06 February 2008
i M CURRENTLY CARRYING ON VALUATION OF STOCK . I M FACING TROBLE WITH TRANSCATION WHERE MAJOR PURCHASE OF STOCK ARE MADE FROM SISTER CONCERN. I DOUBT IT BEING FICTICIOUS ENTRY HOW DO I TRACE IT UP ?
PLEASE GIVE OPINION WITH REGARDS TO DIFFEREENT FACTS AND CIRCUMSTANCES
06 February 2008
AS AN AUDITOR WE NEED TO SATISFY OURSELVES BEYOND DOUBT THAT THESE ARE GENUINE PURCHASES. TO VERIFY GENUINENESS ALWAYS WE RELY ON AN OUTSIDER CONFIRMATION RATHER THAN INTERNAL. FOR EXAMPLE TRANSPORT OF THE SAID PURCHASES CAN BE VERIFIED BY VISIT TO TRANSPORTER OFFICE AND SEE THEIR RECORDS. VERIFY VEHICLE MOMENT REGISTER IN SENDERS AND RECEIVER'S RECORDS. VERIFY STOCK STATEMENTS SUBMITTED TO BANKS . SUPPLIER'S INDEPENDENT AND WRITTEN CONFIRMATION WILL HELP. ENTRIES IN STOCK BOOKS WHETHER OVERWRITTEN OR CORRECTIONS FOUND ON THE DAY WHEN STOCKS WERE ACTUALLY RECEIVED. CREDIT OR CASH PURCHASES NEEDS TO BE VERIFIED.ACCORDINGLY WHAT ENTRIES ARE MADE IN BOOKS CAN BE VERIFIED. I EVEN KNOW HOW VEHICLE MOMENTS THROUGH SALES TAX CHECKPOSTS ARE ALSO TRACKED TO FIND THE TRUTH OR OTHERISE OF THE PURCHASES. HAVE A WILL ,THERE IS A WAY. COMING TO VALUES, CURRENT MARKET PRICES CAN BE A GOOD INDICATOR AS TO VERACITY OF VALUES ATTRIBUTED. A CHANGE IN VALUATION POLICY IF ANY MADE AROUND THE TIME OF THE PRESENT SITUATION CAN THROW REAL LIGHT ON VALUATION ERRORS. CONSISTENCY IN STOCK VALUATIONS CAN REMOVE DOUBTS .DIRECTORS'INTEREST IN GROUP COMPANY TRANSACTIONS WHETHER RECORDED IN STATUTORY REGISTERS NEED ALSO TO BE VERIFIED.APPROPRIATE STATUTORY APPROVALS FOR SUCH GROUP TRANSACTIONS MAY ALSO BE REQUIRED TO BE IN PLACE AS ALSO DOCUMENTATION FOR SUCH TRANSACTIONS ALSO GOT TO BE MADE. to get to the truth it is a tough task but not impossible. R.V.RAO
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