Discuss the important points in the audit of an educational institution.

Auditing and Assurance Revision Questions and Answers

Answer:

1) Knowledge of the Institution

a) Ascertain the legal status of the institution.

b) Note the important provisions of regulating Act.

c) Examine the bye-laws and note the relevant provisions.

d) Examine the minutes of the meetings of the board/governing body/managing committee/finance committee etc.

e) Obtain a list of functionaries who are authorized to sanction or execute financial transactions.

f) Obtain a list of books of account and that of other registers and records.

g) Examine the previous years’ audit reports, internal audit reports and note the important observations.

2) Income

1. Examine copies of the bills raised for fees. Examine whether the bills are based on the fees applicable to different categories of students and whether they contain details of fees structure.

Also verify that the fee structure conforms to the rules and limits prescribed the government/ other authorities.

2. Examine whether fee concession have been granted as per the rules.

3. Examine whether the bills have been entered properly in the fee register/other records.

4. Examine the entries in the cash book/ fee register with reference to the counterfoils of receipt issued.

5. Examine the statement of reconciliation of fees i.e. total fees received during the year and the total fees receivable as per the applicable fees structure.

6. Verify interest/ dividend receipt during the year with the total interest/ dividend that should have been received as per investment register. Examine whether interest accrued but not received has been duly recognized.

3) Expenditure

1. Examine whether salaries and allowance paid are in accordance with the terms and conditions of appointment of each category of staff.

2. Check the computation of gross remuneration payable and deductions.

3. Vouch payment of salaries and allowances with reference to the acknowledgements from the employees and entries in the bank statement.

4. Verify the deposits of amounts relating to income tax, provident fund etc. Examine whether the amounts have been deposited within the prescribed time limits.

5. Examine whether payments of scholarships to students are properly authorized and conform to the terms stipulated. Vouch payments of scholarship with reference to the acknowledgment from the students.

6. Examine the payments on account of expenditures in the usual manner. Similarly, examine the payments relating to purchases.

4) Assets and Liabilities

1. Verify payments made on account of refund of security and other deposits to students leaving the institution with reference to acknowledgement given them.

2. Verify payments made on account of purchase of fixed assets and recording of it.

3. Examine the charge of depreciation.

4. Carry out physical verification of fixed assets and investments. Examine whether the applicable legal requirements regarding acquisition of investments have been complied with.

5. Examine the transactions of loans, advances as also of purchases, sales etc. between the institution and any member of the governing body. Examine whether these transactions are prima facie detrimental to the interest of the institution.



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