8/6/2019 Audit 2003

1/14

VERIFICATION

8/6/2019 Audit 2003

2/14

VALUATION

1.MEANING1.MEANING

* IMPORTANCE* IMPORTANCEa)a) no change in methodno change in methodb)b) method of valuationmethod of valuation

c)c) foreign exchangeforeign exchanged)d) correct computationcorrect computatione) Revaluatione) Revaluation

8/6/2019 Audit 2003

3/14

CASH VERIFICATION

1.PHYSICAL VERIFICATION2.TORN CURRENCY3.LARGE BALANCE

8/6/2019 Audit 2003

4/14

Stock verification*meaning-1.verification-a) Verify existencea) Verify existenceb) Possessionb) Possessionc) Cut off transactionsc) Cut off transactions

d) Subject to charge or liend) Subject to charge or liene) Audit report undere) Audit report undercompanies actcompanies act

f) Duty prescribed by ICAIf) Duty prescribed by ICAI

8/6/2019 Audit 2003

5/14

2.Procedure for stock

taking-

a) Written instructions

b) No stock movementc) Stock sheets

d) Up to date stock books

e) Reconciliationf) Stock of outsiders

8/6/2019 Audit 2003

6/14

*Verification of fixed assets:A) Examination of records

B) repairs.

*Physical verification

A) frequency.B) Method of verification.

C) Reconciliation.

*Valuation and disclosureA) Lumsome price.

B) Joint assets.

8/6/2019 Audit 2003

7/14

Verification of liabilityVerification of liability

1. Introduction1. Introduction

2. Scope2. Scope

3. Importance3. Importance

4. Features4. Features5. Aim5. Aim

8/6/2019 Audit 2003

8/14

Verification of capital

Authorized capital1.Closing balance2.Changes during year

* Minutes* ROC forms

Issued capital1.Minutes2.Offer documents

3.Return with ROC

8/6/2019 Audit 2003

9/14

Issue of shares for cash:While vouching the issue of shares for cash1.Application forms2.Amount received

3.Allotment of shares4.Journal entries

Issue of shares for consideration other than

cash:1.Cases 2.Agreement3.Prospectus 4.Minute book

8/6/2019 Audit 2003

10/14

Issue of share at a premiumssue of share at a premium1.Law1.Law2.Accounting2.Accounting

3.Use of premium3.Use of premium4.Return of allotment4.Return of allotment

Issue of share at a discountIssue of share at a discount1.Provision1.Provision2.Auditors duty2.Auditors duty

8/6/2019 Audit 2003

11/14

Bank verification

Introduction: While verifying bank, theauditor should consider the guidance note on audit ofcash and bank balances issued by the ICAI.

Bank balance may constitute total asset of an entity.

Faces risk of misappropriation and fraud.

BRS help the auditor to verify- recorded bankbalance exists, recorded bank balance belongs to theentity, and there are no unrecorded bank balance.

8/6/2019 Audit 2003

12/14

While verifying bank

yWhile verifying bank-

y *Examine auditor should examine the BRSprepared as on last day of year or on other dates

also.y *Issued examine whether cheque issued but not

presented and cheque deposited but not creditedin the bank statement have been duly done insubsequent period.

y *Delivered if the cheques issued before the yearend have been not presented within a reasonableperiod, they may not have been delivered to theparties and need to be reversed.

8/6/2019 Audit 2003

13/14

Conclusion

yAuditor should confirm that all the asset

of the concern physically exist on thedate of balance sheet.

yTo find out the proper value of asset or

liabilities for recording in the books anddisclosure in final a/cs hence valuationis needed.

8/6/2019 Audit 2003

14/14

Thank you!!!