The following are the audit steps to audit/vouch/verify money received from the sales proceeds of scraps or junk materials: Sale Proceeds of Scraps or Junk Materials 1 Review the internal control on scraps/junk materials, as regards its generation, storage and disposal 2 Ascertain whether the reasonable records are being maintained for the sale and disposal … Read more
The following are the audit steps to audit/vouch/verify the money receipts from royalties received: Sales Proceeds From Royalties received 1 Verify the relevant contract and ascertain the provisions relating to the conditions of royalty such as rate, mode of calculation and due date. 2 Check the periodical statement received in respect of books printed, … Read more
The following are the audit steps to audit/vouch/verify the advances given by the company to its suppliers: Advances given to suppliers 1 Vouch whether the suppliers are the vendors or the genuine suppliers. Obtain the list of suppliers of the entity if maintained 2 Check whether the suppliers are related parties. Verify the documents of … Read more
Preliminary expenses relates to the creation and floating of a company. It comprises stamp duties, registration fees, legal costs, consultants fees, expenses of printing of memorandum and articles etc. The following are the audit steps to audit/vouch/verify the preliminary expenses: Audit Steps For Preliminary Expenses Check the Board resolution approving the expenses Examine supporting papers … Read more
The following are the audit steps to audit/vouch/verify the client’s advertising expenses: Audit For Payment Of Advertisement Expenses Check that the advertisement expenses have been properly allocated whether to Capital, deferred revenue or revenue as the case may be. Examine the supporting documents to ensure that the expenses relates to the client’s business. Review and … Read more
The internal auditors may assist external auditors in the following ways: Performing checks on perpetual inventory records Visiting branches or depots regularly Preparation of systems documentation such as flow-charts Regular review and testing of controls
Factors which may contribute to the growth or expansion of internal auditing in an organization are: Increased size of business has brought a need for more sophisticated internal control systems which need to be constantly reviewed for adequacy and for correct operation Use of computers for data processing tends to mean that individual security and … Read more
The following factors or circumstances where the external auditor can rely on the work of the internal auditor: The professional qualifications of the internal auditor both on competency and ethical grounds The adequacy of planning, control and documentation in the internal audit department The responsibility of the internal audit department, whether it be to board … Read more
Append below some of the ways to gauge the effectiveness or reliability of an Internal Audit Department: Status In Organization Structure/Chart & Access/Communication To Top Level Management The level of department and the level of management to which the internal auditor reports to. Generally, the higher the level the internal auditor reports means the greater … Read more
The following categories of function may be carried out by an internal audit department: Advisory– meaning that the internal auditor may recommend improvements and changes in the system in operation and in the setting up of new systems Executive-the internal audit department may actually deise and install changes and improvements to existing systems and set … Read more