Вы находитесь на странице: 1из 14

INTERNAL AUDIT PROGRAMME

Name & Address of Client


Regitration No.:
Name of Person in Charge of Accounts PAN
Contact Details TAN
Email ID GST
CA In Charge of Audit RAZIQ AHMED FCA ESI
Name of Audit Assistants PF
Period of Audit

PART A - GENERAL
Working paper
Particulars Audit Comments Auditee Reply
Reference
1. (a) Obtain Opening Trial Balance to confirm
correct carry forward of previous years’ closing
balances

(b) Scrutinize the ledger/accounts to find out


any abnormal account/transaction not falling in
the regular course of the business of the entity

PART B - SPECIFIC
I. SALES
(i) Check availability of following documents :
a. Sales policy, Discount policy, Credit policy if No Discounts are normally allowed MD didn't permit the salesmen to allow
any to customer , the maximum discount discount . Sales to staff is discounted Good control is existing in
rate allowed by system is 7% which cannot be exceed 7% (which is sales , continue the
fixed by the system) same .

b. Pro-forma invoice, Purchase Order of


Customer, Sales Order Not followed
c. Copy of Sales Invoice Proper Sales invoice

(ii) Ensure documentary proof for compliance


of following :
a. Payment of GST
b. Timely filing of GST returns

(iii) Check Whether


a. there are any instances of advance invoicing/
late invoicing as compared to dispatch

b. pre-shipment inspection has been carried and


material has been dispatched as per invoice and
contract
c. there is appropriate authorization for free
samples
d. Approval for taking sale return, receipt and
inspection of returned goods and issue of credit
note, etc. Sales return reason, analysis and
comment on sales return material lying in stock
and the gain/ loss on resale of returned material

e. There is sequential control over all Invoices,


Credit Notes, Delivery Orders and Goods
Returned Note.
f.   There should be segregation of duties
between Sales; Dispatch; Invoicing and
Collection of payment.
i. There are Invoices issued but not recorded

II. PURCHASE & PROCUREMENT


(i) Check availability of following documents :
a. Purchase Order
b. Goods received Note
c. Original Invoice
d. Lorry documents for freight payment and for
TDS, if applicable
(ii) Ensure documentary proof for compliance
of following :
a.   Deduction and payment of TDS on freight on
purchases and services
b.   Payment of GST on the goods purchased
from unregistered dealer.
c.   The procurement price is reasonable
according to Section 40 A(2) of Income Tax Act,
1961, if purchase is made from sister concern

(iii) Check Whether


a. Material is supplied as per purchase order
and material receipt note (MRN) is prepared
after quantity and quality checks and
authorization
b. Bill is passed by accounts department for the
quantity as accepted by stores after making
deduction for any quality discrepancy

c. The value of purchase is recorded net of GST


ITC, if claimed
d. All the related expenditure, such as freight,
etc., are recorded as part of purchase

e. There is any long outstanding advance made


to suppliers
f. there is any material purchase without
Purchase Order and/ or emergency purchases
(Local purchase)

III. INVENTORY & STORES MANAGEMENT

(i) Check availability of following documents :

a. Location wise inventory records


b. List of ABC & FSN category items
c. Standard for minimum, maximum, reorder
level of store stock.
(ii) Ensure that the following documents are
authorized properly
a. All material receipt notes (MRNs) and
rejection/ return of material
b. Addition/ deletion of any item as store stock
c. Write-off/ discarding of an item due to
difference in physical verification, technology up
gradation, expiry due to life cycle or for any
other reason
(iii) Check Whether
a. Material requisition is properly vetted/
validated and authorized. And it should clearly
mentions the specification and quantity of
material to be procured
b. All materials received in stores are kept
separately till the inspection
c. All rejected materials are kept separately from
accepted stock
d. Material is stored only after updating the
stock records
e. Compliance with laws and completeness of
statutory records
f. Issues have been updated accurately in the
stock register
g. Non–moving stock and damaged stock is kept
separately and is reported to management from
time to time.
h. Stock taking and supervision of the material
received should be done on periodic basis

i. There is proper control over scrap/ wastage/


damages/defectives.
j. Proper entry has been recorded in the books
for receipt & issue of matieral, rejection of
goods, material written off.
IV. HUMAN RESOURCE & PAYROLL
PROCESSING
(i) Check availability of following documents :

a. Employee attendance register


b. Employee time register
c. Employee Master Data
d. Form 12B
(ii) Ensure documentary proof for compliance
of following :
a. all documents for compliance with Income-tax
like, house rent receipts, medical bills, proof of
Chapter VIA deductions, like, LIC, NSC, PPF, tax
saver FDs, etc., proof of medical reimbursement,
etc. and other documents/ declarations have NA
been submitted by employees

