Audit Programme and Checklists For Completion Of Audit

AUDIT PROGRAMME

An auditor prepares a plan after the selection of senior and junior staffs allocating the jobs to them,
mentioning when to start, how to do the work etc. This plan is known as audit program. An auditor
should include all the procedures in written form, objectives of each sector and all the directions
which are to be given to the staffs which helps to control their works and helps to implement such
programs into action.

Things Which Are To Be Included In Audit Programs

Audit program is a detailed program which helps to guide and control the junior staffs. Audit
program classifies the work of junior staffs which helps to complete the audit task without leaving
any points. Audit program is prepared all the programs, nature and size of business, internal check
and internal control.

Following are the facts regarding audit program:

 Audit program is a detailed work plan which includes the time of doing work and how to
do the works.
 Audit program includes audit procedures
 Audit program estimates the duration to complete the audit task
 Senior staffs prepare audit program to junior staffs on the basis of nature of business
 Generally accepted points are included in the audit program
 Junior staffs put tick marks in the completed tasks
 Detail information of works of all the junior staffs like audit of bank/ cash book, purchase
book, sales book etc.
 Auditor should prepare audit program considering the nature of client.
 Separate list of work assigned to assistant should be prepared by the auditor.
 Audit program should fix the time period to complete jib assigned to the assistants.
 Assistant should sign after the completion of his/her job.

After the introduction of compulsory process of Peer Review into mechanism for categorized
Practicing Unit it is one of the essential parts for clear Peer Review Report.

As the Audit period is in peak now to facilitate audit procedures the following article on Audit
Programme and various checklists with reference to relevant matters will stand handy and useful to
one and all.

In my earlier share on Checklist on Working Papers with reference to Standards on Auditing i.e.
general checklist of audit analysis/documentations/evidence also facilitate easy understanding on
documentation.

Reference link:
http://taxguru.in/company-law/general-checklist-audit-analysis-documentationsevidences.html

1 CA DURGESH KABRA Email Id : [email protected] Source- www.taxguru.in

 SUMMARY POINTS OF AUDIT PROGRAMME:
1. Appointment letter and the relevant resolution for the appointment.
2. Terms of the engagement including reports required and manner of determining audit
fees.
3. System of book-keeping and the list of the books of accounts maintained by the entity.
4. Particulars of the promoters,Directors and their powers.
5. Names of persons who write the books of accounts and other authorised officers
6. Memorandum and Articles of Association, Partnership Deed as applicable.
7. Details of business of client and its accounting systems by reviewing and assessing
information on:
 nature of business of the entity
 Internal control system including owner/manager controls.
8. Statement of Profit and Loss account, Balance sheet, Auditors’ and Directors' reports of
the previous year and the reports of internal auditor
9. Analytical review procedures in order to :
 identify areas of accounts which are important because of their size
 highlight unusual or unexpected figures or relationships in the accounts
 design audit test which concentrates on important and unusual items
 obtain sufficient audit assurance to allow the reduction or even elimination of
detailed testing in some areas
10. Assessment of audit risk by using the professional judgement and audit procedures to
ensure that it is reduced to an acceptable low level
11. Preliminary estimates of materiality for the audit as a whole.
12. Class of accounting transactions which are relevant and to decide the type of testing and
samples.
13. Selection of representative samples.
14. Compliance tests to evaluate the reliability of key controls.
15. Material weaknesses in the operation of key controls of management.
16. Performance of analytical review procedures, substantive tests of detail to obtain
sufficient, relevant and reliable audit evidence for each audit objective.
17. Fundamental accounting assumptions, i.e,. consistency, going concern and accrual basis
of accounting are followed by the client in the preparation and presentation of financial
statements.
18. Disclosure of change in an accounting policy which has a material effect.
19. Audit report is received from all the Branch Auditors and any reservation made by the
branch auditor is appropriately dealt with in the finalisation of accounts.
20. Working papers contain all audit evidence, and are cross-referenced.
21. Summary of work done, problems, important judgements and audit conclusions.
22. Review by Senior in charge of work of all assistants, audit programme followed and
work performed as per time schedule.
23. Updation of audit working papers including permanent records.
24. Review of unadjusted errors to determine whether individual and aggregate effect is
material.
25. Compliance with legal and regulatory requirements.Compliance with all mandatory
Accounting Standards issued by the Institute.
26. Post balance sheet events.
27. Formulation of draft audit opinion.
28. Comparison of budgeted time to actual and reasons for major variations.
29. Complete staff evaluation forms.
30. Planning of next year's audit.

