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How to verify ???

priyanka (manager) (109 Points)

04 June 2008

Hi All...... I have some querry during an audit of a PvtLtd co. as below

1. Sales commission for which bills issued by Individuals :: Whether to demand debit note or bills and also agreement with them and commn's calculation ???

2. Leave Travel Assistance given to Directors and their wives :: Whether anything to demand or verfiy in this respect like co's policy ??

3. Cars given to Directors and of which petrol bills and repairs paid by directors by their own credit cards later on bills of credit cards paid by company to banks :: whether it is to be quantified in FBT calculation ?? How ??

4. Signboard made by co claimed as printing & stationary :: Whether to capitalise ???

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Rushikesh (Chartered Accountant - Manager Finance) (2375 Points)
Replied 05 June 2008

1.For the Sales Commission check the policy of the company and the contract in place for the rate and other details. Also, check the sales bills for the sales made by them. These can be in test check.

2. For the LTA given to the directors, again check teh company policies, the relevant bills for the LTA

3. Check the payment details in the Credit Cards through the statements, and check if the payment is made according to the company policies and the Act. This surely quantifies in FBT. here are many files in the Shared files for FBT calculations, check those.

4. Signboard can either be capitalized if a major one or shall be written off in advertisement expenses or sales promotion expenses, but not printing & stationery.