Maitaining huge cash balances
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 December 2011
I observed while doing audit for a listed company, the company with draws an amount of 10crores cash and it deposited after 3 months without using any purpose. Is it attracts Offence under any act to maintain such huge cash balance, if yes what is penal consequences? Please clarify me?
14 December 2011
There is no Offence in the instant case. But as an auditor you are supposed to comply with the Guidance Note issued by ICAI for the said purpose.
Accordingly auditor shall query the company for the reason for maintaining such large cash balance on hand. He should also perform procedures to verify the source of such large balance and the reason why company has maintained such unduly large balance for a period of three months during the year.
Auditor has to perform additional procedures because of the Guidance Note issued by ICAI.
Accordingly auditor shall query the company for the reason for maintaining such large cash balance on hand. He should also perform procedures to verify the source of such large balance and the reason why company has maintained such unduly large balance for a period of three months during the year.
Auditor has to perform additional procedures because of the Guidance Note issued by ICAI.
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