Name of the Client: -----

ACCOUNTING YEAR: ----

Sr. No. Areas Checked By Yes Remark

1 OPENING BALANCES as on ________

1.1 Whether closing entries for last year have been passed
correctly?
1.2 Whether there are any changes in opening balances?
1.3 Whether there are any changes in groupings or heads

2 CASH BOOK – RECEIPTS & PAYMENT.

2. 1 Have you checked correctness of:
2. 1.1 Account Head/Account Code
2. 1. 2 Date
2. 1. 3 Amount
2. 1. 4 Name of party
2. 1. 5 Quantities where applicable.
2. 2 Are the vouchers signed by an authorized official?
2. 3 Are the vouchers properly supported by necessary
external evidence and/or Internal documentation?
2. 4 Does the transaction relate to the
Accounting year under audit?
2. 5 Have you undertaken physical cash verification?
2. 6 Have you ensured that cash book has a positive balance
on daily basis?
2. 7 Is there any incident of heavy cash balance or substantial
cash withdrawn? Check reasons there of.
2. 8 Whether there is any withdrawal/ payment above Rupees
20000/- in cash?
2. 8
Whether there is Postal Stamp on payment above 10000/-

3 BANK BOOK – RECEIPTS & PAYMENT.

3. 1 Check bank reconciliation statements with bank book
3. 2 Whether the balances in the reconciliation statement
match with actual balances as per statements?
3. 3 Check reconciliation entries with clearance in next
month’s bank statement?
3. 4 Whether there is any difference in the reconciliation?
3. 5 Whether there are long outstanding entries requiring
adjustments in the Reconciliation statements.
Whether there is any Cash deposi & witdrawl on same day
or with same parties on same day.
3. 6 Have you listed entries which are :
3. 6.1 Appearing in bank statement but not
3. 6.2 Appearing in bank book.
3. 7 Have you checked credit/debit for bank interest
3. 8 Have you checked contra entries for:
3. 8.1 Cash withdrawals and deposits and
3. 8.2 Ensured that they appear on some/same date.
3. 9 Are the payments properly supported by necessary
external Evidence and/or Internal documentation.

4 PURCHASES
4.1 Have you checked correctness of:
4.1.1 Date
4.1.2 Amount
4.1.3 Name of party
4.1.4 Rate per unit
Whether rate are inclusive or exclusive of tax
4.2 Does the transaction relate to the Accounting year under
audit.
4.3 Quantities in Invoices with the delivery Challans/ GRN
4.4 Are the invoices properly authorised and approved.
Check goods received is as per PO(if any)
Check whether invoice are serially
numbered(computerised numbered)
Check whether goods received are trf/accounted under
proper stock item at proper cost.
Check discount on cash purchase & interest paid on late
payment of bill
Vat / CST charged.
Check purchase return.
4.5 Whether supporting Goods Receipt Note (GRN/GIN) and
other necessary documentation obtained.
4.6 Whether there are any pending GRN to be entered in the
system?
4.7 Whether there are any missing GRN?
4.8 Have you checked succeeding year‘s vouchers to ensure
that no transaction relating to current year is recorded in
the succeeding year.
4.9 Whether the Purchase is made as per Purchase order and
the same is verified?
5. 10 Check whether debit note are passed for rejections and
whether proper reasons are mentioned?

5 SALES
5.1 Have you checked correctness of:
5.1.1 Date
5.1.2 Amount
5.1.3 Name of party
5.1.4 Quantity
5.2 Whether the sales are made against Purchase Order and
whether the same is verified?
5.3 Have you checked entries in stock Records.
check rate of discount
Interest charged if payment received after due date. ROI
& TDS.
Terms of payment/ receipt.
5.4 Please note the sales voucher number that are cancelled
and the reason for the same.

