Audit queries ipcc..
This query is : Resolved
04 May 2012
1.How will you vouch/verify Purchase return ?
- Examine in-depth to eliminate the possibility of fictitious purchse return for covering bogus purchases recorded earlier when such retun outwards are in substantial figure either at he start or at the end of the accounting year.
q. Here i did not understand the whole point.
2.One of the liabilities for a co, is : Receipt of capital subsidy
q. What do we mean by Capital Subsidy ?
3.In the audit of limited company , it is observed that purchases totalling rs.7,45,000 are not supported by vouchers.How will the auditor deal with the above?
ans: Controlled Items: See whether the items purchased are controlled items , which are purchased in open market without the backing of any document..
Pls explain the above statement and what do we mean by backing of any document??
4.In vouching of Postage and courier there is a point that Compare the expenses of the with that of previous year to maintain reasonableness.
My query is that what is the need of such comparision ..I mean transactions in a year can differ from those of previous years and based on those transactions the expenses on postage and courier may also differ.. so why exactly the need for such comparision??
5.In vouching of Travelling expenses see whether permission of RBI is obtained for expenses in foreign currency..
q What is the requirement of permission from RBI ??
6.In vouching of Preliminary Expenses:
Examine resolution of BOD and thhe power in AOA, in case such expenses incurred by the promoters have been reimbursed to them..
i did not understand the above point..
A big thanks in advance :)
- Examine in-depth to eliminate the possibility of fictitious purchse return for covering bogus purchases recorded earlier when such retun outwards are in substantial figure either at he start or at the end of the accounting year.
q. Here i did not understand the whole point.
2.One of the liabilities for a co, is : Receipt of capital subsidy
q. What do we mean by Capital Subsidy ?
3.In the audit of limited company , it is observed that purchases totalling rs.7,45,000 are not supported by vouchers.How will the auditor deal with the above?
ans: Controlled Items: See whether the items purchased are controlled items , which are purchased in open market without the backing of any document..
Pls explain the above statement and what do we mean by backing of any document??
4.In vouching of Postage and courier there is a point that Compare the expenses of the with that of previous year to maintain reasonableness.
My query is that what is the need of such comparision ..I mean transactions in a year can differ from those of previous years and based on those transactions the expenses on postage and courier may also differ.. so why exactly the need for such comparision??
5.In vouching of Travelling expenses see whether permission of RBI is obtained for expenses in foreign currency..
q What is the requirement of permission from RBI ??
6.In vouching of Preliminary Expenses:
Examine resolution of BOD and thhe power in AOA, in case such expenses incurred by the promoters have been reimbursed to them..
i did not understand the above point..
A big thanks in advance :)
08 June 2012
FIRST OF ALL; APPROACH DISPATCH DEPARTMENT WHETHER REALLY SUCH GOODS HAVE BEEN RETURNED.
Other points :
1.
There would be no "PAYMENT" to the creditor if goods are really returned.
.
2.
Check the VAT no. registration and address from the buyer by calling him on telephone (as printed on the bill itself) where the transactions are really pertaining to him.
.
3.
When series of such purchase return transactions are there; then ask purchase manager; why this has happened. Ask him the name of the person of the concerned party and his contact number to investigate further into the matter; if required.
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4.
Ask for list of approved buyers and if there is any doubt about it; discuss the matter with top authorities.
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5. Ask confirmation letter from the seller directly.
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6.
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See how long such transactions are being happening in the firm with particular parties.
.
7. See the payment terms. If these are on cash basis; then it may be a matter of doubt. Some officers of the company may use this tactic for short term finance of their own.
.
FIRST OF ALL; APPROACH DISPATCH DEPARTMENT WHETHER REALLY SUCH GOODS HAVE BEEN RETURNED.
Other points :
1.
There would be no "PAYMENT" to the creditor if goods are really returned.
.
2.
Check the VAT no. registration and address from the buyer by calling him on telephone (as printed on the bill itself) where the transactions are really pertaining to him.
.
3.
When series of such purchase return transactions are there; then ask purchase manager; why this has happened. Ask him the name of the person of the concerned party and his contact number to investigate further into the matter; if required.
.
4.
Ask for list of approved buyers and if there is any doubt about it; discuss the matter with top authorities.
.
5. Ask confirmation letter from the seller directly.
.
6.
.
See how long such transactions are being happening in the firm with particular parties.
.
7. See the payment terms. If these are on cash basis; then it may be a matter of doubt. Some officers of the company may use this tactic for short term finance of their own.
.
Message likes :
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08 June 2012
Capital Subsidy is the amount which is paid by the GOVERNMENT to boost industries in a particular region.
.
.
08 June 2012
Many times some items are purchased in open market for example Vegetables you buy from the open market.
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No vouchers is issued by them when you purchase.
.
If you ask; some "big" suppliers can issue you hand slips.
.
You can attach these (if available) with the vouchers to claim the expenditure.
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An auditor has to be careful about the prevailing market prices of the commodities which are being purchased by the firm.
.
One may refer newspapers for current market prices.
.
No vouchers is issued by them when you purchase.
.
If you ask; some "big" suppliers can issue you hand slips.
.
You can attach these (if available) with the vouchers to claim the expenditure.
.
An auditor has to be careful about the prevailing market prices of the commodities which are being purchased by the firm.
.
One may refer newspapers for current market prices.
08 June 2012
The question about need of Comparison !
.
Why you compare your marks with your friends when it is claimed that paper of a particular subject was tough ?
.
Why you compare your marks from one year to other despite the "fact" that you are one and same ?
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Comparison is made to make one alert about the things.
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If any expenditure is there and keep our eyes open about it; we make a control thereon.
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If certain items are on higher side than the previous year means two things :
.
