Diese Präsentation wurde erfolgreich gemeldet.
Die SlideShare-Präsentation wird heruntergeladen. ×

Internal audit and statutory audit

Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Wird geladen in …3
×

Hier ansehen

1 von 13 Anzeige

Weitere Verwandte Inhalte

Diashows für Sie (20)

Anzeige

Ähnlich wie Internal audit and statutory audit (20)

Anzeige

Aktuellste (20)

Internal audit and statutory audit

  1. 1. Auditing is a systematic examination of the books and records of a business or other organization in order to ascertain or verify and to report upon the facts regarding its financial operation and the result thereof’. R.B. Bose has defined as ‘Audit may be said to be verification of the accuracy and correctness of the books of accounts by independent person qualified for the job and not in any way connected with the preparation of such accounts’. The word ‘audit’ is derived from the Latin Word ’auditure’ which means to hear . Formerly a person responsible for maintenance of accounts went to some impartial and experienced person, who used to check these accounts and express his opinion about its correctness. These experienced persons were known as ‘auditors’.
  2. 2. The role of the internal auditor normally involves checking, verifying and reporting on: 1. Financial information required by the management. 2. Costing information required by the management for example budget, variance, cash forecasting, etc. 3. Effectiveness of internal control system, preventing loss of assets or manipulation of accounting data. 4. Efficiency of companies management particularly in the way in which it formulates its plans, policies and decisions.
  3. 3. A person or a group of persons deputed to audit the accounts is/are called internal Auditor/s. These persons may be an internal part of the organization (employees) or can be hired from outside agency to audit the accounts. Internal auditing of accounts is not compulsory. The internal Auditor may not be registered Chartered Accountant(C.A.).
  4. 4. An auditing is not only useful to the management but it also ensure socio-economic benefits. The following are the advantages of auditing : Benefits to the Management: 1. It detects the errors and frauds. 2. It keeps employees more alert. 3. It reduces the wear and tear of assets and also helps in better utilization of assets. 4. It increases profitability. 5. It reduces the cost due to better management, efficiency and control. 6. It points out management’s weakness and recommends better accounting systems.
  5. 5. Benefits To The Share Holders and General Public: 1.This tells the public whether is making sufficient profits or not. 2. In its reports, it gives the information like earning per share, cash earning per share ,debt equity ratio, price equity ratio, comparative balance sheets, comparative income expenditure statements, etc. This helps public and share holders in deciding whether to invest n the company or not. 3.The public gets goods and services at reasonable prices.
  6. 6. Benefits To The Governments: 1. The bills at cost plus profit submitted to the government are settled without dispute. 2. The government can fix prices of essential commodities. 3. The subsidies can be decided after studying the cost and selling price government wants to fix. 4. It helps in fixing the export price for commodities. 5. The income tax and other tax authorities accept the reports submitted by the auditors.
  7. 7. Through auditing has many advantages but the effectiveness of this department depends on the following limitations: 1.Qualification: The auditors must be well qualified and they must know their job perfectly. 2.Experience: The prior experience of auditing is very essential to audit the accounts accurately. 3.Independence: The auditor must be extended independence. That is why usually they are hired from outside. Even if internal auditor/employee are to be used then he must not work under accounts department. In fact he should report to General Manager or Director of the company. 4.Access To Records: The auditors must have an authority to have any or all the documents, files, etc. for the purpose of auditing. 5.Safety: The auditor must not feel unsafe or submitting adverse reports on the organization in general or any department in particular. 6.Adequate Staff: There should be adequate number of persons to
  8. 8. External Audit/Statutory Audit/Compulsory Audit: It is a compulsory audit done by outside agency at least once, at least once, at the end of the financial year. As per SEBI guidelines public limited companies are required to have the companies accounts after every three months. Only registered Chartered Accountant Auditors are authorized to audit the accounts and sign it. The following are the reason to have statutory auditing: 1.All public limited companies must have their accounts auditing by external auditors. 2.All government departments and Government owned companies must get their accounts audited from external Government approved auditors(usually A.G. Office). 3.All Government funded organizations, corporations, societies; corporation must get their accounts audited. 4.All registered societies, which collect donations from public, must get their accounts audited from external auditors. 5.Any company which intends to borrow money from government or financial institutions must get their accounts audited. 6. Any other company may be asked to get their accounts audited from external auditors.
  9. 9. The auditing for hotels differ from the type, size of the hotel. The degree of mechanization has a great impact on the auditing of hotel. The auditors must examine the system or internal check in vogue with regard to the ordering, purchase, receiving, storing, issuing, etc. He is also expected to check the system of book and record keeping in vogue in the hotel. The cash books receipt and payment side must be checked and tallied with check books. All cuttings, overwriting, discount, allowances, missing checks, etc. must be examined. All receipts must be made against the proper printed and signed receipts and should be entered either in the sales summary sheets or cash book.
  10. 10. As far as possible no cash payments should be made expect payments made by petty cashier. Salaries and wages must be paid by cheques after receiving the bills from personal department and attendance from Time Office and the concerned departments. Cheques should be issued to suppliers against their bills along with the supply order, invoice, store keeper’s receipt, etc. please also refer to previous chapter for more details.
  11. 11. NIGHT AUDITING IN HOTELS: Each hotel appoints a night auditor who works independently and reports to either Chief Accountant or to General Manager. His duty starts after 9 p.m. and works until next day morning. Due to his night working hours he is termed as Night Auditor. He audits the accounts of Front Office Cashier.
  12. 12. He performs the following duties: 1.Reconcile all sales statements submitted by the various departments cashiers to front office cashiers throughout the day. 2.He verifies all the debit and credit vouchers at Front Office Cash. 3. Checks guest folios. 4. Verifies front office cashier reports. 5. In some hotels he is also required to post the un posted vouchers at Front Desk and also debit all rooms with the day’s room tariff. 6.In case of Cash Register Machine (like N.C.R. Cash Registrex, etc.) He clears the machine. 7.Prepare a statement of bills for those rooms whose bill crosses a specified amount. 8.He audits night receptionist’s room reports. 9.He checks the accuracy of accounts like over charging, under charging, cutting, discounts, allowances, etc extend to guests. 10. He checks the City Ledger Account before transferring to Account Department for collection of bills.

×