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 2

Name of Company :

Period of Audit :

Audit Staff :

Review By :

Audit conducted on :

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 3

1.) Documentation to be kept on File.
A) Permanent Audit Papers:
It shall contain papers related to engagement, constitution, background and
organizational structure, Systems (For larger audits this section could be held on a
separate file) Contracts, Agreements, Minutes, Group, Other professional advisor's list
and other Miscellaneous.

Verified Reviewed By Remark/ Wkg

Particulars By Note No.
Financial Statements (P.Y)
Auditor’s Report (P.Y)
Memorandum and Article of Association. (For
Changes, If applicable)
Partnership Deed
Act, Regulation, bye-laws, trust deeds, as
applicable under which the entity functions
Nature of Business and History
Ownership Profile
Organization Chart, if applicable.
Financial Delegation Power, if applicable.
Internal Control System, if applicable
Audit Acceptance Letter
Correspondence with Previous Auditor, as
required
Background and organisation structure
 Registered office details
 Management structure including
organisation chart
 Industry specification with reference to
client's size, economic factors affecting
the industry, seasonal fluctuations and
demands
 Facility locations, plant capacity, owned
or leased, age, capital expenditure
budget, etc. Products specifying diverse
range alongwith classification
 Purchase volumes, main suppliers,
policies
 Inventory norms, inventory levels
during last five years and related ratios.
 Sales volumes including exports, main
customers, methods of distribution,
pricing policies, credit policy
 Personnel showing numbers, analyses
by departments or function, method of
remuneration, contracts, union

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 4

 agreements, HR policy
 Copy of audited financial statement for
previous five years, if it exist.
 Study and evaluation of internal
controls related to
 Significant audit observations of past
 Statistical information showing 5 years
comparison of performance indicators
(major accounting ratios) Industry
statistics

Systems:
 Details of methods of accounting
including cost
 accounting, flowcharts, specimens of
accounting documents, code structure
and list of accounting records
 EDP-systems security, source code
security, authorization and back up
policy

Contracts/Arrangements:
 Leases agreements photocopies/
extracts of the same
 Title deeds inspected annually by
auditor
 Royalty agreements
 Minutes of continuing importance such
as Directors' meeting, Members'
meeting

Group structure –
 subsidiaries, associates
Joint venture
 Names of auditors

Professional Advisor’s List

 Bankers
 Solicitors
 Investment Analysts
 Registrars
 Credit Rating Agency

Details of other client information of permanent

nature

B) Regular Working Papers to be taken from Management and Audit File shall contain:

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 5

 Verified By Reviewed By Remark/ Wkg
Particulars Note No.
Letter of Appointment
Representation from Management
Stock as on the date of Balance sheet
Fixed Asset as on the date of Balance
sheet
Declaration from Directors for No
Disqualification
Notice of Interested Director Under
Section 299 of Company Act, if any.
Confirmation from Debtors.
Confirmation from Creditors.
Certificate u/s 40A(3)
Certificate u/s 269SS & 269T
Balance Confirmation from Banks with
Reconciliation.
Discussion on Notes to Accounts with
Management.
Final - Draft and Signed Financial
Statement
Reports and final papers
 Copies of all draft and final reports
issued to client
 Correspondence with other
auditors and experts
 Comments received from client
and letter of representation
 Observations on accounts and
points carried forward to next year
 Final journal entries
 Company accounts checklist -
directors' report
 Audit completion report

Audit Plan
 Planning programme
 Time and cost summary
 Briefing notes
 Copy of planning letter to client
 Points carried forward from
previous year

