How would you verify for Declaration of interim dividends.

Auditing and Assurance Revision Questions and Answers

The auditor should consider some matters, which were to be taken into account the management before such dividend is declared:
 Whether the directors are authorized to pay such a dividend under the Articles of the company.
 Whether interim accounts have been reared after making the provisions required for bad debts, annual depreciation, etc.
 Whether there are sufficient profits available for distribution as a dividend.
 The rate of interim dividend should be such does not raise and undue hope in minds of shareholders, as regards the amount of the final dividend, larger than that justified the financial position of the company, in that case prices of the share will fluctuate unduly.



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