Friday, 30 September 2011

Explain the special points that an auditor should kept in mind while examining the accounts of a textile mill

Auditor should keep in mind the following points while auditing the accounts of a Textile Mill :

1. Checking Of Internal Control :-
While auditing the textile mill, auditor should examine the internal control system to find that it is working efficiently or not.

2. Verify The Legal Documents :-
Auditor should verify all the legal document likes articles and memorandum of the company. he should see that all the decisions are made according the documents.

3. Examine The Minutes :-
Auditor should also examine the minutes of the meetings carefully to know the real position.

4. Balance Sheet Examination :-
Auditor should verify the balance sheet and check that all assets and liabilities shown are correct. These are actually owned by the business or not.

5. Examination the Outstanding Balance :-
Auditor should verify that outstanding assets and liabilities in the books of accounts have been recorded or not.

6. Cash And Bank Balance :-
Auditor should verify the cash in hand with the cash book. He should also confirm the bank balance directly from the bank. He should also see that pass book entries are compared with the cash book or not.

7. Verified The Fixed Assets :-
Auditor should check the schedule of fixed assets and previously audited working papers.

8. Damage Stock Checking :-
Auditor should verify that damage stock items are written down to their realizable value or not.

9. Stock Valuation :-
Auditor should obtain the schedule of all types of stock in hand. He should see that stock in hand has been properly valued as shown in the balance sheet.

10. Physical Test Check :-
Auditor should apply the physical test to check the various items of the store for their physical verification.

11. Adequate Depreciation :-
Auditor should examine that a sufficient depreciation is provided for the fixed assets.

12. Vouching :-
Receipts and payments vouching should be carefully examined. In this regard auditor should check all the documentary evidences.

13. Proper Allocation :-
Auditor should verify that proper allocation between capital and revenue has been made.

14. Checking Of Raw Material :-
Auditor should obtain all types of raw material inventory and compare it with the ledger and check figures of raw material schedule are correct.


Abdul,  17 January 2014 at 23:52  

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