Balance sheet, statement of profit and

loss account and cash flow statement
audit – systems testing
 Lead schedules/ Notes
 Audit programmes
 Detailed working papers and

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 6

 conclusions
 Company accounts and
accounting standard , if any,
checklists
 Queries raised and explanations
received
 Third party confirmations and
certificates
 Weaknesses identified and copy
of letter of weaknesses sent to
client
 Schedules/ Notes
 Trial balance
 Cross-reference to audit work
performed
 Performance indicators collected
which have a bearing on the
extent, nature, timing of
substantive tests

2. VERIFICATION OF RECORD FOR TAX AUDIT U/S_44AB

Sr.no. Particulars Verified By

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 7

1 Cash Book

2 Bank Book

3 Journal

4 Ledger

5 Purchase Register

6 Sales Register

7 Stock Register

8 Opening Balance Sheet Checked with Ledger

9 Closing Balance Sheet Checked with Ledger

10 Bank Reconciliation kept on record

11 Closing Stock is certified Kept on record.

12 Check list of Tax Audit

13 Tax Audit Annexure verified with Records. ANNEXURE NO.S: as below

A B C D E F G H I J K L M

N O P Q R S T U V W X A-I A-II

Tax Audit Report Signed by {RBS} {URS} {DATE} / /20

Backup of Tally or any other Accounting Software –

Tally Version: 7.2 / 9 / ERP

Tally File No. _________________________ Password if any_____________________

Books of Accounts Checked By: ____________________

Verified By: ____________________________________

3. Audit Programme

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 8

The Section deals with points that must be considered enquired and recorded in designing an audit
plan.
Client’s Name :
Accounting Year :
1 Registered Office

2 Corporate Office

3 Factories

4 Branches

5 Sales Depot

6 Name & Residential address of Directors, Managing

Directors, Accountants Managers, and Financial
Controllers, if any.

7 List of books and other records maintained

8 Associate concerns: Name of Dealings

Subsidiaries
Companies under same Management-Section 370
Name of the audit person-in-charge
Name of Assistants/Articled Clerks

9 Review of permanent file and previous year’s file

10 Special matters to be considered [based on points

raised in the previous year]

11 Computerization

A Before starting the audit, ascertain whether the

accounts are computerized. If so whether
computerization is for the whole of the
accounts / stores/ sales / purchases etc. where
they are partially computerized, indicate which
departments are computerized.

B In respect of departments that are computerized.

i Study the system of computerization
ii Ask for the code list and study the system of
coding
Prepared By: Reviewed By:

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 9

 4. BASIC AUDIT PROGRAMME
Client’s Name :
Accounting Year :

This Programme is a specimen programme, in the course of audit the programme will have to be
drawn up considering the size and nature of business of each client and based on weakness of
internal control.
Sr. Particulars Checked Time % Extent of Test
No by Taken Checkin Check eg-
. g monthly/qtrly/
Half yrly/every
10th voucher,
etc.
1 Opening Balance
2 Cash Book vouching
3 Bank Book Vouching
4 Sales register/Sales Journal vouching
5 Purchase register/purchase Journal
vouching
6 Credit note and Debit note register
vouching.
Any other special register based on the
nature of business and practices followed
by the company
7 Journal vouching
8 Salary and Wages
9 Stock Records/Levels/Physical
Verification
10 Checking for outstanding expenses and
prepaid expenses
11 Verification of Fixed Assets and checking
of Depreciation statement
12 Provision for Taxation/Compare with
completed assessment order/s
13 Valuation of Inventories
Shortages Basis
14 Checking of notes and quantification
15 Minutes Books of
a. Board Meetings
b. General Meetings
c. Committee Meetings, if any
16 Statutory Registers Compliance
17 Inspection of files related to law suits,
legal matters, taxation, excise, octroi,
frauds, etc.
18 Loans & Guarantees
19 Transaction with related parties
Prepared By: Reviewed by:

