Verification and Valuation  of Other Fixed Assets – Wasting Asset – Fictitious  Asset

Verification and Valuation of Other  Fixed Assets Verification and valuation of other fixed nature assets are classified into two categories such as wasting assets and fictitious assets. The wasting assets are also known as depleting assets and it has both physical and legal existence. The fictitious asset does not have market value but it has legal […]

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Plant and Machinery – Auditor’s Duty,   Furniture, Fixtures and Fittings – Auditor’s Duty, Valuation Of Fixed Assets

Plant and Machinery A plant is an asset with a useful life of more than one year that is used in producing revenues in a business’s operations. Plant is recorded at cost and depreciation is reported during their useful life. Auditor’s Duty 1. When the machines are purchased in the current accounting period, the invoices […]

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Verification and Valuation  of Fixed Assets – Land  and  Buildings – Freehold Property – Leasehold Property – Auditor’s Duty

Verification and Valuation of Fixed Assets Fixed assets are a permanent nature with which the business is carried on and which are held for earning income and not for re-sale in the ordinary course of the business. It is a long-term tangible property that a firm owns and uses in its operations to generate income. […]

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Verification  and Valuation – Importanceof  Verification and  Valuation of Assets,     Differences Between  Verification and  Valuation, Classification  of Assets

Importance of Verification and Valuation of Assets Assets and liabilities are very important aspects of every business concerns. To show the exact financial position of the concern, one of the main work of an auditor is to verify the assets and liabilities. An auditor should satisfy himself about the actual existence of assets and liabilities […]

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Valuation – Meaning of Valuation, Definition of Valuation, Objectives of Valuation, Methods of Valuation, Auditor’s Duty  Regarding Verification

Valuation Meaning Valuation means finding out correct value of the assets on a particular date. It is an act of determining the value of assets and critical examination of these values on the basis of normally accepted accounting standard. Valuation of assets is to be made by the authorized officer and the duty of auditor […]

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Verification – Meaning of Verification, Definition of Verification, Objectives of Verification, Auditor’s  Duty Regarding  Verification

Verification Meaning Verification means the act of assuring the correctness of value of assets and liabilities in the organization. It refers to the examination of proof of title and their existence or confirmation of assets and liabilities on the date of Balance Sheet. It usually indicates verification of assets of any organization, which can be […]

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INTERNAL AUDIT – Scope (or) Functions of Internal Auditor, Advantages of Internal Audit, Disadvantages of Internal Audit

Scope (or) Functions of Internal Auditor 1. Evaluating of Accounting and Administrative Control: Internal auditing ensures effective and efficient system of accounting control, standard costing, budgetary control and all other administrative controls. 2. Protection of Assets: Internal auditing besides ensuring proper accounting and custody of companies asset’s it is concerned with the protection of the […]

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INTERNAL AUDIT – Introduction of Internal Audit, Meaning of Internal Audit, Definition of Internal Audit, Objectives of Internal Audit

INTERNAL AUDIT Introduction Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. Internal auditing is a catalyst for […]

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INTERNAL CONTROL – Auditor’s Duty in Evaluating the System of Internal Control, Differences between Internal Check and Internal Control

Auditor’s Duty in Evaluating the System of Internal Control 1. Understand the System: The auditor should understand the control system by discussing with personnel at various levels in the organisation. He should also refer to organisation charts and manuals for this purpose. 2. Determining the Reliability: The management installs and maintains an adequate internal control […]

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INTERNAL CONTROL – Kinds of Internal Control – Methods of Evaluating Internal Control System

Kinds of Internal Control The type of internal control system to be employed in an organization depends upon the requirements and nature of the business. Generally, there are three types of Internal Control in an organisation preventive control, detective control and corrective control. These types of controls are essential for an effective internal control system. […]

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INTERNAL CONTROL – Principles of Good Internal Control System

Principles of Good Internal Control System An effective or good system of internal control should have the following principles: 1. Well-designed Accounting System: Internal control should provide for a well designed accounting system. The f inancial and accounting activities must be separated. For example, person who is responsible in handling cash (cashier) and the person […]

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INTERNAL CONTROL – Advantages of Internal Control – Disadvantages of Internal Control

Advantages of Internal Control An audit control system can give the following advantages: 1. Detection of Errors and Frauds: Internal control systems are structured in such a way that work done by one employee in a process is checked by another without knowledge of the former. In such an environment, any fraud committed is brought […]

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INTERNAL CONTROL – Introduction of Internal control, Meaning of Internal control, Definition of Internal control, Objectives of Internal control

INTERNAL CONTROL Introduction of Internal control Internal control is the overall control environment established by management of an enterprise for effective and efficient monitoring and control of its operations. It aims at adherence to management policies, safeguarding of assets of the enterprise, proper accounting and record of the business transactions. Internal check and internal control […]

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Internal Check Trading Transactions – Internal Check-Sales Returns, Internal Check-Sales

Internal Check-Sales Sales are the most important source of revenue in a business and hence the possibilities of errors and frauds taking place are greater. Frauds maybe committed in the following ways: • Sales may be omitted from recording in the sales book. • Fictitious sales may be accounted. • Sale of fixed assets may […]

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Internal Check Trading Transactions – Internal Check Purchases – Internal Check Purchase Returns – Auditing

Internal Check Purchases The following system of internal check may be adopted as regards purchases. 1. A purchase department should supervise and control the entire purchase transactions of the organisation. 2. The procedure for purchases should start with issuing purchase requisition, making enquiry about the terms and conditions of purchases from different suppliers. 3. Purchase […]

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Internal checks – Wages – Maintenance of Wages Records, Preparation of Wage Sheet, Payment of Wages, Auditing

Internal checks- Wages Wages are very important item of expenditure. The system of internal check for wages should be devised in a planned and careful manner. There are great possibilities of frauds in a concern employing a large number of Time workers. A sound system of internal check for payment of wages may avoid errors […]

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Internal Check – Cash Transactions, Internal Check-Cash Receipts, Internal Check-Cash Payments

Internal Check – Cash Transactions Checking of all cash transactions should be given utmost importance because employees tend to involve in fraudulent activities by misappropriating cash and manipulating accounts in an organistion. Hence, the auditor should verify the system of internal check in operation with regard to cash receipts and cash payments, which is explained […]

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Internal Check – Objectives of Internal Check, Advantages of Internal Check, Disadvantages of Internal Check, Duties of an auditor with Regards to Internal Check System

Objectives of Internal Check The objectives of internal check are as follows: 1. Early Detection of Errors and Frauds: The main objective of internal check is to detect and prevent the occurrence of errors and frauds at an early stage. This is possible as the work of each and every person is independently checked 2. […]

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INTERNAL CHECK – Introduction Of Internal Check, Meaning Of Internal Check, Definition Of Internal Check, Principles (or) Features of Good Internal Check System

INTERNAL CHECK Introduction In business concerns there are chances of misapporopriation and manipulation of accounts. In order to overcome such irregularities and to prevent or minimise the occurrence of errors and frauds, a checking system is designed to have a check on the irregularities. Such a check which operates continuously as part of the routine […]

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