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AUDIT PROGRAMME FOR

PERIOD
P & L Account
PARTICULARS
TRADING AND PROFIT AND LOSS ACCOUNT
Sales
** Accounting policy followed by the company for
recognition of sales
** Cut off procedure
** Credit notes/ Debit notes if any,
* *Break up for Export and domestic Sales
** Check with Reconcilation of VAT and Excise
** Variance analysis
** Pending orders
Other Income
** Vouching
** Verification of interest amount
** Verification of Dividend amount
** Verification of Royalty amount and agreements for
the same
** calculation for any sale of asset/ scrap etc
** Cut off procedure
** Variance analysis
Purchase and other Direct Expenses:** Break up for different type of Purchase
** Custom Duty analysis
** Duty paid on purchases
** Capitalization of incidnetal expenses relating to
Purchase
** Purchase Retun and DR Note confirmation
** Cut off procedure
** Variance analysis
** Verification of PO (open or not open)
Direct Expenses
** Expenses vouching
** Expenses for Fuel consumption
** Freight and forwarding Expens analysis - relating to
RM
** Cut off procedure
** Variance analysis
Indirect Expenses analysis and vouching
** Cut off procedure
** Variance analysis
Persoanl Expenses of Director
*Travelling Exp and conveyance ledger analysis
* Foreigin Tour Ledger Analysis
Capitalization of freight and custom duty
for Import Machinery
* Freight ledger analysis
*Machinery Ledger Analysis
Prior Period Transaction Verfication-- Cut off
procedure (Expenses and Incomes)
**Analysis of Cash ledger
** Find out the expenses in cash book which are
relating to previous financial year
** Purchase account analysis
** Stock ledger and GRN analysis
Prepaid Amount Verification
** Prepaid expenses calculation sheet
** Ledger analysis
**Freight
**Custome Duty
**Any other Expenses
Revenue / Capital Expense analysis
** Find out the freight and other expenses for capital
goods in profit and loss account .

STATUS

** Find out the revenue expenses have been debited


in the Asset account
The following ledgers can be taken for analysis
** Freight ledgers
** Custom duty account
** Prepayment custom duty account
** Asset repair and maintenance expenses
** Asset account and other assets account.
** Finally capitalize all the expenses in the PL which
are relating to capital nature
** Finally decapitalize all the expenses in asset
account which are relating to revenue nature

Electricity Expenses
** Monthwise breakup for all payments
** Check whether there is any interest receivable for
deposits
** Check whether there is any deposit adjustment
during the year for the current year consumption.
** Match with TDS receivable certificates and for
Interest receipt for the interest from electricity board

AUDIT PROGRAMME FOR


PERIOD
BALANCE SHEET
Capital Account/ Share Capital
** Movements in share capital
** Buy Back prodedure to be followed if there is any
buy back
** Fresh issue procedure to be followed if there is
any fresh issue
** Inflow in capital accounts
** FIRC Copies and RBI approval from foreign
inwards towards capital
** Share application money pending allotment
Reserves and Surplus
** Movements in reserves and surplus
** Types of Reserves
** Specified reserve to be used for specific purpose
** Distribution of Surplus if any during the year
Secured Loan Analysis
** Terms and conditions of the loan
** Interest calculation
** Repayment schedule of the loan
** Charge creation if any , hypothecation on assets
and creation of equitable mortgage
** Calculation of Interest accrued but not due
** Calculation of Interest accrued and due
Unsecured Loan Analysis
** Agreement with parties
** Loan taken from directors
** Terms and conditions of the loan
** Interest calculation
** Repayment schedule of the loan
** Application of sec 269SS and T
Provision calculation - Liability
** Provision for Interest Payments
** Provision for Expenses
Statutory Liability Provisions in respect of
**ESI