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 10

 5. GENERAL CHECKLIST FOR AUDIT

Particulars Y/N/NA Remarks

1 Opening Balance
1.1 Have you checked opening Balances of:
a General Ledger
b Debtors Ledger
c Creditors Ledger
d Creditors Ledger
e Other subsidiary Ledger
2 Vouching
2.1 Voucher includes the following
a Receipt and Payment of cash Book and Bank
Book including Petty cash Book
b Sales
c Purchases
d Credit Note
e Debit Note
f Register of hundi paper
h Any other book/register of prime entries,
salary and wages register, special register like
trip register, ticket booking register, job register
based on the nature of business
2.3 Have you checked Correctness of
a Account head/account code
b Date
c Amount
d Name of Party
e Quantities and rates where applicable
2.4 Any the vouchers properly authorized and
supported by necessary External evidence
and/or internal documentation?
2.5 Does the transaction relate to the accounting
year under audit?
2.6 Have you checked totals/sub-totals?
2.7 Have you made list of items remaining un-
ticked after your vouching is complete?
3. Cash/ Bank Book – Receipts and Payments
3.1 Have you checked whether cash collected is
banked at reasonable intervals?
3.2 Have you checked balances at the end of
different days if cashbook is monthly balanced
and ensured that cashbook does not have any
negative balance?
3.3 A Is there any incident of heavy cash balance,
substantial cash withdrawals
Check reasons thereof
B Verify with the rough/cashier cash book
3.4 Have you checked journal entries for tracing

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 11

 summaries wherever required?
3.5 Have you checked journal entries for tracing
summaries wherever required?
3.6 Have you checked bank reconciliation
statement
- Outdated cheques to be reversed?
3.7 Have you checked reconciliation entries with
clearance in next month’s Bank Statement?
3.8 Have you listed entries, which are appearing in
bank statement but not appearing in bankbook?
3.9 Have you checked credit/debit for bank
interest?
3.10 Have you checked contra entries for cash
withdrawals and deposits and ensured that
they appear on same date.
4. Sales register
4.1 Have you checked quantities as per delivery
challans with invoices?
4.2 Have you checked entries in stock records?
4.3 Have you checked rates with price list and
ascertained reasons for variations?
4.4 Have you made a list of un-ticked items?
4.5 Have you tallied sales with sales tax returns?
4.6 Have you reconciled sales tax collections with
payments and transfer of the balance to
appropriate accounts?
4.7 Any transaction with related party, whether it
is at fair prices and genuine transaction?
5. Purchases Register
5.1 Have your checked delivery challans quantity
with invoices?
5.2 Have you checked rates wherever orders have
been issued? Verify quality Control approval
memo?
5.3 A Have you checked quantity in to stock records?
B Have you made a list of purchase invoices for
which are no corresponding entries in stock
records?
C All stocks are recorded as either purchases or
from opening stock, goods return have been
adjusted?
5.4 Have you verified that purchases are correctly
classified as per the accounting code?
5.5 Have you ensured that all goods received notes
are correlated with purchase invoices?
5.6 Any transaction with related party, whether it
is at fair prices and genuine transaction?
6 Journal Vouching
6.1 Have you checked why debit balances have
been written off or credit balance written back?

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 12

6.2 Have you checked account head on journal
vouchers?
6.3 Are there any entries relating to earlier or
subsequent period?
6.4 Have you made a list of un-ticked items?
6.5 Are all journal vouchers verified with necessary
evidence/explanation/workings?
6.6 Are all vouchers verified authorized?
7 Salary and Wages.
7.1 Have you checked salary summaries in the cash
book/bank book/journal?
7.3 Have you checked deletions/increments with,
with personnel files, approvals/agreements?
7.4 A Have you checked statutory deductions for?
Provident Fund
ESIC
Income Tax
Professional Tax
Advances
Any other items as applicable
7.4 B Have you correlated entries for payments of
above deductions?
7.5 Have you checked overtime payments with
necessary register and company’s rules?
7.6 Have you checked payments of salary and
wages with registers?
7.7 Have you checked calculation of bonus with
reference to provisions of payments of Bonus
Act/Agreement?
7.8 Have you checked incentive payment with its
basis? Ad hoc incentives to be listed.
7.9 Have you checked working of payments to
contractors/casual workers? Have statutory
deductions been made there from
8 Stock Records
8.1.1 Raw material, Packing material and Stores..
8.1.2 Have you checked opening stock from
preceding year’s inventories?
8.1.3 Have you checked receipts of raw materials
while checking purchase,[GRN]
8.1.4 Have you treed closing stock with physical
inventory sheets?
8.1.5 Have you traced closing stock with physical
inventory sheets?
8.1.6 Have receipts/issues been correlated with debit
notes/credit notes?
8.1.7 Have you correlated consumption with
production records?

