audit check list format

8/11/2019 Audit Check List Format

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AUDIT CHECKLIST

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BASIC AUDIT PROGRAMME

Clients Name :

Accounting Year:

This programme is a specimen programme In the course o! au"it the programme #ill ha$eto %e "ra#n up consi"ering the si&e an" nature o! %usiness o! each client an" %ase" on#ea'ness o! internal control

Chec'e"%(

Timeta'en

)chec'ing

E*tent o! Testchec' eg +,onthl( - .trl( -Hal! Yrl( - e$er(/0th$oucher

/ 1pening 2alance tracing

3 Cash %oo' $ouching4 2an' %oo' $ouching

5 Sales register - Sales 6ournal$ouching

7 8urchase register - purchase6ournal $ouching

9 Cre"it note an" De%it noteregister $ouching

An( other special registers%ase" on the nature o! %usiness an" practices

!ollo#e" %( the compan( ;ournal $ouching

< Salar( an" =ages

> Stoc' ?ecor"s - Le$els -8h(sical @eri!ication

/0 Chec'ing !or outstan"inge*penses an" prepai"e*penses

// @eri!ication o! i*e" Assets an"chec'ing o! Depreciationstatements

/3 8ro$ision !or Ta*ation -compare#ith complete" assessmentor"er-s

/4 @aluation o! in$entories +Shortages2asis

Chec'e" Time ) E*tent o! Test



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%( ta'en chec'ing chec' eg +,onthl( - .trl( -Hal! Yrl( - e$er(/0th$oucher

/5 Chec'ing o! notes an"Buanti!ication

/7 ,inutes 2oo's o!:a 2oar" ,eetings% eneral ,eetingsc Committee ,eetings i! an(

/9 Statutor( ?egistersCompliance as per Anne*ure IIIo! Chapter 7

/ Inspection o! !iles relate" to la#suits legal matters ta*ation

e*cise octroi !rau"s etc/< Loans uarantees

/> Transaction #ith relate" parties

Chec'e" %( ?e$ie#e" %(



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CHAPTER IV Checklist for Audit Staff

CLIENT: FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF

8erio" En": FFFFF-FFFFFFFFFFFFF-300F

8articulars Y-N-NA ?emar's

/ Oe!i!" Bala!ce

// Ha$e (ou chec'e" opening %alances o!:

aG general le"ger

%G "e%tors le"ger

cG cre"itors le"ger

"G cash %alance an" %an' %alances

eG other Su%si"iar( le"gers

3 Vouchi!"

3/ @ouching inclu"es the !ollo#ing:

aG receipts an" pa(ments o! Cash %oo'an" 2an' %oo' inclu"ing 8ett( Cash2oo'

%G sales

cG purchases

"G cre"it notes

eG "e%it notes

!G register o! postage

gG register o! hun"i paperhG an( other %oo' - register o! prime

entries salar( an" #ages registerspecial register li'e trip registertic'et %oo'ing register 6o% register%ase" on the nature o! %usiness

34 Ha$e (ou chec'e" correctness o!

aG account hea" - account co"e

%G "ate

cG amount

"G name o! part(

eG Buantities an" rates #hereapplica%le

35 Are the $ouchers properl( authori&e"an" supporte" %( necessar( e*ternale$i"ence an" - or internal"ocumentation

37 Does the transaction relate to theaccounting (ear un"er au"it



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39 Ha$e (ou chec'e" totals-su%totals

3 Ha$e (ou ma"e list o! items remaininguntic'e" a!ter (our $ouching iscomplete

#$ Cash % Ba!k Book & Receits '

Pa()e!ts4/ Ha$e (ou chec'e" #hether cash

collecte" is %an'e" at reasona%leinter$als

43 Ha$e (ou chec'e" %alances at the en"o! "i!!erent "a(s i! cash %oo' is monthl(%alance" an" ensure" that cash %oo'"oes not ha$e an( negati$e %alance

44 aG Is there an( inci"ent o! hea$( cash%alance su%stantial cash#ith"ra#als + chec' reasons thereo!

%G @eri!( #ith the rough - cashier cash%oo'

45 Ha$e (ou trace" trans!ers !rom pett(cash %oo' to cash %oo' an" $ice $ersa

47 Ha$e (ou chec'e" 6ournal entries !ortracing summaries #here$er reBuire"

49 Ha$e (ou chec'e" %an' reconciliationstatement + out"ate" cheBues to %ere$erse"

4 Ha$e (ou chec'e" reconciliation entries

#ith clearance in ne*t months %an'statement

4< Ha$e (ou liste" entries #hich areappearing in %an' statement %ut notappearing in %an' %oo'

4> Ha$e (ou chec'e" cre"it - "e%it !or %an' interest

4/0 Ha$e (ou chec'e" contra entries !orcash #ith"ra#als an" "eposits an"ensure" that the( appear on same "ate

*$ Sales Re"ister

5/ Ha$e (ou chec'e" Buantities as per"eli$er( challans #ith in$oices

53 Ha$e (ou chec'e" entries in stoc'recor"s

54 Ha$e (ou chec'e" rates #ith price listan" ascertaine" reasons !or $ariations

55 Ha$e (ou ma"e a list o! untic'e" items

57 Ha$e (ou tallie" sales ta* returns



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59 Ha$e (ou reconcile" sales ta*collections #ith pa(ments an" trans!ero! the %alance to appropriate accounts

+$ Purchase Re"ister

7/ Ha$e (ou chec'e" "eli$er( challans

Buantit( #ith in$oices73 Ha$e (ou chec'e" rates #here$er

or"ers ha$e %een issue" @eri!(.ualit( Control appro$al memo

74 aG Ha$e (ou chec'e" Buantit( intostoc' recor"s

%G Ha$e (ou ma"e a list o! purchasein$oices !or #hich there are nocorrespon"ing entries in stoc'recor"s

cG All stoc's are recor"e" as either

purchases or !rom opening stoc'goo"s return ha$e %een a"6uste"

75 Ha$e (ou $eri!ie" that purchases arecorrectl( classi!ie" as per theaccounting co"e

77 Ha$e (ou ensure" that all goo"srecei$e" notes are correlate" #ithpurchase in$oices

,$ -our!al Vouchi!"

9/ Ha$e (ou chec'e" #h( "e%it %alancesha$e %een #ritten o!! or cre"it %alance

#ritten %ac'93 Ha$e (ou chec'e" account hea" on

6ournal $ouchers

94 Are there an( entries relating to earlieror su%seBuent perio"

95 Ha$e (ou ma"e a list o! untic'e" items

97 Are all 6ournal $ouchers $eri!ie" #ithnecessar( e$i"ence - e*planation -#or'ings

99 Are all $ouchers $eri!ie" authori&e".$ Salar( a!d /a"es

/ Ha$e (ou chec'e" salar( summaries inthe cash %oo' - %an' %oo' - 6ournal

3 Ha$e (ou chec'e" atten"ance #ith timecar"s or muster registers

4 Ha$e (ou chec'e" "eletions -increments #ith personnel !ilesappro$als - agreements



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5 aG Ha$e (ou chec'e" statutor("e"uctions !or: 8ro$i"ent un"

ESIC

Income Ta*

8ro!essional Ta* A"$ances

An( other items

5 %G Ha$e (ou correlate" entries !or pa(ments o! a%o$e "e"uctions

7 Ha$e (ou chec'e" o$ertime pa(ments#ith necessar( register an" compan(srules

9 Ha$e (ou chec'e" pa(ments o! salar(an" #ages #ith registers

Ha$e (ou chec'e" calculations o!

