Auditing and Assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

Help- SIPA, an NGO registered in Nepal raises funds from members, donors or contributors to support victims of Earthquake of Sindhupalchok. Explain the points which you will consider in preparing the Audit Programme of this NGO.
The audit programme should include in a sequential order all assets, liabilities, receipts and expenditures ensuring that no material item is omitted.

(a) Corpus Fund: The contributions / grants received towards corpus be vouched with special reference to the letters from the donor(s). The interest income be checked with Investment Register and Physical Investments in hand.

(b) Reserves: Vouch transfers from projects / programmes with donors‟ letters and board resolutions of NGO. Also check transfer of gross value of asset sold from capital reserve to general reserve and adjustments during the year.

(c) Ear-marked Funds: Check requirements of donor‟s institutions, board resolution of NGO, rules and regulations of the schemes of the ear-marked funds.

(d) Project / Agency Balances: Vouch disbursements and expenditure as per agreements with donors for each of the balances.

(e) Loans: Vouch loans with loan agreements, receipt counter-foil issued.

(f) Fixed Assets: Vouch all acquisitions / sale or disposal of assets including depreciation and the authorizations for the same. Also check donor’s letters/agreements for the grant. In the case of immovable property check title, etc.

(g) Investments: Check Investment Register and the investments physically ensuring that investments are in the name of the NGO. Verify further investments and disinvestment for approval the appropriate authority and reference in the bank accounts for the principal amount and interest.

(h) Cash in Hand: Physically verify the cash in hand and impress balances, at the close of the year and whether it tallies with the books of account.

(i) Bank Balance: Check the bank reconciliation statements and ascertain details for old outstanding and unadjusted amounts.

(j) Stock in Hand: Verify stock in hand and obtain certificate from the management for the quantities and valuation of the same.

(k) Programme and Project Expenses: Verify agreement with donor/contributor(s) supporting the particular programme or project to ascertain the conditions with respect to undertaking the programme / project and accordingly, in the case of programmes/projects involving contracts, ensure that income tax is deducted, deposited and returns filed and verify the terms of the contract.

(l) Establishment Expenses: Verify that provident fund, life insurance premium, employee‟s insurance and their administrative charges are deducted, contributed and deposited within the prescribed time. Also check other office and administrative expenses such as postage, stationery, travelling, etc.

(Visited 6 times, 1 visits today)
Share this on:

Leave a Reply

Your email address will not be published.