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 13

8.1.8 Have you checked materials given/received
to/from others for processing, and reconciled
with corresponding receipt/dispatches of
processed goods and processing charges.
8.1.9 Check the gatekeeper’s outward register for
items other than sales and reconcile with the
final entries for billing or returns.
8.1.10 Have slow-moving damaged, and obsolete
items been identified.
8.1.11 Have Materials given/taken on loan been
property accounted and, has proper record
been maintained.
8.2.1 Works in Process/Finished Goods.
8.2.2 Have you checked opening stock from
preceding year’s inventory.
8.2.3 Have you checked daily production with
reports/Excise records?
8.2.4 Reconciliation with excise records.
Have you correlated dispatches with delivery
challans, and excise records?
8.2.5 Have you reconciled opening stock,
production, sales and closing stock?
8.2.6 Has due care been taken to identify slow-
moving and/ or obsolete items.
9. Capitalisation of Assets / Expenses
9.1 Have you checked all addition to assets with
account heads and approvals?
9.2 Have you verified that all expenses pertaining
to assets under construction/installation are
properly and correctly debited to Capital WIP?

9.3 Have you verified the transfer entries fro CWIP

to proper assets head on its
completion/installation?
10 Posting [in case manual accounting]
10.1.1 Have you checked postings from cashbook,
bankbook, sales register, purchase register,
debit note/ credit note register, journal and all
other principal books?
10.1.2 Have you checked summarized posting of
sales/ purchase register and debit note/credit
register/petty cash book/expense register?

10.1.3. Have you listed out un-ticked items?

Prepared By: Reviewed by:

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 14

 Checklist: STATEMENT OF PROFIT AND LOSS

Remarks
Y/N/NA
1 PROFIT AND LOSS
A SALES
1 Have goods delivered been invoiced?
2 Examine sales booked immediately before the year-
end with dispatch notes/transport receipts/proof of
service rendered?
3 Have you checked that such sales are not reversed of
goods refund immediately at the beginning of the
next year? If so have they been reduced from sales?
4 Have goods invoiced close to the year-end been
actually delivered? Scrutinize dates of dispatch notes
prepared immediately after year-end.
5 Has provision been made for materials still to be
supplied where invoice has been raised for the entire
supply?
6 Have sales returns been recorded – credit notes
issued and included in inventory?
7 Have rebates and discounts been adjusted?
8 In case of long term contracts:
a What is the basis of accounting profit/Loss?
b Have provisions for losses been made if
anticipated. If so on what basis.
9 Have you verified that Excise duty and sales tax have
been shown as a deduction from Gross Turnover
wherever the Turnover includes Excise/Sales Tax?
10 Have you seen that goods sent on consignment and
internal dispatches to branches, depots or agencies
are not included in sale?
11 Have you ensured that the value of the Turnover
excluded ancillary and extra charges like packing,
freight commission etc.?
12 Have you ensured that discounts given for prompt
payment and rebates of a special, rather than a
general nature are accounted for separately?
13 Have you ensured that trade discounts and ordinary
rebates are adjusted against the value of the turnover?

B PURCHASES

14 Have you satisfied yourself that all materials

included in stock been recorded as purchases?
15 Have goods refund been adjusted and excluded from
stock?
16 Have all claims for defective materials been adjusted?