%onus #ith re!erence to pro$isions o!8a(ment o! 2onus Act - Agreement

< Ha$e (ou chec'e" incenti$e pa(ment#ith its %asis Ad hocincenti$es to %eliste"

> Ha$e (ou chec'e" #or'ing o! pa(mentsto contractors - casual #or'ers Ha$estatutor( "e"uctions %een ma"ethere!rom

0$ Stock Records


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4 Ha$e (ou $eri!ie" the trans!er entries!rom C=I8 to proper asset hea" on itscompletion - installation

26$ Posti!" 7i! case )a!ual accou!ti!"8

/0// Ha$e (ou chec'e" postings !rom cash%oo' %an' %oo' sales registerpurchase register "e%it note - cre"it

note register 6ournal an" all otherprincipal %oo's

/0/3 Ha$e (ou chec'e" summari&e" postingo! sales - purchase register an" "e%itnote - cre"it note register - pett( cash%oo' - e*penses register

/0/4 Ha$e (ou liste" out untic'e" items



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Chec'e" %(: ?e$ie#e" %(:



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CHAPTER V Checklist forRe9ie: of 3i!a!cial State)e!t

Re)arks;%


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%G Issue in authori&e" capital ?scG pu%lic issue ?s

// Ha$e (ou chec'e" appropriate returns to ?egistrar o!Companies an" ac'no#le"gements !or al changes inauthori&e" an" pai" up capital

/3 In case o! shares issue" to Nonresi"ents ha$e (ouensure" that ?2I !ormalities ha$e %een complie" #ith

/4 =hat are the total calls unpai"

Has the amount %een classi!ie" as un"er:aG 2( Directors%G 2( others

/5 Ha$e (ou chec'e" the terms o! options i! an(

/7 =hether an( shares #ere !or!eite" !or nonpa(ment o!"ue calls

aG I! (es then ha$e (ou $eri!ie" the accounting

entries !or the same%G Ha$e (ou chec'e" the 2oar" resolution

authori&ing the samecG In case o! reissue o! !or!eite" shares ha$e (ou

chec'e" the 2oar" resolution

Disclosure u!der Schedule VI

SHARE CAPITA=

/ Authori&e" share capital sho#n

3 Issue" share capital sho#n

4 Su%scri%e" share capital sho#n #ith the amount calle"upon each shares

5 Calle" up an" pai"up share capital sho#n

7 8articulars o! an( option on unissue" share capitalspeci!ie"

9 @arious classes o! share capital sho#n

Classes o! pre!erence shares sho#n


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issue"

/0 Calls unpai" sho#n as:iG %( "irectorsiiG %( others

// Amount originall( pai"up on !or!eite" shares sho#n

an( capital pro!it on reissue %eing trans!erre" to Capital?eser$e

/3 I! the compan( is a su%si"iar( num%er o! shares hel" %(the hol"ing compan( an" the ultimate hol"ing compan(an" its su%si"iaries must %e separatel( state" together#ith its hol"ing

JThe au"itor is not reBuire" to certi!( the correctness o!such sharehol"ings certi!ie" %( the managementG

Chec'e" %(: ?e$ie#e" %(:

1$ RESERVES A7 an"Companies JDeclaration o! Di$i"en" out o! ?eser$esG?ules />7 as per pro$isions o! 307AJ4G #here$erapplica%le

7 Is there a reser$e #hich is represente" %( earmar'e"



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in$estments =hether such a reser$e has %een sho#nas a Mun"


RESERVES A


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#$ SECURED =OA4 ha$e %een

complie" #ithin case o! o%taining resolution at theeneral ,eeting i$e "etails:

Limit ?sDate

4 =hether a list o! Term Loans instalments "ue #ithin /3months %een ta'en on !ile

5 =hether ?egistration o! charges %een "one inaccor"ance #ith section /49 - /54

7 =hether terms o! re"emption o! "e%enture ha$e %eenspeci!ie"

9 =hether proportionate amount !or "e%enturere"emption !un" has %een appropriate" J?e!er CL2gui"eline "t /5//>


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5 =here the compan(s "e%entures are hel" %( anominee or a trustee !or the compan( the nominalamount o! the "e%entures an" he amount at #hich the(are state" in the %oo's o! the compan( has %een state"

7 Loans an" a"$ances !rom %an's are sho#n separatel(

9 Loans an" a"$ances !rom su%si"iaries are sho#nseparatel(

1ther loans an" a"$ances are sho#n separatel(


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hG Ha$e "eposits !rom emplo(ees %een treate" as "epositun"er section 7 Ha$e consi"ere" the applica%ilit( ! section 3J33GJeG o!

the IT Act to an( o! the loans ta'en


U


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8aperO

aG The amount outstan"ing at the 2alance Sheet "ateshoul" %e "isclose"

%G The ma*imum amount raise" at an( time "uring the(ear shoul" also %e "isclose"

Chec'e" %(: ?e$ie#e" %(:

+$ CURRE


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their "ues "ates namel(:aG Unpai" "i$i"en"%G Unpai" application mone( recei$e" %( the compan( !or

allotment o! securities an" "ue !or re!un"cG Unpai" mature" "eposits

"G Unpai" mature" "e%entureseG Interest accrue" on a%o$e


CURRE


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Chec'e" %(: ?e$ie#e" %(:

,$ TA>ATIO3

5 Ha$e (ou re$ie#e" cases #here reco$eries are not inaccor"ance #ith terms o! repa(ment

7 =here loans ha$e %een a"$ance" to companiesJinclu"ing su%si"iariesG #hich sho# a negati$e net #orthin $ie# o! huge losses e*amine #hether an( pro$ision -"isclosure has to %e ma"e

9 Loans to emplo(ees e*clu"es

aG A"$ance against e*penses + pro$i"e" e*pense accountis regularl( su%mitte"

%G A"$ance against !ollo#ing months salar( + pro$i"e itsa"6uste"

Ha$e (ou ta'en on recor" "etails o! intercorporate"eposits


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cG !or supplies

// Ha$e (ou o%taine" !rom the management reasons !ornon a"6ustment o! a"$ance !or more than reasona%letime

/3 Are there an( a"$ances reco$era%le !rom Directorsetc

Ha$e (ou ensure" its "isclosure in accounts

Disclosure as er Schedule VI

=OA


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9 The pro$ision !or "ou%t!ul a"$ances shoul" not e*cee"the amount o! a"$ances state" to %e consi"ere""ou%t!ul or %a" an" i! it "oes it shoul" %e sho#n un"er?eser$es an" Surplus

Chec'e" %(: ?e$ie#e" %(:

21$ CASH A


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> Ha$e (ou ensure" that losses i! an( "ue to e*change$ariation ha$e %een accounte" !or in case o! oreigncurrenc( accounts

