17 November 2011
I dont have a proper audit programme. But then, these may help you prepare an audit program.
Analyse the works company carry out and the kind of jobs the company undertakes. Perform a walkthrough for such transactions, checking all the documents and meeting and discussing with all the concerned persons.
Analyse the accounts records maintained by company, its system of accounting, accounting policies, standard operating practices, etc. Understanding the business of the client (indepth) will help you understand the key areas and in the course of understanding only you will come to knwo about the "risk areas" in a construction company audit.
Sub-divide the works of the company into various small segments - for example for one multi storey bldg project, break each activity of the project to be analyse, audited and commented upon.
You will be able to draft an audit programe, review it and finalise the audit programe... its a continuous process. you can modify the audit programme as and when the audit progresses.
Concentrate on the areas like :-
Revenue recognition (very important)
Work Completion certificates
Realisation of money dues
Government clearances ; various permits ; allowance for the comstruction to be undertaken (all these are very important)
Land Deeds and whether construction is permitted on such land
Stock valuation and controls
Terms of Agreements executed, clauses of agreement and their fulfillment.
CAclubindia