C DEPRECIATION / AMORTIZATION

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 15

 17 Has method of charging depreciation been disclosed
in accounts?
18 Has Depreciation followed as per Schedule II or IT
Act, as applicable?
19 Is depreciation on additions and deletions pro rata?
State the basis of verifying dates for additions/
deletions of fixed assets?
20 Have you verified the basis of amortization of
intangible assets is in accordance with AS-26?
21 Have you verified that the leasehold land has been
amortised over the period of the lease?
22 Have you obtained certificate for extra shift working?
23 Where any depreciable assets is disposed of,
discarded, demolished or destroyed, the net surplus
or deficiency, if material, has been disclosed
separately?
D GENERAL

24 Have accounts been prepared on accrual basis and as per

AS-9?
25 Have all outstanding and known liabilities been provide?
26 Have following been provided for:
a Gratuity – If not, note on accounts?
b Bonus – if not, note on accounts?
c Retirement Benefits- If not, note on accounts?
d Leave Encashment – if not, note on accounts?
27 What is the basis for providing gratuity? Append a note.
28 Has the entity accounted for all the known incomes
accruing during the year?
29 Has income been accrued for materials processed but not
delivered/undelivered?
30 Has income received in advance been properly adjusted?
31 Have you compared each item of accounts with previous
years and inquired into major variations?
32 Have you reviewed percentage of scrap, by-products and
waste generated with production and compared with
previous year?
33 What is the basis of accounting for claims:
a Made by the company
b Made on the company
34 Is a register for claims maintained? If not, how is control
on claims exercised?
35 Amortisation of
a Preliminary expenses
b Share issue expenses
c Debenture issue expenses
d Voluntary retirement scheme payments
e Others

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 16

36 Have you scrutinized all expenses accounts in particulars
a Building repairs
b Machinery repairs
c Other repairs
d Stores
Check any item of capital nature charged to revenue or
vice versa?

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 17

 5.1 Checklist: FINAL REVIEW

Particulars
Remarks Y/N/NA
1 Have you ensured that the all checklists on audit and
financial statement review have been completed and
initialed by the person entrusted with the work?
2 Have the following fundamental accounting concepts
been followed.
a Going-Concern [continuity of business of the company
in succeeding years]
B Accrual [Income and expenses accruing during the
year under review]
C Consistency [same basis of accounting to be followed
consistently]
D Prudence [future losses to be ascertained and
accounted for whereas future gains to be deferred]
been adhered to?
3 If not, please give particulars of departures there from
4 Compliance with Mandatory Accounting Standards and
Assurance Standards:
Have you filled up the Control Sheet for the Accounting
Standard and placed on file?
5 Whether all the requirements of the above standard have
been adhered to by the entity? If no, draft reports have to
be suitably qualified?
6 Have other checklists on Statutory Registers Companies
Act, Compliance checklists are completed?
7 Have all the documents as per the documentation
checklist been placed on the working papers file?
8 Have you verified that the Peer Review checklist has been
completed and placed on the file?
9 Have the institute’s Statements and Guidance notes as
applicable been considered and fully complied with?
10 Have you perused and noted important points arising
from reports obtained by the company internally and
external agencies such internal auditors, concurrent audits
etc.
11 Has the partner critically examined ratios as per the
checklists?

CHECKED BY: REVIEWED BY:

6. Audit Finalisation

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 18

Particulars Verified By Reviewed By Remark/ Wkg Note
No.
Verification of Trial Balance
Verification of TB and its Grouping
and Compilation
Verification of Balance Sheet
Schedule with its Grouping
/Compilation
Preparation of Notes To Accounts
Preparation of Company Audit
Report
Preparation of Tax Audit Report

7. Compliance of Various Laws

Verified Reviewed Remark/ Wkg Note No.

Particulars By By
Excise Record
Cost Audit Report
Previous Yr Tax Audit Report
Internal Auditors Report its Compliance by
the Management.
Service Tax Act
Central Excise Act
MVAT Act 2002
Central Sales Tax
Income Tax Act
Provident Fund Act
Professional Tax Act
Company Laws
SEBI’s Requirement

8. Compliance of Institutes Pronouncements

Verified By Reviewed Remark/ Wkg
Particulars By Note No.