/0 Ascertain that the items in %an' reconciliation at the(ear en" pertain to cheBues "eposite" or issue" %e!orethe (ear en"

// =hether cheBues on han" are inclu"e" in cash onhan"

/3 =hether more cheBues ha$e %een "eposite"imme"iatel( a!ter (ear en"

Disclosure as er Schedule VI

CASH A


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"G The nature o! the interest o! an( "irector or his relati$ein each o! the %an's other than sche"ule" ones has%een sho#n

4 All unutili&e" monies out o! the issue Jo! share capitalan" "e%enturesG must %e separatel( "isclose"in"icating the !orm in #hich the( ha$e %een in$este"

Chec'e" %(: ?e$ie#e" %(:

2#$ MISCE==APE


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/ The !ollo#ing ha$e %een sho#n:

aG 8reliminar( e*penses

%G E*penses inclu"ing commission or %ro'erage onun"er#riting or su%scription o! shares or "e%entures

cG Discount allo#e" on the issue o! shares o! "e%entures

"G Interest pai" out o! capital "uring construction together#ith the rate o! interest

eG De$elopment e*pen"iture not a"6uste"

!G 1ther items Jspeci!(ing natureG

Chec'e" %(: ?e$ie#e" %(:

2*$ PRO3IT A


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Ha$e (ou $eri!ie" that E*cise "ut( an" Sales ta* ha$e%een sho#n as a "e"uction !rom ross Turno$er#here$er the Turno$er inclu"es E*cise - Sales ta*

/0 Ha$e (ou seen that goo"s sent on consignment an"internal "ispatches to %ranches "epots or agencies arenot inclu"e" in sale

// Ha$e (ou ensure" that the $alue o! the Turno$er

e*clu"e" ancillar( an" e*tra charges li'e pac'ing!reight commission etc

/3 Ha$e (ou ensure" that "iscounts gi$en !or promptpa(ment an" re%ates o! a special rather than a generalnature are accounte" !or separatel(

/4 Ha$e (ou ensure" that tra"e "iscounts an" or"inar(re%ates are a"6uste" against the $alue o! the turno$er

B$ PURCHASES

/5 Ha$e (ou satis!ie" (oursel! that all materials inclu"e" instoc' %een recor"e" as purchase

/7 Ha$e goo"s returne" %een a"6uste" an" e*clu"e" !romstoc'

/9 Ha$e all claims !or "e!ecti$e materials %een a"6uste"

DEPRECIATIO< % AMORTIATIO #ith rele$ant"etails o! the calculation o! the commission pa(a%le %(#a( o! percentage o! such pro!its to the "irectors The8ro!it Loss Account itsel! ma( contain suchin!ormation

39 8a(ments to au"itors ha$e %een sho#n:

aG As au"itor !or:

iG ees an"

iiG E*penses reim%urse"

%G As a"$isor in:

iG Ta*ation matters

iiG Compan( La# maters

iiiG ,anagement ser$ices

cG In an( other mannerIn the 8ro!it an" Loss Account o! %( #a( o! a note

Chec'e" %(: ?e$ie#e" %(:

2+$ 3I


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aG oing Concern Jcontinuit( o! %usiness o! the compan( insuccee"ing (earsG

%G Accrual Jincome e*penses accruing "uring the (earun"er re$ie#G

cG Consistenc( Jsame %asis o! accounting to %e !ollo#e"consistentl(G

"G 8ru"ence J!uture losses to %e ascertaine" an" accounte"!or #hereas !uture gains to %e "e!erre"G %een a"here" to

4 I! not please gi$e particulars o! "epartures there!rom

5 Compliance #ith ,an"ator( Accounting Stan"ar"s an"Assurance Stan"ar"s:

Ha$e (ou !ille" up the Control Sheet !or the AccountingStan"ar"s an" place" on !ile

7 =hether all the reBuirements o! the a%o$e stan"ar" ha$e%een a"here" to %( the compan( I! no "ra!t report hasto %e suita%l( Buali!ie"

9 Ha$e other chec'lists on Statutor( ?egisters CompaniesAct Compliance chec'lists are complete"

Ha$e all the "ocuments as per the "ocumentationchec'list %een place" on the #or'ing papers !ile

Ha$e the Institutes Statements an" ui"ance notes asapplica%le %een consi"ere" an" !ull( complie" #ith

/0 Ha$e (ou peruse" an" note" important points arising !romreports o%taine" %( the compan( internall( an" e*ternalagencies such internal au"itors concurrent au"its etc

// Has the partner criticall( e*amine" ratios as per thechec'list

Chec'e" %(: ?e$ie#e" %(:



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2,$


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/ All important %asic ra# materials are sho#n separatel(

3 ,aterials "o not inclu"e items li'e stores an" !uel #hichonl( assist the manu!acturing process

4 8urchase" interme"iates an" components are classi!ie"as ra# materials an" onl( those items #hich account !orat least /0) o! the $alue o! ra# materials consume" aresho#n separatel( in Buantit( an" $alue

5 The !igures !or ra# materials consume" relate to actualconsumption rather than the "eri$e" consumption an(normal shortage or loss ma( %e inclu"e" in the !igure o!consumption

7 Internal trans!ers !rom one "epartment to another are

"isregar"e" in "etermining consumption !igures

C$ Value of i)orts of ra: )aterials co)o!e!ts a!d sare arts a!dcaital "oods o! CI3 ?asis ha9e ?ee! sho:! ?( :a( of !ote i!resect of

/ aG ?a# materials

%G Components or spare parts

cG Capital goo"s

3 The total $alue o! imports o! components an" spare partsma( %e "isclose" in the aggregate

4 The "isclosure in respect o! imports is ma"e on amercantile or accrual %asis There!ore items li'e goo"s intransit are inclu"e"

5 The $alue o! imports is "isclose" irrespecti$e o! #hetheror not such imports ha$e resulte" in an e*pen"iture in!oreign currenc(

7 The $alue o! imports is calculate" on a CI %asis

9 The "isclosure is ma"e in In"ian currenc(



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Disclosure is #ith regar" to the $alue o! imports %( theCompan( ie "irect imports


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5 Disclosure is ma"e on accrual %asis other#ise %asis to%e state"

7 Disclosure is limite" onl( to those cases #here thecompan( itsel! incurs a e*pen"iture in !oreign currenc(The "isclosure is to %e ma"e o! the amounts actuall(incurre" in !oreign currenc( #hich is remitte" outsi"eIn"ia JTDS un"er IT Act to %e e*clu"e"G

Disclosure of 3orei"! E5cha!"e Ear!i!"s

/ E*port o! goo"s calculate" on 12 %asis

3 ?o(alt( 'no# ho# pro!essional an" consultation !ees

4 Interest an" "i$i"en"

5 1ther income Jin"icating natureG

9ii$ =ice!sed caacit( i!stalled caacit( a!d actual roductio!

