10 October 2013
I have been appointed as Statutory Auditor of one of the Educational Trust in my city. The trust have many school and each school have many section. I want to know while doing audit which documents(like 12A Certificate) should be collected from client? Which documents must form part of my audit file? What precautions should be taken while doing audit and making audit file?
10 October 2013
1. The auditor should go through the University Act. Trust deeds and should note the rules and regulations relating to accounts. The governing body may pass resolutions from time to time in respect to accounts. A copy of minutes books should be made available to him so that he may be able to confirm whether the decision of the government body have been compiled with. 2. Auditor should obtain a copy of budget or financial statements to study of different heads of income and expenditure. 3. Auditor should thoroughly assess the strength of internal check. 4. Auditor should vouch the grant-in-aid from the government carefully. 5. Auditor should verify the receipts of monthly fees from students, from counterfoils or carbon copy of the receipts. He should also see whether cash received has been banked daily or not. 6. Other charges from the students such as examination fees, laboratory fees, fines etc. should be carefully verified. 7. Any fees received in advance should be properly adjusted. 8. The concession of fees and other charges should be duly authorised by the proper authority. Any charges becoming irrecoverable should be written off only after proper authority has recommended. 9. Any grant-in-aid or funds received for a particular purpose must be utilised for the same. 10. The donations and other subscriptions from the various authorities have been accounted for and acknowledged. 11. The income from property, investment etc., should be properly verified from the vouchers. 12. Auditor should vouch the amount of salaries paid with the Salary Register. Any increment given to an employee shall be duly sanctioned. 13. The staff provident fund should be verified and it should be seen that it is invested as per the rules. 14. The establishment expenses must be carefully vouched and it should be seen that capital expenditure has not been treated as revenue expenditure or vice versa. 15. The payment of scholarship should be verified with the receipt from students and Scholarship Register. 16. All the assets and liabilities should be properly exhibited in the balance sheet. 17. The stock of equipment, stationary, furniture should be carefully verified. 18. While making payment of staff salaries, income tax should be deducted at source and shall be duly deposited with the Income Tax Department.
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