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Audit of share traders

Jyoti Narang (Kkk) (1203 Points)

01 January 2022

what are the documents required for doing share traders audit.just profit and loss statement from broker or anything else

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 02 January 2022

Statement of daily transactions, bank statement.

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Jyoti Narang (Kkk) (1203 Points)
Replied 02 January 2022

And from where they are matched.transactions to be matched.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (170785 Points)
Replied 02 January 2022

Cross verification of each transaction with Contract note &/or bill.

Jyoti Narang (Kkk) (1203 Points)
Replied 02 January 2022

Ok thanks

Mehul Suthar (30 Points)
Replied 02 January 2022

1. Ledger of Intermediates ( Motilal Oswal etc )
2. Contract Notes
3. Demat Statement
4. Bank statement
5. Tax Profit and Loss ( Can be downloaded from the console which is helpful incase you want Proper Segregation of Short Term Capital transactions , turnover or Intradays )

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Jyoti Narang (Kkk) (1203 Points)
Replied 02 January 2022

Trading is done on zerodha so please tell what docs are required.

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Mehul Suthar (30 Points)
Replied 02 January 2022

Ask your Client to go for Zerodha Site,
Then In Profile option there is report Generation option provided with ' Console'
There you can get various Reports regarding intraday Turnover, Short Capital Gain Scrips, Long term capital Gain Scrips In a Single Excel sheet.
Follow Below procedure
1. Zerodha
2. Console Option
3. Report
4. Tax Profit and Loss sheet

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Jyoti Narang (Kkk) (1203 Points)
Replied 02 January 2022

Then how to cross check it

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Mehul Suthar (30 Points)
Replied 02 January 2022

For conducting Audit you are required to ascertain the turnover for Intraday, And Gains with respect to short Term and Long term. ( Which should be appropriately reflected in Books of accounts maintained by Trader )
#Segregation of Income from Futures and Options too.
Cross tally with Books
at the end of year
1. Ensure Income is segregated
2. Turnover need to be tallied
3. Ledger closing balance should be matched with books ( Speciall Zerodha ledger )
4. Units left unsold at the end of year
5. Margin account should be tallied.

You need to test check contract Notes , whether they appropriately accounted each intraday transaction.

Your Workflow should be
1. Zerodha Ledger should be tallied.
2. Testcheck Contract Notes ( If you have big turnover do Test check by taking appropriate sample size or if it is not big giant then Check each contract notes )
3. Intraday Turnover with books Should be match with Tax profit and loss od zerodha
4. Test check Short Term gains with Tax Profit and loss from Console
5. Test Check Long term Gains with tax profit and loss from Console
6. review Expenses on account of trading are properly segregated.
7. Units Unsold