/ The !ollo#ing ha$e %een sho#n %( #a( o! notes:

aG the license" capacit( on the last "ate o! the (earJi! applica%leG

%G the installe" capacit( on the last "ate o! the (ear

cG actual pro"uction o! !inishe" pro"ucts meant !orsale

3 A reconciliation %et#een the Buantit( pro"uce" an"Buantit( sol" is prepare" as it might re$eal "i!!erences orerrors

4 =here installe" capacit( relates to a particular pro"uctmi*

aG the entire range o! $ariation ma( %e sho#n or



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%G it ma( %e "esignate" in respect o! the particularpro"uct mi* alrea"( in operation "uring theaccounting (ear or

cG the installe" capacit( ma( %e in"icate" in neutralterms

eg machine hours a$aila%le

OTHER ITEMS 3OR


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ensure" that these ha$e %een "ul( consi"ere" !or thecurrent (ears account

7 1%tain a list o! contingent lia%ilities !rom the compan( an"correlate it #ith:

aG ,inutes o! the 2oar" or committee o! Directors

%G Compan(s sale - purchase contracts !or liBui"ate""amages - penalties - #arranties

cG Incometa* sales ta* an" e*cise recor"s

"G Con!irmations !rom clients solicitors as to pen"ing suits!or claims against the compan( an" reconcile the same#ith sche"ule o! !ees pai" to solicitors - counsels

eG Certi!icate !rom clients %an'ers !or contingent lia%ilitiesJeg %ills "iscounte" letters o! cre"it guarantees etcG

!G La%our union agreements #hether these ha$e e*pire"an" #hether union ha$e "eman"e" a re$ision ora""itional remuneration or %onus

gG =hether there is in$estment sche"ule !or outstan"ingcalls on in$estments

hG 8ro"uct #arranties guarantees an" statutor( o%ligations

iG uarantees gi$en o! o%ligations o! su%si"iar( or relate"companies

6G Commitments !or capital e*pen"iture

'G Disputes #ith ta* or other go$ernment authorities

lG 1%ligations un"er leases

mG ,atters un"er ar%itration

nG 8en"ing la%our "eman"s

oG 8enalties un"er contracts

pG 2ills "iscounte" %ut not mature"

BG or#ar" contracts !or purchase an" sale o! goo"s an"



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!ore*

9 Ha$e Contingent Lia%ilities %een measure" an" "isclose"as per AS 3> Jre!er para 39 47 5


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Date: Date:



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A


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;IE=D RATIOS

30 Di$i"en" Yiel" Q 1r"inar( Di$i"en"s to

,ar'et @alue o! 1r"inar( shares

3/ Earnings Yiel" Q JNet 8ro!it + 8re! Di$i"en"G

To ,ar'et @alue o! 1r"inar( shares

PRO3ITABI=IT; RATIOS

33 82IT to Capital Emplo(e"

34 82T to Net #orth

35 Net 8ro!it to Net #orth

37 8ro!it to i*e" Assets

TUR


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A In$estments o! compan( to %e hel" in its o#nname

7


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shares

> 8o#er to issue shares at a "iscount

>A Issue o! S#eat EBuit( Shares

4 8a(ment o! "i$i"en" in proportion to amountpai"up

>5 8o#er o! limite" compan( to alter its sharecapital

>5A Share capital to stan" increase" #here an or"eris ma"e un"er section ?estrictions on commencement o! %usiness

/97 Statutor( meeting an" statutor( report o! compan(

/99 Annual general meeting

/ 1r"inar( an" special resolutions



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/>0 ?esolutions reBuiring special notice

/>3 ?egistration o! certain resolutions an"agreements

/>3A 8assing o! resolutions %( postal %allots

/>4 ,inutes o! procee"ings o! general meetings an"o! 2oar" an" other meetings

/>A Compan( not to emplo( certain "i!!erentcategories o! managerial personnel at the sametime

/>< 1$erall ma*imum managerial remuneration an"managerial remuneration in case o! a%sence or

ina"eBuac( o! pro!its

/>> Calculation o! commission etc in certain cases

300 8rohi%ition o! ta*!ree pa(ments

305 ?estriction on appointment o! !irm or %o"(corporate to o!!ice or place o! pro!it un"er acompan(

307 Di$i"en" to %e pai" onl( out o! pro!its

307A Unpai" "i$i"en" to %e trans!erre" to special"i$i"en" account

3072 8a(ment o! unpai" or unclaime" "i$i"en"

30 8enalt( !or !ailure to "istri%ute "i$i"en"s #ithinthirt( "a(s

30< 8o#er o! compan( to pa( interest out o! capitalin certain cases

30> 2oo's o! account to %e 'ept %( compan(

3/0 Annual accounts an" %alance sheet

3// orm an" contents o! %alance sheet an" pro!itan" loss account

3/3 2alance sheet o! hol"ing compan( to inclu"e



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certain particulars as to its su%si"iaries

3/4 inancial (ear o! hol"ing compan( an"su%si"iar(

3/7 Authentication o! %alance sheet an" pro!it an"loss account

3/9 8ro!it an" loss account to %e anne*e" an"au"itors report to %e attache" to %alance sheet

3/ 2oar"s report

330 Three copies o! %alance sheet etc to %e !ile"#ith the registrar

333 Construction o! re!erences to "ocumentsanne*e" to accounts

335337339

Appointment remo$al Buali!ications an""isBuali!ications o! au"itors

335A Au"itor not to %e appointe" e*cept #ithappro$al o! the compan( %( special resolution incertain cases

33 8o#ers an" "uties o! au"itors

33< Au"it o! accounts o! %ranch o!!ice o! compan(

33> Signature o! au"it report etc

344A 8o#er o! Central o$ernment to "irect specialau"it in certain cases

3442 Au"it o! cost accounts in certain cases

373 ,inimum num%er o! "irectors

37> Increase in num%er o! "irectors to reBuireo$ernment sanction

390 A""itional "irectors

39

Appointment reappointment o! managing or#holetime "irector



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35 DisBuali!ications o! "irector

3/3>33>4

2oar"s po#ers an" restrictions thereon

3>3A Au"it committee

3>4A3>42

Limitations on political contri%utions an" to theNational De!ence un" etc

3>5 Appointment o! sole selling agents to reBuireappro$al o! compan( in general meeting

3>5A 8rohi%ition o! pa(ment o! compensation to soleselling agents !or loss o! o!!ice in certain cases

3>5AA 8o#er o! Central o$ernment to prohi%it theappro$al o! sole selling agents in certain cases

3>7 Loans to "irectors etc

3>9 Application o! section 3>7 to %oo' "e%ts incertain cases

3> 2oar"s sanction to %e reBuire" !or certaincontracts in #hich particular "irectors areintereste"

3>> Disclosure o! interests %( "irector

40/ ?egister o! contracts companies an" !irms in#hich "irectors are intereste"

40> to4//

?emuneration o! "irectors

4/5 Director etc not to hol" o!!ice or place o! pro!it

4/9 Num%er o! companies o! #hich one person ma(%e appointe" managing "irector

4/ ,anaging "irector not to %e appointe" !or morethan !i$e (ears at a time



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4/< to43/

Compensation to "irectors !or loss o! o!!ice

45>470

Computation o! pro!its !or the purposes o!"etermining the remuneration o! managerialpersonnel

43 8urchase %( compan( o! shares etc o! othercompanies

43A Intercorporate loans an" in$estments

4


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Chec'e" %(: ?e$ie#e" %(:



