what is the procedure to vouch purchases from the point of view of
1. Internal audit
2. statutory audit
3. VAT audit
5 Replies
Rahul
(CA Practice )
(1818 Points)
Replied 02 August 2009
Some Common Steps
1) First see the sanctioning authority for purchase of raw matertial, spares and capital goods.
2) See the PO and verify the rate and quantity from PO
3) Verify whetherproper VAT input is taken
Nithin Chettoor
(Assistant Manager)
(388 Points)
Replied 02 August 2009
Hi Harry,
For each of the audit u asked for, the objective of the auditor and the reporting authority is different and we can plan the audit techniques according to that.
Internal audit, u r reporting to the management. So, u need to check whether the purchase is required at tht time and the rate they hav selected is the best rate available for the transactions and whether all the contract terms have been strictly followed before entering into the transaction. And then the regular checking of the PO, its approval, then GRN for the goods received. Matching the quantity received with the inventory records in accounts.Matching the GRN qtys with the invoice raised. The rate of invoice matching with PO rate and whether all the items have been taken into accounts properly.
Statutory audit, we are concerned about the validity of the transactions. U just need to view the supportings for it. Approved PO, GRN, Invoice and the accounting for it.
VAT audit as the same, we are concerned about the VAT amount in the bill whether it has been taken into accounts when the bill is entered and then the same amount is taken as input credit and the same is furnished in the returns.
CA CS Amit Borade
(Chief Accountant)
(2828 Points)
Replied 03 August 2009
Hi Harry ...
Brief note on Purchase vouching
1. For vouching of Purchase 1st you have to understand the system of company.
2. Understand the production process.
3. Take a list of Authorised persons, who can order goods or material.
4. Understand the Process of Stores.
5. Verify which document is executed for requisition of Material? Who is authorised signatory?? Who is sanctioning authority??
6. Check Store Response for Material Requisition.
7. Verify document executed by Stores when material is not available with stores on Purchase Dept. (Authority & Sanctions)
8. Purchase dept Process... i) Vendor List--- Vendor Evaluation... Parameters of Vendor Evaluation etc. ii) Purchase Order Generation & Dispatch & authorities to sanction. Date of PO (always after Purchase Requisition) Qty & Rate, Delivery & payment details etc.
9. PO acceptance document by Supplier.
10. Goods Receipt Note, Lorry Receipt & Stores Record on Receipt of Goods
11. Inspection of Goods for Quality & Quantity + Quality Certificates & Lab Reports
12. Creation of Provisional Liability on Receipt of Goods.
13. Accounting Treatment for Supplier Bills.
Feel free to write for more details..!!!
taksh
(ARTICLE)
(26 Points)
Replied 16 March 2012
wen will my liability arise?????. will the purchases reflect in the accounts for 2010-11
Grn date:28/03/2011
materials inspected and accepted by stores:31/03/2011
bill recvd from supplier:02/04/2011
chidvilasb
(student)
(2 Points)
Replied 29 September 2016
Hi,i am also an article student like you. In my opinion liablity arise on 2-4-11
Recent Topics
- Ammendment in Partnership On Death of Partner and
- TDS Provisions applicability Tax Audit Individual
- NAME CHANGE OF HUF
- Advisory for Reporting TDS Deducted by scrap Deale
- Section 194 J Technical Service/Professional Servi
- Solving of Export Related Problems
- Need your valueble insight.
- Softex For freelancer ?
- GST ON REIUMBURSEMENT ENTRY ON GST PORTAL
- Missing invoice in gst
Related Threads
CAclubindia