(I) Either cost of the expenditure has increased due to inflation (like petrol).
.
(II) Activities of the firm has increased.
.
Exceptional Reasons :
.
Misappropriation of funds by the employees.
.
Claiming fictitious expenditures by the owners to show less profits to pay less taxes.
.
Why you compare your marks with your friends when it is claimed that paper of a particular subject was tough ?
.
Why you compare your marks from one year to other despite the "fact" that you are one and same ?
.
Comparison is made to make one alert about the things.
.
If any expenditure is there and keep our eyes open about it; we make a control thereon.
.
If certain items are on higher side than the previous year means two things :
.
(I) Either cost of the expenditure has increased due to inflation (like petrol).
.
(II) Activities of the firm has increased.
.
Exceptional Reasons :
.
Misappropriation of funds by the employees.
.
Claiming fictitious expenditures by the owners to show less profits to pay less taxes.
Message likes :
1 times
08 June 2012
One can't go to abroad without having passport and visa.
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RBI's permission is not required to go abroad.
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When you get Visa; it means Government has approved your foreign journey.
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RBI's permission is not required to go abroad.
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When you get Visa; it means Government has approved your foreign journey.
08 June 2012
Preliminary expenses are incurred when the company was not in existence.
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Hence in case of companies; such expenditure are required to be approved by the resolution.
.
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Hence in case of companies; such expenditure are required to be approved by the resolution.
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08 June 2012
Please don't ask so many questions in one query format.
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Nobody would be interested to "answer" or even read the query.
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Don't you get struck when one blows various questions on you ?
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Don't you feel "horrible" when question paper is too lengthy ?
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Nobody would be interested to "answer" or even read the query.
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Don't you get struck when one blows various questions on you ?
.
Don't you feel "horrible" when question paper is too lengthy ?
Message likes :
1 times
08 June 2012
Sir your explanation to the first question is fully practical. but these points did not strike at all in my mind...
i think sir, when i join articleship training i will understand the subject AUDITING much better as these practical things are such that we get to learn during articleship training only.....(par aisa exposure milna bhi zaroori hai)
Am i correct ??
i think sir, when i join articleship training i will understand the subject AUDITING much better as these practical things are such that we get to learn during articleship training only.....(par aisa exposure milna bhi zaroori hai)
Am i correct ??
09 June 2012
If you have zeal to get exposure; you can have it.
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Now-a-days; internet provides that facility.
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Without this; it was not possible to interact with "unknown" different people.
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Many "big" persons have emerged from small towns.
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You might be one of them (if you desire and work in that direction).
.
.
Am I right ?
.
Now-a-days; internet provides that facility.
.
Without this; it was not possible to interact with "unknown" different people.
.
Many "big" persons have emerged from small towns.
.
You might be one of them (if you desire and work in that direction).
.
.
Am I right ?
Message likes :
1 times
09 June 2012
Ya sir you are absolutely correct. I had never thought that i would be interacting with such good experts like you and many others on this site....
and sir here in Valsad there is not even a single class which provides good coaching(i mean for theory subjects its okay ..but we need a good teacher for practical subject), but as you said INTERNET solves this problem to some extent..
Like here in CA club my queries are getting solved and i get know many things out of the bookish knowledge...for e.g importance of articleship training ...
and sir here in Valsad there is not even a single class which provides good coaching(i mean for theory subjects its okay ..but we need a good teacher for practical subject), but as you said INTERNET solves this problem to some extent..
Like here in CA club my queries are getting solved and i get know many things out of the bookish knowledge...for e.g importance of articleship training ...
09 June 2012
Sir i would also like to share one more thing with you.. that is if i consider only studies
.
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like i said here we dont get good teaching but i get to know more here on ca club....but on the other hands i have some friends in Surat who took coaching in "big reputed classes".
.
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But when i asked them about various websites meant for students and even if i wish to discuss with them about ca journal or any other magazines, they are not interested at all..
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they only say that our Sir has told to read these notes etc etc...aur exam ke liye itna hi padhna hai...
.
.
and finally even after paying thousands of rupees and getting good teaching they took minimum 3 attempts to clear IPCC.
.
.
like i said here we dont get good teaching but i get to know more here on ca club....but on the other hands i have some friends in Surat who took coaching in "big reputed classes".
.
.
But when i asked them about various websites meant for students and even if i wish to discuss with them about ca journal or any other magazines, they are not interested at all..
.
they only say that our Sir has told to read these notes etc etc...aur exam ke liye itna hi padhna hai...
.
.
and finally even after paying thousands of rupees and getting good teaching they took minimum 3 attempts to clear IPCC.
09 June 2012
But sir what advantage they have..like in Surat , there is good scope for articleship
(aapse acchha to ye aur koi nahi jaanta hoga..).
.
.
while here in Valsad work is very very limited (not at all good for articleship)
. and in Vapi there are only 1-2 good firms, and there also CA's work as full time employees ...and other practicing CA's are freshers...
I am saying all this because i am really worried about my articleship training and thats why in my reply said "par aisa exposure milna bhi zaroori hai"
(aapse acchha to ye aur koi nahi jaanta hoga..).
.
.
while here in Valsad work is very very limited (not at all good for articleship)
. and in Vapi there are only 1-2 good firms, and there also CA's work as full time employees ...and other practicing CA's are freshers...
I am saying all this because i am really worried about my articleship training and thats why in my reply said "par aisa exposure milna bhi zaroori hai"
09 June 2012
Sir please dont mind ha...for my so many replies and bla bla...
.
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par aapse interact karne ka mauka mila hai to ise haath se jaane bhi nahi dena chahta..
:) :)
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par aapse interact karne ka mauka mila hai to ise haath se jaane bhi nahi dena chahta..
:) :)
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