65/91

A /90 #ith copies o! "ocuments reBuire" to%e anne*e" thereto

/>4J/G ,inute %oo's o! %oar" o! "irectors an"committees o! the %oar"



66/91

/>4J/G ,inute %oo's o! procee"ings o! generalmeetings

30>J/G 2oo's o! account an" other cost recor"s

30>J3G 8roper %oo's o! account relating to transactionse!!ecte" at %ranch o!!ice

40/J/G40/J7G

?egister o! contracts #ith "irectors companiesan" !irms in #hich "irectors are intereste"

403J9G All contracts entere" into %( the compan( !orthe appointment o! a managing "irector

404J/G405J/G

?egister o! "irectors ,g "irectors an"secretar(

40J/G ?egister o! intercorporate loans an"in$estments

Chec'e" %(: ?e$ie#e" %(:



67/91

A Stoc'intransit

30 Contingent lia%ilit(

3/ A!!irmation regar"ing realisa%ilit( o! currentassetsloans a"$ances an" a"eBuac( o!pro$ision !or lia%ilities an" noncharging o!personal e*pen"iture



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N1TES:

/. ertificates should specify nature of security which should !e compared with the 0egister ofharges and 1ortgages.

2. n case certificates specifying nature of security is not availa!le consider placing aclarificatory note on accounts that the nature of security is as per the register maintained !y

the company

II$ COPIES O3 RESO=UTIO


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to ta'e It is suggeste" that irrespecti$e o! the nee" !or representations on speci!ic mattersthe au"itor shoul" consi"er o%taining a general representation !rom the management

A specimen is gi$en here #hich ma( a"apte" to speci!ic au"it

Jon client letterhea"G

Date FF FFF FFFFF

,N18 CoChartere" Accountants,um%ai 50000/

This representation letter is pro$i"e" in connection #ith (our au"it o! the !inancialstatements o! A2C Lt" !or the (ear en"e" 4/4300FF !or the purpose o! e*pressing anopinion as to #hether the !inancial statements gi$e a true an" !air $ie# o! the !inancialposition o! A2C Lt" as o! 4/4300FF an" the results o! the operations !or the (ear then

en"e" in accor"ance #ith the reBuirements o! the Companies Act />79 an" recogni&e"accounting practices inclu"ing the Accounting Stan"ar"s issue" %( the Institute o! Chartere"

Accountants o! In"ia

=e ac'no#le"ge our responsi%ilit( !or the !air representation o! the !inancialstatements in accor"ance #ith the reBuirements o! the Companies Act />79 an" recogni&e"accounting practices inclu"ing the Accounting Stan"ar"s issue" %( the Institute o! Chartere"

Accountants o! In"ia

=e con!irm to the %est o! our 'no#le"ge an" %elie! an" ha$ing ma"e appropriateenBuiries o! other o!!icials o! the compan( the !ollo#ing representations

There ha$e %een no irregularities in$ol$ing management or emplo(ees #ho ha$e asigni!icant role in the accounting an" internal control s(stems or that coul" ha$e a materiale!!ect on the !inancial statements

=e ha$e ma"e a$aila%le to (ou all %oo's o! account an" supporting "ocumentationsan" all minutes o! meetings o! sharehol"ers an" the %oar" o! "irectors

All 'no#n actual or possi%le noncompliance #ith la#s an" regulations together #iththe actual or contingent conseBuences #hich ma( arise there!rom the e!!ects o! #hichshoul" %e consi"ere" #hen preparing !inancial statements ha$e %een "isclose" to (ou

The !inancial statements are !ree o! material misstatements inclu"ing omissions

The compan( has complie" #ith all aspects o! contractual agreements that coul" ha$ea material e!!ect on the !inancial statements in the e$ent o! noncompliance There has %eenno noncompliance #ith reBuirements o! regulator( authorities that coul" ha$e a materiale!!ect on the !inancial statements in the e$ent o! noncompliance



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The accounting policies #hich are material or critical in "etermining the results o!operations !or the (ear or !inancial position are set out in the !inancial statements an" areconsistent #ith those a"opte" in the !inancial statements !or the pre$ious (ear The !inancialstatements are prepare" on accrual %asis

E*cept as "isclose" in the !inancial statements the results !or the (ear #ere notmateriall( a!!ecte" %( e*cept as "isclose" in the accounts:

aG transactions o! a nature not usuall( un"erta'en %( the compan(%G circumstances o! an" e*ceptional nature or nonrecurring naturecG charges or cre"its relating to prior (ears"G changes in accounting policies

=e con!irm the completeness o! the in!ormation pro$i"e" regar"ing the i"enti!ication o!relate" parties

The i"entit( o! an" %alances an" transactions #ith relate" parties ha$e %een properl(recor"e" an" #hen appropriate a"eBuatel( "isclose" in the !inancial statements

=e ha$e no plans or intentions that ma( materiall( alter the carr(ing $alue or classi!icationo! assets an" lia%ilities re!lecte" in the !inancial statements

The compan( has satis!actor( title to all assets an" there are no liens or encum%ranceson the compan(s assets e*cept charges create" in !a$our o! %an's - !inancial institutionsThe compan( carries out $eri!ication o! assets in a phase" manner o$er a perio" o! FFF(ears No material "iscrepancies #ere notice" "uring the $eri!ication

The ne*t %oo' $alues at #hich !i*e" assets are state" in the %alance sheet are arri$e" at:

aG a!ter ta'ing into account all capital e*pen"iture on a""itions thereto %ut noe*pen"iture properl( chargea%le to re$enue

%G a!ter eliminating the cost an" accumulate" "epreciation relating to items sol""iscar"e" "emolishe" or "estro(e"

cG a!ter pro$i"ing a"eBuate "epreciation on !i*e" assets "uring the perio"

At the %alance sheet "ate there #ere no outstan"ing commitments !or capital e*pen"ituree*cepting those "isclose" in the Notes to the !inancial statements

=e ha$e no plans to a%an"on lines o! pro"uct or other pans or intentions that #ill result inan( e*cess or o%solete in$entor( an" no in$entor( is state" atan amount in e*cess o! its netreali&a%le $alue

=e ha$e recor"e" or "isclose" as appropriate all lia%ilities %oth actual an" contingentan" ha$e "isclose" in the !inancial statements all guarantees that #e ha$e gi$en to thir"parties



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There ha$e %een no e$ents su%seBuent to (ear en" #hich reBuire a"6ustment o! or"isclosure in the !inancial statements or Notes thereto e*cepting those "isclose" in the Notesto the !inancial statements

No amounts are pa(a%le to small sale in"ustrial un"erta'ings e*cept those state" in the

Notes to accounts

=e a""itionall( con!irm that:

No loans ha$e %een grante" to parties reBuire" to %e liste" in the register u-s 40/ o! theCompanies Act an" - or to companies un"er the same management e*cept as enclose"

=ith respect to (our ?eport un"er the Companies JAu"itors ?eportG 1r"er 3004 #econ!irm to the %est o! our 'no#le"ge an" ha$ing ma"e appropriate enBuiries o! other o!!icialso! the compan( the !ollo#ing representations

The entries reBuire" to %e ma"e in the ?egister un"er section 40/ o! the Companies Act