Accounting Standards
Auditing and Assurance Standards
Guidance Notes
Clarifications
Company Laws Compliance
CARO 2015
Schedule III Compliance
Schedule II Compliances

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 19

 9. ACCOUNTING STANDARDS CHECKLIST CONTROL SHEET
OBJECTIVE: The objective of this checklist is to determine whether the accounts of the client have
been prepared in accordance with the Accounting Standards. Any non-compliance with the
standard[s] should be highlighted.

Sr.No. Particulars Compliance Remarks

Y/N/NA
1 Disclosure of Accounting Policies
2 Valuation of Inventory
3 Cash Flow Statement
4 Contingencies & Events occurring after the
Balance Sheet date [Revised]
5 Net Profit or Loss for the period, extraordinary
items & changes in accounting Policies

6 Depreciation Accounting
7 Accounting for construction contracts
8 Accounting for Research & Development
Standard requires disclosure of R &D
expenditure]
9 Revenue Recognition
10 Accounting for Fixed Asses
11 Accounting for the effects of changes in foreign
exchange rates
12 Accounting for Government grants
13 Accounting for investments
14 Accounting for amalgamation
15 Accounting for retirement benefits in the
financial statements of employers
16 Borrowing Costs
17 Segmental Reporting
18 Related Party Transactions
19 Accounting for Leases
20 Earning per share
21 Consolidated Financial Statement
22 Accounting for taxes on income
23 Accounting for investments in associates in
consolidated financial statement
24 Discontinuing operations from 1-4-2004/05
25 Interim Financial Reporting
26 Intangible Assets
27 Financial Reporting of interests in Joint
Ventures
28 Impairment of assets
29 Provisions, Contingent liabilities and
Contingent assets
Prepared By: Reviewed by:

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 20

 9.1. CHECKLIST: AS 1 – DISCLOSURE OF ACCOUNTING POLICIES

Particulars Y/N Remarks

1 Is there a list of all significant policies adopted by the
auditee?
2 If yes, are all the relevant areas listed below are
adequately covered, so far applicable?
a Basis for preparation of financial statements
b Method of accounting
c Valuation of fixed assets
d Treatment of goodwill
e Treatment of Impairment of Assets
f Method of depreciation, depletion and amortisation
g Treatment of expenditure during construction
h Valuation of Investments
i Valuation of Inventories
j Research and Development
k Deferred Revenue Expenditure
l Receivables and Liabilities
m Revenue Recognition
n Conversion of translation of foreign currency item
o Disclosure o events subsequent to the balance sheet
date
p Treatment of Borrowings cost
q Treatment of Lease Accounting
r Provision for Taxes on Income, both current and
deferred
s Treatment of Prior Period items
t Treatment of Miscellaneous Expenses not written off
U Excise and Customs Duty: Definition of turnover
V Treatment of retirement benefits
W Recognition of Profit on Long-item contracts
X Treatment of contingent liabilities

3. If there is a change in accounting Policies whether it has

been disclose separately with quantification of its
impact on the financial statements?

Prepared By: Reviewed by:

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 21

Checklist Specific for Companies Act 2013 – Compliances

Sr Particulars Yes/No/NA Remarks

No

1. Share Capital - Changes in Equity

Bonus and/or right issues made as
per required new procedure
2. Loan from other than body
corporate and directors
Verify for Deposits Rules Followed
Exemption Applicable
3. Internal Financial Control – Policy
by management
4. Directors and KMP
Appointment
Disqualification
Remuneration Rules and Limits –
Schedule V applicability
Independent Director
Woman Director
Declaration from Directors/KMP –
Loans and or other companies
appointment and interest, as
applicable
Committees
5. Loans, guarantees and investments
u/s 186
Within limit
Exceeds – Resolution as required
6. Related Party
Nature of Relationship
Contracts in compliance provisions
and rules
Relevant AS followed (AS-18)
7. CARO
Applicability
Deviation of clause to be reported, if
any
8. Consolidation
Whether applicable or not – SMC/
Non SMC and/ or other than Small
Company
Layers of Subsidiaries – Operating
and others
Relevant Accounting Standards
followed(AS-21,23,27)

