What are the special steps involved in carrying out the audit of Hospital? (June 2002) Or
Mention special points which you as an auditor would look into while auditing the books of account of Hospital. (7 Marks June 2012)
What are the special issues involved in an audit of a hospital?
The special steps involved in carrying out the audit of a Hospital are stated below:
1. Vouch the Register of patients with copies of bills issued to them. Verify bills for a selected period with the patient‟s attendance record to see that the bills have been correctly prepared. Also see that bills have been issued to all patients from whom an amount was recoverable according to the rules of the hospital.
2. Check cash collections as entered in the Cash Book with the receipts, counterfoils and other evidence for example, copies of patients bill counterfoils of dividend and other interest warrants, copies rent bills, etc.
3. See reference to the property and investment Register that all income that should have been received way of rent of properties, dividends, and interest on securities settled on the hospital, has been collected.
4. Ascertain that legacies and donations received for a specific purpose have been applied in the manner agreed upon.
5. Trace all collections of subscription and donations from the Cash Book to the respective Registers. Reconcile the total; subscriptions due as shown the Subscription Register and the amount collected and that still outstanding.
6. Vouch all purchases and expenses and verify that the capital expenditure was incurred only with the prior sanction of the Trustees or the Managing Committee and that appointments and increments to staff have been duly authorized.
7. Verify that grants, if any, received from Government or local authority have been duly accounted for. Also, that refund in respect of taxes deducted at source has been claimed.
8. Compare the totals of various items of expenditure and income with the amount budgeted for them and report to the trustees or the Managing Committee significant variations which have taken place.
9. Examine the internal check as regards the receipt and issue of stores: medicines, linen, apparatus, clothing, property, instruments, etc. So as to ensure that purchases have been properly recorded in the stock Register and that issued have been made only against proper authorization.
10. See that deprecation has been written off against all the assets at the appropriate rates.
11. Inspect the bonds, share scrips, title deeds of properties and compare their particulars with those entered in the property and investment Registers.
12. Obtain inventories, specially of stocks and stores as at the end of the year and check a percentage of the items physically; also compare their total values with respective ledger balances.