STATUSREMARKS

**EPF
**Leave Encashment
**Tax Provision (115JB and Credit calculations)
** Deferred Tax
**Wealth Tax Provision
**Bonus Provision--- Exgratia
** TDS/ TCS Payable
** Professional Tax
Other Provision
*Excise duty on final Finished Goods
* Goods in transit valuation
*Provision for Royalty and Techincal Fees
* Price reduction
*Warrenty Provision
*Employee Benefits Provision as per AS-15
*Provision for Bad debts
*Audit Fees
Provision Reversal entry
* Excise duty on the opening---- Reversal to Excise
duty of Current year
* Goods in transit
---- Reversal to
Purchase of current year
Accrued Incomes
* Interest Receivable-for Loan and advances
* Bank interest reconcilation with TDS Receivable
Certificates
Creditors ledger Analysis
** Creditors ledger Review
** CRS having negative balance and reasons for the
same
** Balance Confirmations
** Prepare Aging Analysis for More and less than 6
months
Debtors ledger Analysis
** Debtors ledger Review
** DRS having negative balance and reasons for the
same
** Balance Confirmations
** Prepare Aging Analysis for More and less than 6
months
Cash & Bank Analysis

* Cash vouching & Bank vouching


* Cash payment not exceed Rs20000( Relevant
section in IT 269SS and T)
* Only Bank payment above Rs20000
*All Bank reconcilation and their confirmation from
bank
Bank Interest calculation and Recognition
* all FDR and TDS Certificates and Interest Workings
* All deposit
* Match with PL with Interest received.
Fixed Asset Addition and Deletion analysis
* Fixed Assets Register Analysis and copies of all
invoices
* Prepare the Compay Dep as per Sech XIV
* Disposal of Assets and Management confirmation
for such
*Profit and loss of sale of assets
*Reversal of Depreciation for the sale of assets
during the year
*Reconcilation of Assest Deletion with IT Dep and
Comp Dep
*Reconcilation of Addition with IT and Company - If
any diff in IT that should be in the nature of 43A
Capitalization portion only.
year
Closing Stock valuation and Mgmt certificates
Management
* Qty Wise Reconcilation with Excise Records
* Qty wise production and sale during the year
* Input and Output Ratio for Raw Materials
* Provision on FG
* Valuation method adopted for WIP and FG
*RM stock Valuation
Investments
* List of Investment
* List of investment made during the year
* List of investment sold during the year
* Valuation of the quoted investments
* Valuation of unquoted investments
* Nature of investment long term/ Short term
* Dividend receivable
* Interest Accrued but not received during the year
* Interest Received during the year

* Investment fluctuation reserve if any


* Match with TDS Receivable certifcates for Interest
accuracy
Deposits
** Verification of Deposit certificate
** Confirmation for such deposits
** Agreement if any for such deposits
Loans and Advances
** Terms and conditions of the loan
** Interest calculation
Inter corporate loan
* Check whether any provision in the AOA
* Sec 372A Not applicable for Private Company
* Check the agreement and interest provision
Foreign Exchange Rate Fluctuation
Calculation
** As Per AS 11
** ECB Loan Fluctuation
** Export Sale Fluctuation
Tax
** Segregation of Forex between RM and CG
** Re state of Closing balance as per March -Closing Rate - ONDA Site
**Exim Bank rate fluctuations
**Restatement of Import Purchase liability and Exim
Bank
Confirmation of Balances for
** All bank account
** All Bank FDR
** All Major Debtors
** All Major Creditors
** All Deposits
Preparation of Check List for Applicabilty of
AS
Responsibilty of Management and Finance
Head
Final Tally Backup , Excel soft copy, TB Print,
Detailed TB and duly singed by MD/ Finance
head/Management
Audit Team Certification for
** Opening balance verification
** Closing Balance verification

