whether this is a query or not(Internal Audit) ??

This query is : Resolved

CA Abhishek Singh (Querist)
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06 October 2010 i am doing internal audit of a client. it is observed that booking of expeses is not done and expenses are booked only at the time of payment.
E.g. telephone exp. ---dr 12000
to bank---12000
instead of passing foll. entry
tele exp------12000
to exp payable----12000

exp payable----12000
to bank----12000

what for miscellaneous expenses like local conveyance exp of rs.10, tel exp rs.5 etc.

plz. clarify

Ramanananda

Ramanananda (Expert)
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01 November 2010 there is nothing wrong in making such entry, if the same has been made immediately and within the cut off period march 31 of dec 31 as the case may be,...

however if the expenditure of the march is paid and booked in april, the assumption of cut off will be losting... u need ensure that the all the expenditure for the march month, or the provisions should be booked properly..

in case of miscellaneous expenditure u can of course look into the materiality of the engagement.... however u should check the policy of the entity ..

hope this clarifies you.....