Page 278 - DCOM204_AUDITING_THEORY

Auditing Theory

Notes 3. He should see whether the Auditor has verified the adequate provisioning of depreciation
at prescribed rate, and valued the closing stock correctly.
4. In respect of Banking Institutions the Fluid resources should be examined by supervising
officer with reference to the provisions of the KCS Rules as well as rate fixed under the B.R.
Act.
5. Proper classification of assets and provisioning thereon as IRAC Norms. In respect of
societies other than these provisions made for bad debts should be examined.
6. The supervising officer should go through the draft audit report and make necessary
corrections and get the draft signed by the Secretary or the Managing Director in token of
his having seen it at draft stage. In case the Managing Director or Secretary wishes to his
own version regarding any particular transaction that may be incorporated in the audit
report together with the Auditor’s comment thereon.
7. In respect of audits which can not be supervised locally by the supervising officer, a
general scrutiny will be exercised by the audit report releasing authority, when audit
reports are received from the Auditors concerned.
8. On receipt of the audit reports relating to audits which are not supervised on the spot the
releasing authority will exercise the following checks in addition to the checks stipulated
in Head Office Circular No. ADT/2/78-79, dated: 18th May 1978.
(a) Whether the Auditor has furnished as many details as necessary regarding shortages
or misappropriations if any, and explained them clearly.
(b) Whether the language of the report is impersonal and objective.
(c) Whether the Auditor has given opportunity to the persons concerned to furnish
their versions regarding transactions which are adversely commented upon in the
audit report and their comments regarding assessments made against them.
(d) Whether necessary schedules and statements have been attached to the final accounts.
(e) Whether there is any apparent omission on the part of the Auditor to look into any
aspects of the working of society, as can be gathered by a perusal of the final accounts
and his report.

(f) The arithmetical accuracy of the final accounts should be got checked in the Assistant
Director’s Office.
9. The sub-divisional Assistant Director of Co-operative Audit, and the Deputy Director of
Co-operative Audit are required to supervise certain audits conducted by the Auditors.
For the purpose they have to select for every month, a prescribed number of societies
whose audit is in the final stage of completion. The societies selected should generally be
important institutions. They should visit the institution at the end of the audit. So that the
draft audit report is available for is perusal During the course of their supervision they
should look into the following points apart from perusing the draft audit report prepared
by the auditor.
(a) Whether the Auditor has seen that the society has fulfilled the objectives for which
it was set up.
(b) If there are shortages or misappropriations whether the Auditor has furnished as
many details as necessary and whether he has avoided vague statements and
explained the shortages and misappropriation clearly. (Note: Supervising officer
should also look into the relevant documents wherever he suspects shortages or
misappropriations)

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