** Latest print out/ final print soft copy

AUDIT PROGRAMME FOR


PERIOD
STATUSREMARKS
Deferred Tax Assets and Liabilty reversal
* Reconcilation with IT profit and Book Profit
* for IT and Company Depreciation
* Section 43A adjustment
* Timing difference reversal in the subsequent year
* for Unabsorbed Dep
* for Carried forward Loss
* for deferred expenses
* disallownces under section 40(a)(ia),
* Section 43B Payments ie disallowed earlier year and
now allowed in memo
* Opening restatment for the current year
Reconcilation of
* VAT With Return and reconcile with Turnover
*Excise With ER-1 and reconcile with Turnover
*CST -CST Return and reconcile with Turnove
*TCS
-Reconcil with Scrap Sales Ledger and Apply
TCS %
TDS/TCS Deduction and payment analysis
* Quarterly Return submitted by the compay for E-TDS
* Analysis of payment with ledger and challan
** Reconcile the amount of TDS with Profit and loss
account for finding out Tds short deduction and non
deduction.
** Non deduction and short deduction gross expenses
to consider for disallowance under section 40(a) (i),
40(ia) etc
TAX AUDIT COVERAGE
Imporatant Aspects to be covered in IT Memo
Prepartion
* Give Proper Link of PAT from PL for the IT and 115JB
* Allow the Exp - Already disallowed in the previous year
Memo
** confirm whether they have paid during the year
** Prepare a list for 40A(3) Payments and give link to
Memo
** Give proper link to Loss on sale of assets (Add) and
Profit on Sale of Assets (Less) in the memo
** Give Proper link to 43A Adjustment for capital goods
fluctuation

** Proper Link to IT and Compay Act Depreciation for


workings
** Separte the Non Business income to other Heads-eg
Dividend
** Disllowable Exp List
Disallowable Expenses Analysis
* Donation
*TDS Interest *Fine and penalty
*Cash payment Exeeding Rs20000
Sec 40A(2) Excess payment than Normal payments
*Pooja Exp
*Under section 40(a) (Non Deduction of TDS)
*Sec 40(ia)a and nature of TDS disallowances
proviso to section 36(1)(iii)
of section 43B- Bonus,gratutity ,
Delay in payment of employee contribution in conection
with PF, ESI
Other Details for 3CD
**List of Payment under section 40A(2)(b).(Related
Party Payments)
40A(7)
**Priliminary Expens under Section 35D
115JB Calculation
** Calculation for unabsorbed dep and business loss
** Make correct provision for 115JB
provision
** Book Entries for 115JB MAT Provision and Credit
Adjustment
** Make correct provision for 115JB after considering PY
MAT cr u/s 115JJA
** Preparation of Form 29B for MAT calculation ( if MAT
applicable )
OTHERS
workings
** TDS Receivable working as per uploadable foramt .
** Assessment Status
ANNEXURE FOR 3CD
** Excise duty
** VAT Annexure
** ESI and PF Annexure
** TDS and TCS Annexure
** IT Depreciation

**
**
**
**

Stock Qty Annexure


Set off and Carried forward Annexure
Calculation of Ratio
Annexure I Part A,B

ANNEXURE FOR 3CEB (For TP)


* Parent company address ( Associated Enterprises )
* % of Share holding
* Details of RM imported and quantity wise break up
* Details of CG imported and quantity wise break up
* Details of Technical fee
* Details of Running Royalty exp to AE
* Reconcilation in Tally with Excell of the Associated
Enterprises
* Method of Arm Length Price
* Calculation of operating profit for adopt suitable
method of ALP
OTHER REQUIREMENTS
** Cash flow Statements ( if Company turnover >50
crore ) and Level I Enterprises
** Fund Flow Statement
** Details of Contingent Liabilities
** List of Assessment Pending with IT Department and
other Departments
**List of cases which are under Litigation
**Report of Internal Auditors
Requirements Regarding E-filing of Income Tax
Return and ROC Return
Signed Trial balance
Copy of PAN Card
Copy of TAN Card
Copy of Income Tax Challans
Copy of TDS Certificates
Copy Memorandum of Association
Copy of Incorporation Certificate
Auditors Appointment Letter
List of Directors along with complete address,
designation, and date of joining for the previous year
List of share holders along with complete address and
number of shares holds in %.
Digital Signature of Director of the Company
DIN of the Directors
List of transfer of shares as on the date
CIN number of the Company