/>79 is complete in all respects

There are no un"ispute" amounts remaining unpai" !or o$er 9 months in case o! an(statutor( "ues e*cept as enclose"

No shortterm %orro#ings #ere use" !or longterm in$estments an" $ice $ersa

No !rau"s committe" on the compan( ha$e come to our notice "uring the (ear nor has thecompan( committe" an( !rau" on others

Yours !aith!ull(

E*ecuti$e Director



72/91

CHAPTER VI Checklist for

Audit Reort u!der CARO

CLIENT: FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF

8erio" en"e" FFFF-FFFFF-300FFF

Re)arks

;%


73/91

iG turno$er o! less than ?s7 croresiiG pai"up capital an" reser$es not R

?s 70 la'hsiiiG loan outstan"ing less than ?s /0

la'hs !rom %an's an" Ii$G not accepte" pu%lic "eposits

JIn other #or"s CA?1 applica%le #henANY o! the a%o$e con"ition is not !ul!ille"G I!CA?1 is not applica%le to the compan(state the !act in the main report

2$ 3i5ed Assets

/// Does the compan( maintain !i*e" asset

?egister - Car"s//3 Do these gi$e the !ollo#ing particulars

iG Description o! the asset

iiG Accounts classi!ication

iiiG Location

i$G I"enti!ication No

$G .uantit(

$iG 1riginal cost

$iiG Depreciation rate amount

$iiiG Details regar"ing "isposal

i*G Year o! purchase

*G A"6ustment !or re$aluation Jinclu"ing AS //e!!ect

//4 Does the compan( maintain proper recor"ssho#ing !ull particulars inclu"ing Buantitati$e"etails an" situation o! !i*e" assets

/3/ Has ph(sical $eri!ication o! the assets %eencon"uce" %ase" on #ritten instructions %( themanagement at reasona%le inter$als I! (es:

iG =hat the !reBuenc( thereo!

iiG =hat is the percentage in $alue thereo!

iiiG Is there su!!icient e$i"ence thereo!



74/91

/33 Ha$e the results o! the $eri!ication %eenreconcile" #ith the !i*e" asset recor" an" i! so:

iG Has a list o! "iscrepancies %een prepare"

an" pace" on au"it !ile

i$G Are these "iscrepancies signi!icant

$G Ho# ha$e the "iscrepancies %een"ealt #ith the accounts

/34 Di" the au"itors o%ser$e all or an( part o! the$eri!ication

/35 Has the asset register %een reconcile" #ith the!inancial recor"s

/4JaG =hether there ha$e %een sale - "isposal o!

!i*e" assets o! the compan(

J%G =hat is percentage o! !i*e" assets sol" -"ispose" o!

JcG =hat is the Buantum o! re"uction inpro"uction capacit( %( such sale

J"G =hether the concept o! Mgoing concernhas %een a!!ecte" %( such re"uction in

pro"uction capacit(

(e) I! not gi$e reasons Also refer to checkliston AAS /.

1$ I!9e!tories

3// List out the inter$als at #hich ph(sical$eri!ication is con"uce" !oriG ?a# an" pac'ing materials

iiG inishe" goo"s

iiiG Stores an" spare parts

i$G Consuma%les an" others

3/3 Has the in$entor( at (ear en" %een ph(sicall($eri!ie" %( the management



75/91

3/4 Are comprehensi$e #ritten stoc' ta'inginstructions issue" + Statement on au"itingpractices Appen"i* A 1%tain a cop( thereo! i!not o%tain a note on proce"ures o! $eri!ication

3/5 =hether au"itors #ere present !or ph(sical

$eri!ication3/7 Has "ue cogni&ance %een ta'en o! cut o!!

proce"ures in ph(sical $eri!ication an" $aluationo! in$entories

33/ Are the proce"ures o! ph(sical $eri!ication!ollo#e" %( the management reasona%le an"a"eBuate

333 =hat is the percentage in $alue co$ere" in thecourse o! $eri!ication

34/ =hether proper stoc' recor"s are maintaine"

343 =hether the( are properl( maintaine" in

a"eBuate "etails344 @eri!( the report o! $ariations %et#een %oo'

recor" an" ph(sical stoc' Are the"iscrepancies material

#$ =oa!s "i9e! ?( the Co)a!(

4// Has the compan( grante" an( loans secure" orunsecure" to companies !irm or other partiesliste" in the register maintaine" u-s 40/

4/3 Has a list o! all loans grante" %( the compan(%een scrutini&e" an" a list o! loans to partiesmentione" in the a!oresai" registers separatel(o%taine" The list should contain the following:

iG Name o! the part(

iiG ?elationship #ith the compan(

iiiG Amount

i$G Year en" %alance

Cross chec' the list o! such loans o%taine" inJ%G a%o$e #ith the register maintaine" %( thecompan( un"er section 40/ o! the Companies

Act />79

4/4 Has a list o! such loans gi$ing "etails o! termsan" con"itions %een place" on !ile 4ive 5o. of



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parties and amounts of transactions. (1aximum!alance outstanding at any time during the yearfor each party should !e considered)

43/ 1%tain in #riting !rom the management theire*planations as to #h( the terms o%taine" arenot pre6u"icial to the interests o! the compan( inthose instances #here %etter terms coul" ha$e%een o%taine"

434 Chec' that loans an" a"$ances ma"e on the%asis o! securit( ha$e %een properl( secure"

435 I! the terms o! the loan gi$en are prima !aciepre6u"icial has #ritten e*planation %eeno%taine" !rom the compan( as to #h( it shoul"

not %e so consi"ere"

44/ =hether the principal an" - or interest are %eingregularl( pai" I"enti!( %( scrutin( o! thesche"ules o! sun"r( "e%tors an" loans an"a"$ances !orming part o! %alance sheet an" thele"ger %alances #hether an( a"$ances ha$e%een gi$en !or a !igure #hich is !ar in e*cess o!the $alue o! the or"ers or !or a perio" #hich is!ar in e*cess o! the normal tra"e practice or an(other "e%it %alances #hich coul" tantamount to

loans or a"$ances in the nature o! loans

443 Test chec' the repa(ments o! the principalamounts #ith the stipulation to ensure that thepart( is repa(ing the principal amounts asstipulate" 6xtent of check7

444 Test chec' the receipt o! interest #ith thestipulation so as to ensure that such interestpa(ments are regular 6xtent of check7

445 I"enti!( the loans an" a"$ances in the nature o!loans #here no stipulation has %een ma"e !orrepa(ments o! the principal amount or !orpa(ment o! interest

447 Ensure that #here no repa(ments o! theprincipal amounts or pa(ments o! interest ha$e%een stipulate" the au"itor has in"icate" in the



77/91

report that he has not ma"e an( speci!iccomments %ecause the terms o! repa(ment an"- or interest ha$e not %ee stipulate"

449 1%tain an" report in!ormation as %elo# !or loansgi$en

aG Name o! the part(

%G ?elationship #ith the compan(

cG 1$er"ue principal

"G 1$er"ue interest

eG Year en" %alance

45/ 1%tain a list o! o$er"ue amount o! more than?s / la'h per part( + o%tain the note regar"ingsteps %eing ta'en !or reco$er( o! the amountsan" #hether the( are a"eBuate an" reasona%leI! not o%tain e*planation !rom management

453 @eri!( the steps ta'en %( the compan( as liste"a%o$e an" ma'e (our comments #here thesteps ta'en "o not loo' reasona%le an" as' !orcompan(s response thereto 0easona!lesteps for 0ecovery include7 Amounts involved,issue reminder$s, sending legal notice. 8actsand circumstances of each case should !econsidered and in a!sence of legal stepsauditor must satisfy himself that reasona!lesteps have !een taken.

