Greetings of the Day to All the Members of CCI Family .............!!!!!!!!!!!
Friend's My last Article was on " Auditing - An Beginers Guide " and It Comprised of the Basics to Deal An Audit.
/articles/auditing-a-beginners-guide-13749.asp
After writing it Most of my friends Requested me to Continue the series and Write On Audits Of Educational Institutions, Clubs, Hotels, Etc.
So I thought To start an series on Several Audits.
So lets go for it my friends -
AUDIT OF EDUCATIONAL INSTITUTIONS
1. Introduction -
- Examine the regulations or the Deed Of the Institution
- Ask from the Accountant - Regarding the Major source of Income
- Wheather they are serving for Profit or Non Profit Purpose
- Wheather They Have received any Grant From Government Or Not
- Where they have Invested their Respective Income
- After Doing all the Preliminiary work, Move toward Checking Of Receipts.
2. Audit Of Receipts -
- While doing Audit of An Educational Institution ( herein after refereed to as " EI ", All of you will generally Observe the following Incomes - Fees, Donations , From Investments, Etc. We will discuss one by one, So that it would be easier for All of you to Understand.
Fees From Students -
- This is the major source of Income for most of the EI's. So while doing the Audit makesure you consider the following points -
(a) Admission fee should be duly checked and check wheather or not the Refundable Amount has been shown in Liabilities
(b) Fee received from students should be duly verified with the Receips issuued to them.
(c) In case of late payment of fees, it should be seen wheather or not Fine has been duly imposed as well as collected.
(d) Fee concessions should be duly Authorises
Income from Investment's -
- It is generally found that all the EI's invest their income in Fixed Deposit's with specfic Bank.
- So it should be properly checked wheather or not Interest Or Dividend has been properly Accounted i.e Shown In Profit & Loss Account
- Demand Form No. 16A as well as Bank Confirmation Certificate from the client
Donations & Grants -
- This is also one of the major source of income for EI's
- EI's generally receive Grants From Government, so for it It should be seen that AS- 12 should be properly Accounted
- Suggestion should be given to client that Heavy Donations should not be received in cash and if they are doing it, they should ask for the PAN No. From The Donors for Transperancy Purpose
- Counterfoils of Receipts of Donations should be properly Vouched
Rent -
- Most of the EI's give some of the land on Rent to Banks, Canteens, etc
- So ask for the Rent Agreement from the client
- Rent received should be checked with the Receipts Issued.
3. Audit Of Expenses -
- Vouching should be done for the expenses
- Salary Register Should be Duly checked
- Expenses on Prize Distribution, Sports Day, Library, Sports Items should be duly authorised.
4. Providend Fund, ESIC and TDS -
- Check the link to my Earlier Article Given Above
5. Audit of Assets -
- Ownership as well as Existence of Fixed Assets should be physically Verified
- Ask the management to show the current balance of cash they have with them and verify it with the respective Account. In case of Discrepencies Qualify The Audit Report.
- Verify the Schedule to Fixed Assets
6. Audit of Liabilities -
- Main Focus Should be on the Corpus Fund Maintained By the EI'S.
- T h e t e r m ‘ c o r p u s ’ i s o f t e n c o n f u s e d a n d
7. Requirements -
- Form No. 16A and Bank Reconcillation Statement
- Bank Confirmation Certificate
- Rent Agreement
- Letter of Grant
- Additions to Fixed Assets
8. Disclosures -
- Regarding AS - 12 ( Accounting for Govt. Grants )
So My Article Comes to an end.
I Hope all of you will Appreciate My small Effort.
Any sought of Suggestions for the betterment of Further Articles will be Highly Appreciated
Thanks & Regards
Sanyam Arora
CAclubindia
