Following procedures will be followed:
Ensure that appropriate costs have been included in the preliminary expenses, such as expenditure incurred incident to the creation, formation and floating of a company.
Check board‟s minute book containing the resolution approving the expenses claimed by the promoters as having been spend in the formation of the company.
Examine supporting papers and vouchers, contracts, agreements etc. to support the promoters‟ claim. Also check bills and receipts issued by the printer of the memorandum and articles of association, share certificates etc.
Check receipt for the registrations fee paid from registration of the company.
Verify rates of stamp required to be fixed on the memorandum and articles of association.
Ascertain board‟s minutes book for the decision to write off the preliminary expenses over a period. The quantum of thereof, which has not yet been written off for these expenses should be carried forward in the balance sheet under the head miscellaneous expenditure (to the extent not written off or adjusted) over a period of year.
Check that no expenses other than those what constitutes preliminary expenses are booked under this head.