454 Can (ou conclu"e a!ter consi"ering the a%o$ean" ta'ing appropriate e$i"ence on recor"s thatreasona%le steps ha$e %een ta'en %( thecompan(

#$+ =oa!s take! ?( the Co)a!(

47/ Has the compan( ta'en an( loans secure" orunsecure" !rom companies !irms or otherparties liste" in the register maintaine" u-s 40/o! the Companies Act i$e No o! parties an"amount in$ol$e" in transactions (1aximum!alance outstanding at any time during the year



78/91

for each party should !e considered)

473 1%tain a list o! such loans containing "etails o!terms an" con"itions !or our recor"s 1%tain alist o!: / Name o! the 8art( 3 ?elationship #iththe compan( 4 Amounts 5 Year en" %alance

49/ Are the rate o! interest an" other terms on#hich these loans ha$e %een ta'en prima !aciepre6u"icial to the interest o! the compan( #ithregar" to comparati$e terms !or:

aG securit( o!!ere"

%G rate o! interest

cG terms o! repa(ment

"G loan gi$en %( the compan(

eG other con"itions attache"

1%tain in #riting !rom the management theire*planations as to #h( the terms o%taine" arenot pre6u"icial to the interests o! the compan( inthose instances #here %etter terms coul" ha$e%een o%taine"

4/ 1%tain a list in "etail o! categor( #ise o! loansan" a"$ances in the nature o! loans #hich ha$e%een ta'en

43 Scrutinise the sche"ule o! loans an" a"$ances!orming part o! the %alance sheet in or"er toensure the completeness o! the list o! loans an"a"$ances in the nature o! loans gi$en

44 I"enti!( %( scrutin( o! the sche"ules o! sun"r("e%tors an" loans an" a"$ances !orming part o!

%alance sheet an" the le"ger %alances #hetheran( a"$ances ha$e %een gi$en !or a !igure#hich is !ar in e*cess o! the normal tra"epractice or an( other "e%it %alances #hich coul"tantamount to loans or a"$ances in the natureo! loans

45 Test chec' the repa(ments o! the principal



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amounts #ith the stipulation to ensure that thepart( is repa(ing the principal amounts asstipulate" E*tent o! chec':

47 Testchec' the receipt o! interest #ith thestipulation so as to ensure that such interestpa(ments are regular E*tent o! chec'

49 I"enti!( the loans an" a"$ances in the nature o!loans #here no stipulation has %een ma"e !orrepa(ments o! the principal amount or !orpa(ment o! interest

4 Ensure that #here no repa(ments o! theprincipal amounts or pa(ments o! interest ha$e%een stipulate" the au"itor has in"icate" in the

report that he ha" not ma"e an( speci!iccomments %ecause the terms o! repa(mentan"-or interest ha$e not %een stipulate"

4< 1%tain an" report in!ormation as %elo# !or loansgi$en

!G Name o! the part(

gG ?elationship #ith the compan(

hG 1$er"ue principal

iG 1$er"ue interest

6G Year en" %alance

*$ I!ter!al Co!trol S(ste)s

5/ 1%tain a note on the interest s(stem relating topurchase o! !i*e" assets an" in$entories an" !orthe sale o! goo"s an" ser$ices Also re!erchec'list on AAS 9

53 Has the s(stem as e*plaine" %een !ollo#e""uring the (ear

54 1%tain the internal au"it reports o! the currentan" pre$ious (ears an" list out the ma6or#ea'ness o! continuing nature that has not%een recti!ie" i! an( Here the #ea'ness 'no#n



80/91

to the management continues to persist in spiteo! steps ta'en %( the management =heremanagement has not ta'en an( steps the reportshoul" state the same

55 As per au"itors e$aluation o! the s(steme*isting "uring the (ear is the internal au"itcontrol o$er the purchase o! these assets an"sale o! goo"s a"eBuate in relation to the si&e o!the compan( an" nature o! its %usiness =herean( #ea'ness that is capa%le o! resulting in%reach o! internal controls is consi"ere" to %e ama6or #ea'ness an" there!ore come #ith theam%it o! reporting

=hether an( ma6or #ea'ness in Internal Control

reporte" in earlier (ear I! (es #hether those#ea'nesses recti!ie" or are still continuing +1%tain a note !rom the management =hethera""itional area o! ma6or #ea'ness notice""uring the (ear an" reporte" to themanagement

+$ Tra!sactio!s :ith related arties as er Re"ister of Co!tract u%s #62

7// Has a list o! all parties entere" in the register

un"er section 40/ %een o%taine"

7/3 =hether transactions that nee" to %e entere"into a register in pursuance o! section 40/ o! the

Act ha$e %een so entere" 1%tain a #rittenrepresentation !rom management concerningthe completion o! the entries in the register u-s40/

7/4 E*amine proce"ure !ollo#e" !or i"enti!(ing theparties an" the transactions

7/5 1%tain a l ist o! !irms or companies or otherparties #here "irectors are intereste"

7/7 1%tain a part(#ise statement sho#ing the!ollo#ing "etails o! all transactions #ith thearties i"enti!ie" in step a%o$e



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a 8urchase - sale contracts re!erence "atean" $alue

% 8urchase - selling rates

c @alue o! purchase - sales ma"e in the(ear un"er the contract

Trace transactions in the %oo's o! account

7/9 Cross chec' the list o%taine" in step J"G a%o$e#ith the "isclosure un"er section 3>> J4G an"the register maintaine" %( the compan( un"ersection 40/J/G o! the Companies Act /79 !or!irms or companies or other parties in #hich"irectors are intereste" ?e$ie# orm 35AA to

ensure compliance #ith sections 3> an" 3>>

7/ ?e$ie# last (ears #or'ing papers to con!irm#hether "ata gi$en in step 7/3 is correct

7/< EnBuire as to the a!!iliation o! "irectors an" 'e(management personal an" o!!icers #ith otherentities

7/> 1%tain list o! principal sharehol"ers !rom theshare register

7//0 ?e$ie# the entit(s income ta* returns an" otherin!ormation supplie" to regulator( agenciessuch as "etails sho#n in 4CD in respect o!pa(ments to speci!ie" person

7/// Cross chec' all these in!ormation #ith"isclosures ma"e on relate" part( transactionsin the notes on accounts

7//3 ?e$ie# the 6oint $enture an" other rele$antagreements entere" into %( the entit(

7//4 =hether contracts an" arrangements re!erre"to in section 40/ ha$e %een entere" in theregister

73/ E*amine the statement o%taine" in step 7/5a%o$e %( re!erence to the register o! contractsmaintaine" un"er section 40/J/G o! the



