Auditing - Examples of Audit Program

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.