6 JOURNALS
6.1 Have you checked correctness of:
6.1.1 Account Head/Account Code
6.1.2 Date
6.1.3 Amount
6.1.4 Name of party
6.1.5 Are the vouchers properly authorised and supported by
necessary external evidence and/or Internal
documentation.
6.1.6 Does the transaction relate to the Accounting year under
audit.
6.1.7 Have you checked succeeding year‘s vouchers to ensure
that no transaction relating to current year is recorded in
the succeeding year.
6.2 Are all journal vouchers supported By necessary
evidence/explanation.
6.3 What is the nature of entries entered through Journal
Vouchers?
6.3.1 Purchases
6.3.2 Sales
6.3.3 TDS
6.3.4 Provisions
6.3.5 Debit Notes
6.3.6 Credit Notes
6.3.7 Year End/ closing entries

7 SALARY AND WAGES

7.1 Have you checked the salary summaries In the cash
book/bank book/journal.
7.2 Whether there are any outstanding advances for a long
period?
7.3 Check whether there are any advances in the name of
employees who have left the organization
7.4 Whether the advances are adjusted as per the rules?
Provision for Gratuity & leave encashment
Check ful & Final setlement o those employee who had
left.
7.5 Have you checked increments with
Approvals/agreements.
7.5 Have you checked statutory deductions for :-
1. Provident Fund
2. E.S.I.C.
3. Income Tax
4.Profession Tax
Any other Items
7.6 Have you correlated entries for payments of above
deductions.
7.7 Have you checked overtime payments with necessary
register and company’s rules.
7.8 Have you checked payments of Salary and wages
registers.
7.9 Have you checked calculations of Bonus with reference to
provisions of payments of Bonus Act/ Agreements.
7.1 Have you checked incentive payment with its basis.
Adhoc incentives to be listed.
7.11 Have you checked payments to contractors/casual
workers. Have statutory deductions been made
therefrom.

8 STOCK RECORD
8.1 Raw Material and Stores.
8.2 Have you checked opening stock From preceding year’s
inventories.
Check method of valuation
Stock reserve in case of branch trf.
8.3 Have you checked receipts of raw Materials while
checking purchases (GRN)
8.4 Have you checked issues with Material issues Note
8.5 Have you traced closing stock with Physical inventory
sheets.
8.6 Have receipts/issues been correlated with Debit
Notes/Credit Notes?
8.7 Have you correlated consumption With production
records?
8.8 Have you checked bifurcation of Indigenous and imported
raw mate?
8.9 Have you checked year and stock Inventories with
statements submitted to bank?
8. 10 Have you checked consumption with Excise and other
statutory records?
8.11 Have you checked materials given/Received to/from
others for processing, and reconciled with corresponding
receipt/dispatches of processed
Goods and processing charges?
8.12 Have slow-moving, damaged, and Obsolete items been
identified.
8.13 Have materials given/taken on loan Been properly
accounted and, has Proper record been maintained.

9 FINISHED GOODS
9.1 Have you checked opening stock From preceding years
inventory.
9.2 Have you checked daily production With reports/excise
records.
9.3 Have you correlated dispatches with Delivery challans
and excise records
9.4 Have you reconciled opening stock,Production, sales and
closing stock.
9.5 Has due care been taken to identify Slow-moving and/or
obsolete items.

10 CAPITALISATION OF ASSETS/
EXPENSES.
10.1 Have you checked correctness of:
10.1.1 Account Head/Account Code
10.1.2 Date
10.1.3 Amount
10.1.4 Name of party
10.1.5 Does the transaction relate to the Accounting year under
audit.
10.2 Have you checked all addition to Assets with account
heads and Approvals?
10.3 Have you checked capitalization of Expenses including
interest as per Guidelines of Institute of Chartered
Accountants of India – ICAI?
10.4 Have you checked sale/deletion of Assets and working of
profit/loss on the same?
10.5 Check whether the rate of Depreciation is as per the
Applicable Act.