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Companies Act />79 Consi"er !or e*aminationthe transactions o! all such concerns e*cee"ingan aggregate $alue o! ?s 700000 each

1%tain list o! all purchases o! an( goo"s ormaterials aggregating "uring the (ear to ?s700000 or more in respect o! each part(

Ensure" that the prices pai"-recei$e" in a%o$et#o lists are reasona%le as compare" to theprices o! similar items supplie" %(-to otherparties %(:

Comparing the rates at #hich purchase-salesha$e %een !rom-to other parties

Comparing the other terms o! purchases-salessuch as terms o! cre"it "eli$er( perio" Bualit(o! the pro"uct relia%ilit( o! the source o! suppl(etc

.uotation anal(sis reasons !or not t'ing thelo#est-highest prices

I"enti!( the contracts or arrangements #herethe suppl( is !rom onl( one source or !rom morethan one source an" the prices pai" !or such

transactions are reasona%le s compare" toother prices o! similar items Buote" %( otherparties Also i"enti!( the cases #here the suppl(is !rom onl( one source or more than onesource #ithout an( price comparisons #ithalternati$e parties J1%tain Buotation-price list i!possi%le as au"it e$i"enceG

In the light o! a%o$e can #e sa( that the pricespai"-recei$e" !or each transaction in respect o!each part( in a !inancial (ear aggregating to ?s

700000 or more are reasona%le In case o!sole suppliers reasona%leness can %eascertaine" #ith re!erence to list prices o! thesupplier other tra"e terms etc

9 Deposits !rom the pu%lic

9/ Has the compan( accepte" "eposits inclu"ing



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loans !rom the pu%lic #ithin the meaning o! thepro$isions o! section 7


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5 Is the co$erage o! internal au"it a"eBuate

7 Are the person carr(ing out the internal au"ita"eBuatel( Buali!ie" !or the 6o%

9 To #hom "o the internal au"it report

Ha$e the internal au"it reports %een peruse"an" management replies gi$en on points o!"e!aults an" #hether the( ha$e %een "ul( acte"upon

< In $ie# o! #hat is state" a%o$e is the internalau"it s(stem o! the compan( commensurate#ith its si&e an" the nature o! its %usiness

0$ Cost Records


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"G Date o! "e"uction

eG Due "ate

!G Date o! "eposit

gG Amount o! "eposit

hG ,onth #ise "e"uctions an" contri%utionsto 8ro$i"ent un" an" ESIC

>/3 @eri!( the "etails o%taine" in step JaG a%o$e #iththe rele$ant recor"s E*tent o! Chec'

>/4 In case o! "ela(s are the( signi!icant Ensure#here the compan( has not %een regular in

"epositing the "ues that the e*tent o! thearrears o! such "ues I! an( ha$e %eenin"icate" in the report %( the au"itor urtherensure that the perio" to #hich the arrearsrelate an" #here$er possi%le the !act o!su%seBuent clearance or other#ise ha$e %eenin"icate" in the report %( the au"itor

>/5 Ha$e the arrears %een cleare" I! not ha$e theamounts o! arrears %een "isclose" in thereport

>/7 Has the compan( %een regular in "e"uction an"- or "eposit o! statutor( "ues in all casesEnsure that management representation iso%taine" speci!(ing amounts that areconsi"ere" "ispute" containing a list o! casesan" the amounts in respect o! statutor( "ues#hich are un"ispute" an" outstan"ing !or R9months !rom the "ate the( %ecome pa(a%le

4$1 U!disuted statutor( dues

>3/ 1%tain list o! ta*es - "uties outstan"ing as at(ear en" in respect o!:

aG Income Ta*

%G =ealth Ta*

cG Sales Ta*



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"G Customs Dut(

eG E*cise Dut(

!G Ser$ice Ta*

gG Interest Ta*

hG @AT

iG 1thers Jspeci!(G

>33 In respect o! un"ispute" amounts i"enti!( thoseoutstan"ing !or o$er si* months as at (ear en"

>34 Ensure proper "isclosure o! these items

>35 =here lia%ilit( is "ispute" o%tain a !ile note"etailing the status

4$# Disuted Statutor( dues

>4/ 1%tain list o! all "ispute" statutor( "ues #hetherpro$i"e" or not in !ollo#ing !ormat

Name o! statute

Nature o! "ues

YearJsG to #hich it pertains

Amount J?sG

orum #here "ispute is pen"ing

26$ Sick I!dustr(

/0/ aG Has the Compan( %een registere" !or aperio" !or a perio" o! se$en or more (ears

%G Are the accumulate" losses o! the compan(at the (ear en" eBual to or more than 70) o!its net #orth an"

cG Has the compan( su!!ere" cash losses in theconcerne" !inancial (ear an" in the



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imme"iatel( prece"ing !inancial (ear

/03 =here the compan( is a sic' in"ustrialcompan( is a "etaile" note 6usti!(ing thepreparation o! Accounting on a going concern%asis place" on !ile

22$ Dues to fi!a!cial i!stitutio!s

/// 1%tain a list o! "ues pa(a%le "uring the (ear to

JaG inancial Institutions

J%G 2an'

JcG De%enture hol"ers

//3 =hether these "ues ha$e %een pai" in timeList all "e!aults in an( pa(ments sho#ing theperio" o! "e!ault an" amounts

21$ Secured loa!s a!d ad9a!ces "ra!ted

/3/ =hether the compan( has grante" an( loans ora"$ances on the %asis o! securit( %( #a( o!ple"ge o! share an" securities

/33 =hether a"eBuate "ocuments an" recor"s aremaintaine" !or each such loan

/34 =hether the shares an" securities hel" inCompan(s name or are in possession o!compan( o%tain con!irmation letters !rom theparties #ho ha$e ple"ge" the securit(

/35 I! proper "ocuments or recor"s are not a$aila%leo%tain e*planation !rom the compan( List o! the"e!iciencies

2#$ Chit 3u!d


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/43 =hether the compan( has complie" #ith thepru"ential norms on income recognition an"pro$isioning against su%stan"ar" - "e!ault -loss assets

/44 =hether the compan( has a"eBuateproce"ures !or appraisal o! cre"it proposals -reBuests assignment o! cre"it nee"s an"repa(ment capacit( o! the %orro#ers

/45 =hether the repa(ment sche"ule o! $ariousloans grante" %( the ni"hi is %ase" on therepa(ment capacit( o! the %orro#er an" #oul"%e con"uci$e to reco$er( o! the loan amount

2*$ I!9est)e!t Co)a!(

/5/ Is the compan( "ealing or tra"ing in sharessecurities "e%entures an" other in$estments

/53 Ha$e proper recor"s %een maintaine" o! transactions an" contracts dentify therecords maintained !y the company forrecording the dealings $ trading, transactions inshares, securities, de!entures and otherinvestments such as contracts etc, and ensureits ade*uacy9

/54 Ha$e timel( entries %een ma"e in suchrecor"s

/55 Ha$e shares securities "e%entures an" otherin$estments %een hel" in the name o! thecompan(

/57 I! not has compan( %een e*empte" u-s 5> o!the Companies Act

/59 Also re!er to the ?2I "irections as Au"itors?eport on N2Cs issue" on 3n";anuar(/>>

audit check list format

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