Audit procedures for vouching and verification of loans receivable:
Inspect loans deeds for the loan amount, maturity date, periodic installments, interest rate and security provided.
Check mortgage deed (registered or otherwise) or guarantee letter or inventory of pledged or hypothecated merchandise as a security cover for the loan‟s
Confirm loan balance interest payable and maturity period of loans from the borrower.
Review minutes meetings of the Board of Directors relating to sanctioning of loans and their monitoring at periodic intervals.
Check interest calculations and follow up adjustment of discrepancies.
Vouch entries to source documentation on selective basis.
Examine transaction occurring near the year end.
Examine adequacy of provision for doubtful receivables.
Inquire if any litigation is ongoing with the borrowers relating to any dispute.