Scrutiny of Record for Audit Purpose

sales revenue

revenue rendering service

revenue from sale of fixed assets

income from interest, dividend

Cash balance

investments

bills receivables

Debtors

ensure presence of somebody from management

obtain a receipt from custodian as to its return

ensure postage and revenue stamps are not counted in physical count

temporary advances to employees are counted to calculate balance of cash in hand

the amount has been deposited in a separate bank account

deposited with the cashier

held in a safe deposit box

all of these

no insurance has been undertaken for building

lien on building

insurance premium has not been paid

insurance premium paid but not recorded

existence and ownership

valuation and disclosure

possession and ownership

completeness and valuation

Credit notes, advice notes and inward return notes

debit notes, advice notes an inward return note

purchase invoices, advice notes and inward return notes

credit notes, inspection report and inward return notes

Existence and ownership

Valuation and disclosure

Possession and ownership

Completeness and valuation

depreciation charges are insufficient

policy of sale or disposal of fixed assets needs to be reviewed

the sale of assets has not been properly authorized

accounting errors

cash in always material as materiality is qualitative concept

no audit of cash is needed when, in auditor’s opinion, cash is immaterial. Materiality is a Relative concept

the cash balance need only be audited if the balance is in overdraft

cash is to be verified if control risk is assessed as high