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 Separate section containing a report
on performance and financial
position of each of subsidiaries,
associates & JVs included in the
Consolidated FS of the Co.
9. Cash Flow Statement
Whether applicable or not – SMC/
Non SMC and/ or other than Small
Company
10. Risk Management
Development of Policy for the same
Implementation of the same
11. Women Safety
Sexual Harassment of Women at
Workplace (Prevention, prohibition
& redressal) Act, 2013
12. Corporate Social Responsibility
CSR policy
Committee
Implementation as per rules
13. Vigil Mechanism
14. Extract of Annual Return – MGT 9
(Please refer to Directors report
format)
15. Depreciation
Schedule II followed
Useful Life deviation – Advice
supported
Change in Method if any
incorporated in financial Statement
16. Corporate Governance and SEBI
requirements

Note: Need to check on the various forms required to be filed with ROC in respective event and
regular compliances required.

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 23

 CHECKLIST: SA 230 DOCUMENTS

Audit Procedure Y/N Remarks

1 Whether audit working papers give an overall understanding
of the:
a Audit Procedures performed and
b The extent of checking done?

2. Do the audit working papers include

a Audit Plan prepared
b Nature, timing and extent of audit procedures followed:
c Evidence obtained and conclusions drawn there from?

3 Has the auditor prepared/up dated the permanent audit file

for recurring audits?

4 Whether Current Audit File[ working Papers File] including

the following:
a Correspondence relating to acceptance of annual
appointment
b Copy of Draft Financial Statements and signed Financial
Statements.
c Copies of all draft and final reports issued to client.
d Comments received from client.
e Observation on accounts and points carried forward to
next year.
f Important final Journal entries
g Audit Completion report
h Important matters in minutes of Board Meetings, Audit
Committee and General Meetings.
I Audit Planning
J Time and Cost Summary
K Briefing to Staff notes
L Copy of Planning letter to Client
m Points from previous year
n Balance sheet, Profit and Loss account and Cash Flow
statement.
o Audit systems testing working papers such as
i Lead Schedules
ii Audit Programmes
iii Conclusions
iv Checklists
v Queries raised & explanations received
vi Third Party Confirmations and certificates
vi Weaknesses identified and copy of letter of
i weaknesses to client.
vi Trial Balance
ii

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 Ix Gross referencing between the backup schedules,
lead schedules, and the accounts
P Analysis of transactions and balances [Notes on
important points and decisions taken during scrutiny of
accounts]
Q Evidence that, work performed by assistants has been
reviewed.
r Copies of communication with the other auditors experts
and third parties,
s Letter of representations, Confirmation
t Significant matters on which the auditor has made
Judgments and drawn conclusions

5 Does the Permanent Audit File include?

a Legal Organisational and management structure of the
firm
b Memorandum/Articles of Association
c Acts and regulations [in case of Statutory Corporations]
d Nature and History of the Business
e Profile of Ownership
f Registered Office Details
g Industry specifications with reference to size and
economic factors affecting the industry.
h Purchases volumes, policies and major suppliers
I Sales Volumes, policies and major buyers
J Inventory norms, levels and related ratios
K Personnel details – numbers, method of remuneration,
union agreements, contracts, HR policy.
l Study and evaluation of internal controls related to
accounting systems.
m Significant audit observations of the past
N Details of method of accounting including cost
accounting flow charts specimens of accounting
documents code structure and list of accounting records.
O EDP- system security, source code security,
authorization and backup policy.
P Lease agreements photocopies/extracts of the same.
Q Title deeds inspected annually by auditor
R Royalty Agreement
S Minutes of continuing importance of Director’s meeting,
members’ meeting.
T Group structure subsidiaries, associates, JVs, auditors
names
U Names of bankers, solicitors, investment Analysts,
Registers credit rating.
V Important legal documents, agreements and minutes
W Audited financial statements of last 5 years
X Analysis of significant ratios, performance indicators and
industry statistics

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 25

 Y Management letters issued by us
Z Record of communication with retiring auditor

6 Any other information of a permanent nature.

Prepared By: Reviewed by:

CHECKLIST FOR AUDIT---------------------------------------------------------------------- 26