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Saurabh Toshniwal (ca final) (2363 Points)

30 January 2013

i am coducting internal audit of a ltd. co. which points to be checked in case of bank, sales & sales against c form

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4 Replies

CA Karan Lodhi (CA and B.com(hons.)) (879 Points)
Replied 30 January 2013

Reconciliation statements of banks on monthly basis.check payment advice and trace the amount in respective ledgers.Check for any unusual outflow from bank...

In case of sale, check the sale invoices, Invoice No., party name, date, amount and check whether different components are correctly accounted for or not e.g basic sale amount, discount(if any), VAT/CST, amount of VAT/CS.Verify rate of VAT/CST applicable on different items.

If any sale is made against C form then ask the Management whether or not original C form has actually been received from customer..CST in that case should be 2%.VAT/CST Return should be examined and ascertain whether entity is filing returns on time or not and check for period of return applicable to the entity i.e monthly,quarterly annualy etc.(depends on turnover). Check whether VAT/CST is deposited within time or not.

Ascertain whether VAT input has been taken properly while computing VAT liability.

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Saurabh Toshniwal (ca final) (2363 Points)
Replied 30 January 2013

Dear karan,

when should c form be checked, whether it should be checked while checking sales or after or before checking sales.

CA Karan Lodhi (CA and B.com(hons.)) (879 Points)
Replied 30 January 2013

C forms are sometime received from customers after the sale is made but in that case you must take the WR from Mgt. or confirmation from concerned person and keep open your senses ,if doubt.Check whether sale is made to the party concerned in past or not, this will give you an idea about whether the customer would be able to supply C form or not.

(Guest)

Hi Saurabh,

For Bank, first you should trace the balance shown in ledger with Bank Statement. If there is any difference between these 2 balances then you should ask the management for Bank Reconciliation statement. Then you should perform checking of BRS. This checking is done only to ensure that the cashflows are accounted properly and there is no leakage of funds.