How do you check expenses in statutory audit?

Apply the “Analytical Testing” method for verifying the expenses & based on that derived the expected figures & compare with the actual figures recorded in the financial statement. Verify if any “Related Party” transaction made during the year & ensure that are presented in the financial statement.

What is government expenditure audit?

The audit of Government Expenditure is one of the major components of government audit. The basic standards set for audit of expenditure are to ensure that there is provision for funds should be authorised by competent authority fixing the limits within which expenditure can be incurred.

What are auditing expenses?

Expense audits are done by evaluating the actual paid expenses by how closely they align to the internal policy guidelines. Expense audits can also include a reasonableness check, which determines if expenses are out of the ordinary. Expense audits typically require requests for and reviews of: Documentation. Invoices.

What should I check during statutory audit?

Check any expenditure of capital nature charge in revenue expenses. Check whether GST tax input claim on any expenses. Check such input claim in GST return in GSTR 3b. Identify the expenses which are disallowed under Income Tax Act, 1961.

How do you do a statutory audit?

What Is The Process Of A Statutory Audit In India?

1. Assets. The auditor should physically visit and verify the fixed assets.
2. Inventories. The auditor must physically verify the inventories of the company.
3. Loans.
4. Deposits.
5. Statutory Dues.
6. Profit and Loss.
7. Other Dues and Payments.
8. Loan Usage.

How do you audit completeness of expenses?

Completeness

1. Select a sample of goods received notes (receiving reports)
2. Trace the selected goods received notes to purchase orders and supplier invoices.
3. Trace the invoices to the expense transactions in general ledger.

What are the components of government audit?

GOVERNMENT AUDIT.

How are auditors of government companies appointed?

As per Section 139(5) in the case of a Government Company or any other Company-owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, the Comptroller and Auditor-General of India …

How do you audit administrative expenses?

Audit Procedure of Operating Expenses

1. How to design the audit procedure?
2. Controls over Internal Expense.
3. Reasonableness of Expenses Check.
4. Timely Expense Processing.
5. Accuracy and Documentation.
6. Vendor Legitimacy Verification.
7. Classification Testing.
8. Completeness Testing.

How do you audit Interest expense?

Small businesses that make debt payments often include interest expense on their financial statements. To test interest expense, auditors will often obtain the original loan documentation or promissory note and recalculate the amount of interest expense owed.

How do I do a statutory audit?

What are the steps in statutory audit?

1) First you examine Documentary Evidences regarding appointment/reappointment of an Auditor. 2) Examine Last Year’s copy of Audited Balance sheet, profit & loss account , schedules, notes on accounts along with 3CA/3CB, 3CD & Audit Report. 3) Carefully Examine the internal control system of the company.

What is Stat audit and how to do it?

A To begin with I must say that stat audit is a work of great responsibility as you are reporting to the shareholders of the company via it’s directors. You must conduct an in-depth scrutiny of all the edgers of the Company. Check whether expense have been booked properly and under apt head.

What are the procedures for carrying out audit of major expenses?

He shall follow below procedures for carrying out audit of major expenses covered by the business unit: Check the nature of agreement and obtain assurance as to the reasonableness of the amount charged. Verify whether the necessary documents or supporting vouchers are attached with the expenses.

What is the difference between an audit and a statutory audit?

An audit is an examination of records held by an organization, business, government entity, or individual, which involves the analysis of financial records or other areas. A statutory audit is a legally required review of the accuracy of a company’s or government’s financial statements and records.

What happens when an audit review expenses?

When reviewing company expenses, auditors evaluate expenditures to make sure they were necessary and in line with internal policies. Expenses can be anything like the company paid money for in return for income – rent, invoiced expenses like the cost of supplies and reimbursable expenses such as travel charges incurred by an employee.