NA NA
b. payment of salary for more than a specified
amount has been made only through account
payee cheques/ drafts and other banking
channels including direct transfer to the
account of the payee
YES
c. computation of income tax liability of each
employee done correctly and deduction of tax
has been made accordingly NA

NA NA
d. filing of PF and ESIC returns is within
stipulated time and data in returns is accurate
as per books of accounts and provisions of
relevant Act, and correct information in relation
to employees is reported to authorities as and ESI PF WORKINGS AND CHALLANS
when required. ARE NOT MAINTAINED HERE. AHDN
HENCE WE COULDN’T VERIFY THE
SAME
e. TDS computation of the employee is being
done and TDS has been deposited and NA
accounted for. NA NA
(iii) Ensure that the following documents are
authorized properly

We strongly recommed
The administrator is calculating salary punching system for
just relying on the attendance regsiter determining the
a. verification and authorization of salary and kept at each shops.( Which is sent attendance and timing of
proper review of payment is there. through whatsapp). There are cases staffs. So the manual
where the employees dispute regarding errors in calculation and
their salary due to manual error as the under/over payments
attendance register may not be clear and may be avoided
No correctly followed
b. advance payments to employees are properly
authorized
c. loan to employees and deductions are as per
approval.

d. imprest/ advance payments to employees are


made by the authorized persons and adjusted
within reasonable time

e. re-imbursement to employees for the there is proepr internal


expenses paid by them are authorized by the control over
relevant authority with the supporting PROPER BILLS AND VOUCHERS ARE reimbursement of
documents. YES MAINTAINED HERE expenses to employees
(iv) Check whether :
a. the process of conversion of time data into
payroll data has been scrutinized to find any salary of all the employees
discrepancies. comes under pf
applicability but pf is
calculated and paid only
for 9 employees. The
same should be
payroll calculation is done only for 9 implemente to all
Yes employees.
b. payroll data has been modified after
processing but before sending to Head Office
No
c. increments have been updated and paid on
time Yes
d. all the deductions have been made from the ESI AND PF ARE DEDUCTED ONLY FOR
salary before the payment No SOME EMPLOYEES
e. cheque has been taken by the correct person
in case of payment of salary by cheque
Yes
f. proper register has been maintained and
signed by the employees after receiving their
cheque or cash
g. advances and loans have been properly
authorized while Whether advances and loans
have been properly authorized while
h. unauthorized leaves have been marked as
absent
i. Bonus has been accurately calculated,
reported and paid. NA NA
j. payment of salary, incentives, bonus and all
other payments processed have been recorded in
the books of accounts
k. proper recording of in-time and out-time
punching in machine software or in case of
manual recording, register is maintained
no
l. controls to protect unauthorized changes in
the in-time and out-time of the employees have
been maintained
m. check for guest employees and deputed
employees has been maintained. Whether
movement of temporary employees from one
department to another has been recorded.

V. OPERATIONAL & ADMINISTRATIVE


EXPENSES
(i) Check availability of following documents :

a. Original invoice of expense (based on


materiality)
They keep original invoices of Manager verifies the expense incured There is good internal
expenses (where available) correctly with the supportings and give control over payment of
in chronological order suggestions and approve expenses. expenses
Afterwords the cashier give the payment
and record it in cash book
b. Payment vouchers
They keep the payment vouchers The vouchers are also signed by the Satisfactory
along wiith the bills/invoices person preparing it and the person
attached to it. receiving the amount
(ii) Ensure documentary proof for compliance
of following :
a. Payment of GST/PF/ESI/TDS
(iii) Check whether
a. TDS is properly deducted and paid on
expenses It is noted that tds
deducted on freight on
amount inclusive if GST
During the time of receipt of invoices, rather than the actual
tds is deducted and payment done net of expense excluding GST
YES tds
b. The service charges/ expenses is reasonable
according to Section 40A(2) of Income Tax Act,
1961
c. The payment in cash is more than 10,000
according to Section 40A(3) of Income Tax Act,
Most of the administrative expenses
1961
expenses are made through bank. Only
No petty expenses are made out of cash
d. Specified expenses u/s 43B is paid
accordingly
e. expenses are authorized properly yes
f. Imprest account of employees is settled on
time
g. Expenses has been booked properly
mentioning the nature of expense either Accounting must be done
operational or administrative on a daily and systematic
basis.The accountant
must fully concentrate
only on accounting part
so that he can account all
the transactions on a
Accounting part of majority of expenses timely manner
No are yet to be done.
h. Procurement for service for capital
expenditure has not been booked as revenue We have given inputs to
expenditure, such as, repair and maintenance, the accountant regarding
technical inspection, erection, commissioning correcting the accounting
and installation and so on of capital expenditure
Some capital additions are booked as
Yes revenue nature
i. Value of service has been recorded net of GST
input credit, if claimed
j. TDS, if applicable, should not be charged to
expenses and shall be booked as liability For the part of expenses accounted, tds
Yes is currently booked as liability
k. Imprest given to employee shall not be booked
as salary. There shall be a pre-drafted format for
filing of details of expenses incurred out of
Imprest and it shall be booked as expenses in
proper head

