Check if they cast the payroll at the time of approval Tests undertaken in

Check if they cast the payroll at the time of

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Check if they cast the payroll at the time of approval. Tests undertaken in order to ensure that capital commitments at the year end were fairly stated in the books. S TRATHMORE U NIVERSITY ● S TUDY P ACK Lesson Ten
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181 Check authorisation of capital commitments this should be prepared by very senior level management and those responsible should have no connection with cash or the custody of title. Maintenance of investment register; check if it is done by a clerk with no access to documents of title and responsibility for authorisation of purchase or sales . Ensure that an independent clerk should be given the duty of comparing contract notes with purchase and sales authorisation and for ensuring that charges have been correctly calculated. Adequate custody procedures must be maintained for documents of title and two senior officials should have responsibility for them. Q7. (a) Four situations under which the Act requires auditors to qualify their report. 1. If the auditors are unable to obtain all the information and explanations they consider necessary for the purpose of their audit, for example, if they are unable to obtain satisfactory evidence: Of the existence of ownership of material assets or of the amounts at which they have been stated on the basis adopted. Of the validity of payments That the records properly reflect all transactions of the business because the evidence has been lost or destroyed or is otherwise not forthcoming or has never existed. 2. If in the opinion of the auditors: Proper books of accounts have not been kept in accordance with the Companies Act; Proper returns adequate for their audit have not been received from branches nor visited by them. The balance sheet and the profit and loss account are not in agreement with the accounting books and returns. 3. If in the opinion of the auditors the accounts though based on proper books of account fail to give the information required by the act for example, a failure to comply with specific disclosure requirements of the Companies Act in material respects. 4. If in the opinion of the auditors the accounts though otherwise complying with the disclosure requirements fail to disclose a true and fair view for example. Because in the auditor’s opinion the underlying accounting policies do no conform to accounting principles appropriate to the circumstances and nature of the business; Because they are prepared on principles inconsistent with those previously adopted and without adequate explanation and disclosure of the effects of the change; Because the auditors are unable to agree with the amounts at which an asset or a liability is stated; Because the auditors are unable to agree with the amount at which income or expenditure or profit is stated; Because the accounts do not disclose information though not specifically required by the companies act, is necessary for the presentation of a true and fair view;
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