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(i) Petty cash balance
- The auditor should verify that the petty cash float is not allowed to contain expenses supported by IOUs unless these have been authorized by a responsible official.
- Verify the use of petty cash control account in the general ledger.
- Verify that petty cash vouchers for which payment has been made bear the 'paid‘ stamp.
- For substantial petty cash transactions, the auditor should check whether there are supporting documents attached
(ii)Revaluation Reserve
- Whether the revaluation was carried out on assets that have actually in existence for a considerable period of time.
- In the case of land, the new value of land leading to the revaluation must have been certified by experts in the field i.e. land valuers and certificate of valuation availed to the auditor.
- The auditor should probe to find out more information where exorbitant amounts of money have been transferred to the reserve account.
- The auditor should check to find out the frequency of revaluation; revaluations carried out after every other year should be probed into.
(iii)Copyrights
- The existence of Copyrights should be verified by examining the actual copyright and it should be seen that the same has been duly registered.?
- If the copyright has been purchased, the assignment should also be seen together with a receipt for the purchase consideration.?
- The copyright register should be inspected to see that the copyright has been included therein.?
- It should be verified that the copyright is carried in the books at cost less depreciation. The registration cost should form part of the cost while periodic renewal fee paid should be charged in the profit and loss account.?
- In case of joined registration of a copyright, registered assignment by the other party should be examined. The copyright may otherwise be subjected to litigation about its title
Wilfykil answered the question on February 22, 2019 at 13:10
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Cash in hand and cash at bank are commonly referred to as liquid assets. Because of this liquidity, these assets represent the most vulnerable of all the assets of an entity. You have recently been employed by Korir and Associates (Certified Public
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Required
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