there is no system of budget preparation


l. there is expense budget and its comparison of expenses. Manager verifies the
with the actual and authorization of variations, No expenses and give suggestions
if
m.anyLong outstanding advance to vendors/
employees

VI. OWNER'S CAPITAL


a. any loan amount is wrongly debited/ credited
in Capital Account
b. drawings carefully, usually they are made for
various personal/ household expenses and
sometimes also for investments in LIC, NSC,
PPF, etc.
c. all the transactions in the capital have been
recorded at correct value.

VII. FIXED ASSETS, DEPRECIATION &


AMORTISATION
(i) Check availability of following documents :

a.   Fixed Assets Register


b.   Original Invoice
c.  Capitalization Work sheet having full details

(ii) Check whether :


a.     Deduction and payment of TDS for
installation, fabrications and commissioning of
plant and machinery, if applicable

b. Depreciation is claimed on the amount equal


to ITC if claimed against purchase of any
machinery
c. The reported fixed assets balance agrees with
the related account records in the general ledger

d. Depreciation is provided, based on block of


assets. Check whether depreciation is provided
on the percentage on the written down value
(W.D.V.) as prescribed in the Rule 5(1) read with
table of depreciation prescribed in Income Tax
Rules, 1962.

e. Depreciation for a period of less than 180


days is restricted to 50% of the amount
calculated as above.
f. If any asset is sold discarded, demolished in
the previous year then its written down value at
the beginning of previous year be increased by
actual cost of assets acquired in the same block
during the previous year and be reduced by the
sales consideration with scrap value, if any, and
depreciation be provided on balance of such
block.

g. there is any Long outstanding advance made


to suppliers but fixed assets not supplied with
capital commitments

VIII. ACCOUNTS PAYABLES


(i) Check whether :
a. there are journal entries in the accounts
payable account in general ledger for larger
amounts.
b. external confirmations available for larger
amounts
c. there is long pending outstanding
d subsequent payments are made in the
following quarter
e. credit note/debit note is properly authorised,
whether the circumstances of their issuance
may indicate other problems

f. if there are any unusual trends, comparing a


trend analysis of purchase and accounts
payable, or a comparison of the two over time

IX. ACCOUNTS RECEIVABLES


(i) Check whether :
a. there are journal entries in the accounts
payable account in general ledger for larger
amounts.
b. external confirmations available for larger
amounts
c. there is long pending outstanding
d subsequent payments are made in the
following quarter
e. credit note/debit note is properly authorised,
whether the circumstances of their issuance
may indicate other problems

f. if there are any unusual trends, comparing a


trend analysis of purchase and accounts
payable, or a comparison of the two over time

g. There should be segregation of duties between


functions like, sales, dispatch, credit control,
credit notes, collections and adjustments. In the
absence of segregation of duties, special
attention should be given to any deviation from
the authorization matrix

h. all revenue transactions must be recorded in


books of account and cross reconciled with
goods dispatched/ challan issued with invoices
issued to the customers.

X. CASH & BANK BALANCE


(i) Check availability of following documents :

a. Receipt book and payment vouchers


b. Bank statements/ bank reconciliation
c. Bank balance confirmation certificate
d. Loan sanction letter.
(ii) Legal Compliance
a. Has the unit received/repaid loans/
advances/ deposits in cash of Rs.20,000 and
above in contravention of Section 269SS/269T
of Income Tax Act, 1961?
b. Has the entity made any cash payments
against expenses above Rs.10,000 in
contravention of Section 40A (3) of Income Tax
Act, 1961?
c. Has the entity received an amount of Rs.2
lakh or more in dealings of cash transaction in
aggregate from a person in a day or in respect of
a single transaction or in respect of transactions
relating to one event or occasion, in
contravention of Section 269ST of the Income
Tax Act, 1961

d. Has the unit collected TCS @ 1% on purchase


of goods and services exceeding Rs.2 lakhs?

