How would you verify the following items, 1. Plant and machinery 2. Patent trade mark and copyright 3. Cash at bank 4. Cash in hand

VERIFICATION OF PLANT AND MACHINERY :-
Auditor will verify the plant and machinery in the following way :

1. Auditor should vouch the purchase of a plant with the receipts and invoices.

2. It should also be checked that all the expenditure on this account is a capital charge.

3. If the plant is erected by the client own men then auditor should check that allocations of plant has been made correctly.

4. Auditor should check the schedule of the plant and machinery which should be certified by th engineer.

5. Auditor should also do the physical checking of the machinery if possible.

6. Auditor should also verify that sufficient amount of depreciation is provided for this asset or not.


VERIFICATION OF PATENT TRADE MARK AND COPYRIGHT :-
Auditor should verify the patents, trademark and copyright with the help of relevant documents. He should examine the schedules and check that all these are certified by the responsible officer or not. If any agreements made it should also be checked by the auditor. Auditor should also check that renewal fees have been charged or not.


VERIFICATION OF CASH AT BANK :-
Cash at bank can be verified by the auditor in the following ways :

1. Auditor should examine the bank pass book.

2. He should compare the pass book with the cash book.

3. He should obtain a certificate directly from the bank.

4. Verify the cash balance with the bank reconciliation statement.

5. Auditor should verify the cash in fixed deposit by examining the deposit receipts. He may also get the certificate from the bank in this respect.


VERIFICATION OF CASH IN HAND :-
There are two methods to verify the cash in hand.

1. First Method :- On the date of balance sheet auditor should count cash in hand and compare it with the balance sheet. All the cash should be produced at once at the same time. Because one cash may not be counter balanced by the other. If auditor can not attend immediately on that particular date then he may visit on a subsequent date. He should count the cash in hand and vouch the petty cash by comparing it with the books of account.

2. Second Method :- According to this method auditor should ask his client to deposit the whole cash in hand into the bank on a closing date. On the following day cheque should be drawn for cash by the client to reopen the cash accounts.

Effective Check :- Auditor should pay a surprise visit during the year and check the balances.