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Please Suggest this in Audit Aspect

priyanka (manager) (109 Points)

06 June 2008

Dear All

I have confusion regarding the following matter

1. In a Pvt Ltd co there are 3 Directors (being authorised signatory).. All are paid advance cash in each month against that months expenses of Travelling and Car and each Director authorises the advance payment by himself.

Whether this will do ??? or the other Director will have to approve the same ??

2. On payment of Advance Cash to Director .. whether Affixing of Revenue is required ??

3. Whther an Individual not having any business can rasie Bill instead of Debit Note to charge Commission from the Company ??

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3 Replies

Sanjog R. Jain (CA Final Appeared) (48 Points)
Replied 07 June 2008

Dear Priyanka,

Answer of UR query:

1. Advance payment for travelling and car payments require no authorisation of board if of business expenditure. If the same are expenditure of personnel natrue shall count in managerial remuneration and shall be decided by board.

2. Revenue Stamp is required for everybody who receive cash payment more than Rs.5000.00 and no exemption for director.

3. Your question have conflict in drafting. You said individual have no business but charging commission is also business. He can raise the bill.

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priyanka (manager) (109 Points)
Replied 07 June 2008

Thank You for your helpful replies....

But I would require your help in an area of Advance Payments made to Directors for travelling purpose for which the same vouchers are authorised by the same Directos who are paid for Travalling ... Whether this will do???? or the other Directors will have to authorise ???