(iii) Check whether there is :


a. Segregation of duties relating to authorization
of transactions, handling of cash/ issuance of
cheques and writing of books of account, and
rotation of the duties periodically

b. Proper authorization of cash and banking


transactions
c. Daily recording of cash transactions
d. Periodic reconciliation of bank balances
e. Reconciliation of cash-on-hand with book
balance on a daily basis or at other appropriate
intervals, including surprise checks by higher
authorities
f. Safe custody of cash, cheque books, receipt
books, etc.; and security documents

g. Unduly large balance of Cash on hand. Also


check whether Cash on hand is tallying with the
balance as shown in the books

(iv) Verification of Bank Balances


Ensure and confirm that :
a. Whether the entity has issued a letter to all
its bankers to confirm the balances directly to
the auditor of all bank accounts. The request for
confirmation should also cover dormant
accounts as well as accounts closed during the
year

b. See that responsibilities for preparing and


approving bank account
reconciliations has been adequately segregated
from other cash
receipt or disbursement functions

c. Whether the auditor has examined the bank


reconciliation statement
prepared as on the last day of the year. He may
also examine the
reconciliation statements as at other dates
during the year

d. Whether cheques issued by the entity but not


presented for payment,
and cheques deposited for collection by the
entity but not credited in the bank account,
have been duly debited/ credited in the
subsequent
period. (For this purpose, the bank statements
of the relevant period
should be examined)

e. The auditor should pay special attention to


those items in the
reconciliation statements which are outstanding
for an unduly long
period. The auditor should ascertain the reasons
for such outstanding
items from the management. He should also
examine whether any
such items require an adjustment/ write-off
Date of Commencement of Audit ………………………
Date of Completion of Audit ……………………….
Date of Signing of the Audit Report ……………………….
INTERNAL AUDIT PROGRAM
Name & Address of Client
Name of Person in Charge of Accounts
Contact Details
Email ID
CA In Charge of Audit
Name of Audit Assistants

Shop Location:
I. SALES
Sales policy, Discount policy, Credit policy if any
1 Do you sell products on discount ?
2 Is there any threshold limit to allow discount ?
3 How much discount normally aloowed to customer ?
4 How Much discount allowed to staff ?
5 Do you allow any Sales on Credit ?
6.a Do you keep duplicate copies of the sales invoices ?
6.b If Yes ,whether they are serially numbered ?
Whether Daily Sales reports are submitted to the Regional
7 Office on Day to Day basis ?
Whether there is segregation of duties between invoicing and
8 collection of payment ?
Whether Sales collections are Deposited into Bank on Day to
9 Day basis ?
10.a Do you have any cases of Pre-order sales ?
10.b If Yes , how you bill the same ?

II. Petty Cash


1 Petty Expenses are properly Authorized or Not ?
Whether Petty Expenses are recorded on a timely basis ie., at
2 the time of transacation ?
3 Proper Vouchers are available for Petty Expenses ?
Is there any Payments which had incured and the same is not
4 entered in Petty Cash Book ?

III.Sales Return
1 What policy is adopted for Salesreturn ?
2 What are main reasons for Salesreturn ?
3 Whether returned bills are cancelled ?
whether returned goods properly accounted in the system ?
4
5
IV. INVENTORY & STORES MANAGEMENT
Is there any sysytematic approch for ordering the Inventory
1 from warehouse ?
Do you Cross verify the invemtory received with the transfer
2.a note ?
Incase of differences do you communicate properly and revise
2.b the transfer note ?
In case of return Whether the stock is added back to system
3 Properly ?
Whether the system generate any report on Expired Goods ?
4
Whether damaged goods are properly send back to the
Warehouse , and the report for the same is properly
5 generated ?
Is there any inventory management system available store's
6 computer system ?

V. HUMAN RESOURCE
Whether the shop maintain proper Employee attendance
1
register?
2 whether the shop maintain Employee time register?

Whether any advance payments are made to staff from the shop
3
and if yes the same is properly authorised and recorded

4 Whether there is punching system in the shop?


5 whether there is sufficient man power in the shop?
6 Whether there is high turnover rate of employees
Whether the person handling the billing has the sufficient
7
knowledge to handle the same
Whether proper training is given to the employees in handling
8
the system
INTERNAL AUDIT PROGRAMME
MUHAMMED KUTTY Regitration No.:
PAN
TAN
GST
RAZIQ AHMED FCA ESI
PF
Period of Audit
Shop Location:
Staff Reply Additional Comments
Auditor's Comments/Suggestions

1484.04

Вам также может понравиться