPTER 5:
SUMMARY OF FINDING
53
SUMMARY
In four weeks of internship I was assigned at the audit learner, from the firm
SAPA ASSOCIATES Chartered Accountants for the audit of: SAPA
ASSOCIATES to complete my internship program as an audit staff. During
my internship program most importantly I realized how to work under the
pressure of responsibilities maintaining chain of commands and working in a team.
CA SATENDRA sir, taught me to work with rules and regulations, where I
have gained the understanding on how to reach a mutual understanding between
different people while working together. This practical orientation is necessary
for the development and preparation of a person before entering into the
corporate world. The things that I have learned at SAPA ASSOCIATES
Chartered Accountants are:
• Meaning of responsibility
• Responsibility to the profession
• Necessity of commitment
• Auditing and Reporting responsibilities
• Working with ethics
• Working Independently
• Client dealings
• Working with Generally accepted auditing standards
• Punctuality and regularity is very important
• Ability to interact with different sorts of people
54
Nature of the Job
First few days I do not have to do anything except observing them and I was asked
to learn by communicating and staying with them. At the first week my primary
work was to learn how to operate an ms-excel customize software which is
used for maintaining company account. Then, I practically involved in work
with the auditor’s team. I was mainly handling cheque register book where I
kept record of each cheque received from client. In addition I had to make a
notification report every day according to the cheques drawing date. It is worth
to mention that, I had great opportunity to be a part of audit of the company
at the end of the year. As a result, I had to extend my internship period. At that
time my responsibility was to find out the total account receivable of the year
2011 and 2012 with detail break up.
55
Specific Responsibilities of the Job
Critical Observation
57
CONCLUSION
Audit Procedure describes the step by step instructions of a financial statement
audit. This procedure is sufficient for SAPA ASSOCIATES. If all these steps
are followed properly, it is possible to ensure a proper conduct of financial
statement audit. But as I stated above, in some cases the auditors of SAPA
ASSOCIATES violates some audit standards and not carry out their audit
tasks properly. As a result, the quality of audit work cannot be ensured all the
time. But if all these problems can be removed, SAPAASSOCIATES will be
able to maintain its present status and improve its position to the client. So all
the partners and the articled students of SAPA ASSOCIATES must be
conscious about this matter.
The Program has enhanced the knowledge and skills as well as improved the
professional ability to work in a multicultural environment. Working in
SAPA Associates (Chartered Accountants) as an intern was not only an
honor and privilege but a lifelong experience that will forever shape the
professional life. This was a great experience.
58
The Executive Director has inspired intern to serve rather than expect to be
served by Sub-ordinates. I am very appreciative of this opportunity and
forever grateful to SAPA Associates (Chartered Accountants) for giving the
opportunity to not work as an intern but also enabled the intern to enhance
the abilities, to take the responsibility and accomplish it.
This Internship has boost the confidence to work with responsibility and
accomplish every assignment efficiently.
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RECOMMENDATION
The Audit Checklist should be used, and each box marked in the negative
should result in an audit recommendation. Audit each account separately.
Check off items in red ink as they are reviewed. Do not correct errors. Ask
the responsible financial officer to correct errors. After errors have been
corrected, and the auditor is satisfied that the financial accounts are correct,
the auditor needs to denote the ending date of the audit. If a manual ledger
and check register exists, draw a double line across the ledger and
checkbook register where the audit concludes and sign and date using red
ink, “Audited by (name) on (date).” If a computerized accounting program is
used, attach a copy of the cash account and the last page of the check
register to the audit report filed with the secretary minutes, sign and date
using red ink, “Audited by (name) on (date).”
The auditor ensures that the association’s financial transactions have been
accurately recorded
Include bank name, bank address, type of account and the account
number on each report.
Start audit with records posted after the last audit. Verify the amount
shown on the first bank statement (adjusted for outstanding checks
and deposits per the prior audit) corresponds to the starting balance
recorded in the checkbook register, ledger, and treasurer report, and
the ending balance of the last audit.
