Auditing and Assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

Metro Developers Pvt. Ltd is Bharatpur based Real Estate Company. It has invested heavily on the apartments and commercial complexes on and around Narayangarh. Recently, audit of the transaction for rental receipts was hastily completed taking monthly average figure and multiplying it 12. You are required to suggest appropriate way of conducting of audit for the above said transaction of rental receipts.
Answer
To vouch for rental receipts, various documents need to be seen. To start with, copies of bills issued to tenants should be test checked reference to copies of tenancy agreements and bills of charges paid the landlord on behalf of the tenants e.g., house tax, water tax etc. The amounts collected from tenants on account of rent should be checked reference to receipts issued them. The entries in the Rental Register in respect of rents accrued afterwards should be verified. The register should also be scrutinized for finding out the rent amount, which have not been recovered and are considered bad or irrecoverable, for deciding whether these should be written off or provision against the same should be made.



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