11 LEDGER SCRUTINY
11.1 Have you scrutinized
1. General Ledger
2. Debtors Ledger
3. Creditors Ledger
4. Loan Ledger
5. Staff Loan Register
6. Advance Ledger
11.2 Is the break up of year end balance Available?
11.3 Have you scrutinized all expenses Accounts to ensure that
full year’s Expenses have been booked and no such
expenses has been booked which does not accrue during
the Year.
11.4 Have you scrutinized all revenue Accounts to ensure that
all revenues accruing during the year are accounted and
credit has not been taken for any revenue not accruing
during the year?
11.5 Have you scrutinized all asset accounts to ensure that all
assets of the Company have been properly accounted and
that the assets do not include any item which does not
represent assets of the company?
11.6 Have you scrutinized all liability accounts to ensure that
all liabilities are properly accounted and that liabilities
do not include any item which does not represent a
liability of the Company
11.7 Have you ascertained in case of Creditors ledger
1. Advance unadjusted for more than a reasonable time.

2. Non-payment of credit balances for more than a

reasonable time.
Advance paid is not treated as loan & and shall be
justified.
3. Any transaction which does not represent any
transaction of purchase/services and which is in the
nature of loans?
11.8 Have you ascertained in case of Debtors Ledger
1. Outstanding for more than 6 months and otherwise.
2. Outstanding exceeding a reasonable time to determine
doubtful debts.
Interst charged on late receipt & ROI.
Payment received is against which invoice.
Terms of receipt.
3. Any transaction which does not represent sale and
which is in nature of loan.
11.9 Have you scrutinized all expenses Account in
particular
1. Building repairs
2. Machinery repairs
3. Other repairs to check any item of capital nature
charged to revenue of vice-versa

12 STATUTORY PAYMENTS
12.1 Check whether all the statutory payments are made
within reasonable time?
a) Excise through ER 1
b) Service Tax
c) Income Tax
 d) TDS
e) Profession Tax of the Company
12.2 Check whether there is any delay in payment of
taxes?

13 OTHER RECORDS
13. 1 Have you checked the Fixed deposit registers, receipts
and applications
13. 2 Have you reviewed statutory records Required to be
maintained under the Companies Act, 1956. Any issues
Arising out of that may be noted.
13. 3 Have you enquired about :
1. Pending litigation
2. Pending tax litigation
3. Claims against the company not
acknowledged as debts
4. Other contingent liabilities.

ANNEXURE – 1

GUIDELINES FOR PROVISIONS FOR TAXES

1 Depreciation :- Section 32 read with section 43 (6) (c) and section 50 (2)
2 Withdrawal of Investment allowance :- 32A. Investment deposit section 32AB on sale of
3 Section 35 :- Expenditure, on Scientific Research including donations. Depreciation
4 Section 35A :- Expenditure on acquisition of Patent Right.
5 Section 35AB :- Technical know how expenditure.
6 Section 35D :- Amortisation of preliminary expenditure.
7 Section 37(2B) :- Advertisement Political Parties.
8 Advertisement expenses :- Gifts
9 Entertainment expenses.
10 Traveling Expenses :- rule 6D
11 Provisions for doubtful debts.
12 Section 40A(2)
13 Section 40A(3) :- Payments over Rs.20000/- Rule 6DD
14 Section 41(2)
15 Section 43B/36(1) (va)/2(24)(x)/36(1)(ii)
16 Interest payable under the interest on delayed payment to small scale and acilliary
17 Set off and carry forward of losses-section 71, 72 and 73.
18 Deduction under chapter VIA. Audit Reports under various caluses.
19 Section 234B re : interest on shortfall in advance tax.
20 Section 234C re : interest on deferment of advance tax.
21 Advance tax to be paid : for non companies
Minimum 30% before 15th September.
Further 30% before 15th December.
Balance 40% before 15th March.
22 Have major repair costs been capitalized in the accounts and treated as an expenses
22. 2 Has interest been capitalized and treated as expenses whilst computing taxable income.
23 Uniform accounting year for income tax – 31st March.
24 Section 44AB – Tax audit report to be attached with the return.