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Confirm bank statement was reviewed by another non-check signer if
the auditor had not been assigned that task.
Verify there have been no ATM transactions.
Make sure every check issued for the audit period is substantiated
with an authorization for payment, the reason and budget line item for
the disbursement, appropriate payee and a receipt or bill. Each
authorization should be signed by the president and the secretary. If
the check has cleared the bank verify that there are two signatures and
that both were from authorized check signers. Verify
authorization/ratification in the minutes. Note: Checks issued for pass-
through funds do not require pre-authorization but should be ratified.
Check that all bank charges and interest earned are recorded in the
checkbook register, ledger and treasurer reports..
Trace each deposit slip to bank statement and checkbook entries.
Verify deposits are properly supported and that a Cash Verification
Form (Forms, Chapter 9) or equivalent was used for each deposit.
Verify that at least one of the signers of the form was an officer or
committee chairman. Ensure money was deposited promptly.
Ensure collection process is in place for returned checks that includes
reimbursement of applicable bank charges. A returned check is treated
as reverse income and reimbursed bank charges are treated as reverse
expenses. Verify returned checks have been properly reported.
Verify deposits and checks have been properly recorded in the
treasurer’s reports.
Verify the deposits and checks have been properly posted to the
ledger and check register. Note: Request computer reports that show
all the various accounts affected by the transaction.
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Verify that all income and expenditures are allocated into budgeted
categories.
Make certain that council, district, State and National PTA portions of
the membership dues have been kept separate from other receipts.
Make certain that the number of memberships agrees with
membership chairman’s report, and verify that membership monies
collected correspond to membership monies forwarded.
Ensure payment for insurance premiums.
Make certain the money collected for a specific purpose (special
projects, Founders Day, scholarship funds, council dues, etc.) has
been so disbursed.
Check event reports to verify receipts and expenditures have been
properly reflected in the financial records.
If an advance has been given, verify that receipts and/reimbursements
have been received and properly recorded. If money was returned,
verify it has been redeposited into the PTA account.
Compare figures on monthly treasurer and financial reports against
ledger for accuracy.
Ensure proper tax returns have been filed.
Verify that the PTA-required Workers’ Compensation Annual Payroll
Report form has been filed through PTA channels.
Verify that all required state and federal report forms have been filed
if PTA hires employee(s) or independent contractor(s).
62
SAPA Associates have a very few employee at account management
department whereas the work pressure is high. So the firm could increase
their workforce and share the work together. Secondly, to increase the rate
of work efficiency they need faster computer with user friendly operating
system. There is customized accounting software in the firm which is not
beneficial. The company should update or add more features in that software
and appoint a professional operator so that it might save time, money, labor
and execute an impact for the long run.
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SOME OTHER WORK
1. MS-excel
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Overview of TDS
Tax deducted at source (TDS) is a tax that is deducted from income that a
company in India pays to a recipient or supplier if the income amount
exceeds a specific statutory limit in a financial year.
• Salary.
• Insurance commission.
• Rent.
65
suppliers include contractors, providers of professional services, employees,
and real estate landlords. Companies submit a TDS certificate to each
supplier on a monthly or yearly basis. The certificate includes the payments,
as well as information about the company and supplier. Companies must
also submit an annual return to the government for each recipient or supplier
for the financial year
TDS must also be deducted from payments issued to third parties by both
corporate and non-corporate entities. The entity must deposit the amount
owed for withholding at any of the designated branches of banks that are
authorized to collect taxes on behalf of the government of India. The entity
must also submit the TDS returns, which contain details about the payments
and the challan for the tax deposited to the Income Tax Department
(ITD).For electronic TDS, companies must generate the Form
26Q for each financial quarter. This is a statutory requirenment for the ITD.
66
APPENDICES
References
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INTRODUCTION OF AUDITING-
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