how to check balacesheet items in internal audit and tax aud

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 August 2010 i want to know that how to check balancesheet items in tax audit and internal audit purposes example if u want to check furniture balance is 40000 for tax and internal audit we have to check bills of purchase of furniture or we have to go to see physically verified furniture at factory

please explain which items to be physically verified and which items to be checked on bills basis ???

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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07 August 2010 Auditing is a matter of judgment on the basis of underlying circumstances in addition to the vouching and verification.

For tax audit purpose; you can reply on vouchers.

When you are engaged in Internal Audit also; then you can check the Furniture physically.

But, if other matters are more important than this one; first focus on the important matters than furniture only.

Practical application of Materiality Concepts is very important while conducting audits.