Secretarial Requirements
Increase in Share Capital
Apppionment / Resignation of Director details
Co Audit Details
AGM/ EGM Details
Resoluation Copies
Charge Creation Details
Directors Remuneration details under sec 217(2A)
Document Evidence for
** Authorised capital
** Paid up Capital
** Present directors/ verification and Management
certificates
** Change of directors
**Present share holders/ changes and verification with
members register and Management certificate.
UNDER COMPANIES ACT 1956
PARTICULARS OF REGISTERS

SECTIO
N

Register of investments not held in companys name


49(7)
Register of Deposits
58A
Creation/modification/satisfaction of charge & keeping a 125,
record of the charges
135,
136,
138
Register of charges
143
Register of members
Index of members where their number is more than 50
Register and index of debenture holders
Foreign register (and a duplicate) of members and
debenture holders, if any
Copies of all returns u/s 159 & 160
Minute books containing minutes of the proceedings of
general meetings, board meeting & committees of the
board
Books of accounts

150
151
152
157
163
193

209(1)
(a) to
(c) &
Register of contracts, with companies and firms, in
297
which directors are interested giving details
299
Register of contracts with companies and firms in which 301
directors are interested directly or indirectly
Register of directors, managing directors, managers and 303
secretary
Register of directors shareholding
307

Register of appointment of directors or an associate as a 356 &


selling agent outside India of goods produced by the
357
company, and for supply of or rendering of service
Register of loans to companies under the same
management
Register of loans made, guarantees given or securities
provided to companies and investments in shares and
debentures of other companies

370

Information pursuant to Section 217(1)(e)

217(1)
(e)

Power and fuel consumption


ELECTRICITY:
a) Purchased Power (KWH)
Total Amount (Rs. In lacs)
Rate/KWH (Rs)
b) Own Generation (KWH)
Diesel Generator
KWH Per Litre of Diesel Oil
Cost/KWH (Rs.)
FURNACE OIL:
Quantity (Litre)
Amount (Rs. In Lacs)
Rate (Rs/litre)
Consumption per unit of Production
Technology Absorption Expenditure (Rs. In lacs)
Foreign Exchange Earnings (Rs. In Lacs)
Foreign Exchange Outgo (Rs. In Lacs)
Preparation of General Business profie as per SCH VI

372A
(5) &
(6)

REMARKS

AUDIT PROGRAMME FOR


PERIOD
Requirements Regarding CARO, 2003
1 Legal structure of the Entity
Is the entity a body corporate that is not a company?
Is the entity a banking or insurance company?
Is the company licensed to operate under section 25 of the
Act?
If any of the answers to the above questions is Yes, CARO is
not applicable

2 If entity is a private limited company


Is paid up capital and reserves less than or equal to 50 lakh
rupees, at any point of time during the year?
Whether the company does not have loan outstanding
exceeding 25 lakh rupees from any bank or financial
institution, at any point of time during the year?
Whether turnover*is less than or equal to 5 crore rupees at
any point of time during the year?
Turnover is net of sale tax % Excise duty if credited to
separate accounts, trade discounts and sales returns
If answers to all the questions above are yes, CARO is not
applicable ( CARO is applicable)

CARO POINTS AND CHECK LIST


1 Maintenance of of proper records of Fixed assets

2 Physical verification of stock

Loan to others ie companies firms other parties in sec 301 of


3 company act.

Internal control procedure for store , RM and Plant and


4 Machinery

5 Maintenance of Register u/s 301 ---

6 Public Deposit u/s 58A.

7 Internal Audit

Records maintenance of RM, Labour, other items in terms of


8 cost u/s 209(1)(d)

9 Statutory dues
PF
ESI
Income Tax
Wealth Tax
Service Tax
ED
TDS
VAT
ANY dispute in the above matter

### Accumulated lOss and cash loss during the audit

### Repayment of Financial due to the bank

### Loan granted by company by way of pledge

### Chit and nidhi and MF

### Dealing of shares , securities and debenture

Guarantee given by the company on behalf of others for


### taking loan

### Borrowing of Loan and utilization

### Fund utilization between long term and short term

Preferntial allotment of shares to parties or companies


### covered u/s 301

### Outstanding due for debunture

### Raising fund through public

### Material fraud

--- GAAP