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How The Auditor Check And Vouch The Cash Received From The Debtor By The Business?

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Nouman Umar Profile
Nouman Umar answered
The carbon copy receipts or counterfoil receipts in support of the entries appearing in the receipt of the cash book should be examined. The method of allowing the discount to a customer against prompt payment should also be inquired into. Any unusual discount should be noted and satisfactory explanation should be obtained from the responsible official.

The test check of tracing the amount received as per cash book into the statement of accounts received from the debtor should also be done. Requisite amount of work should be done to uncover the process of teeming and lading or also called lapping. Under this method when the cash is received from one party no entry is made in the cash book by the cashier and he makes a personal use of the same.

At the end of the month or the year the cashier generally replaces the money he had so far used without the permission of the management and credits the account of the debtor whose account has not been credited. In order to put an effective check so that the said malpractice is checked the following steps should be taken.

The carbon copy of the receipt or the counterfoil receipt, as the case may be should be checked with the pay in slip. Special attention should be given to the amount banked that is number of the cheques and corresponding amount.
Nouman Umar Profile
Nouman Umar answered
There are different methods which are used by the auditor. Counterfoil or carbon copy of the receipts should be checked with the amount in the cash book. The accuracy of the amount should verify with reference to the agreements with the parties regarding rate of commission and its entitlement of receipt. Calculation of the amount received and the basis of the working should be checked.

The entitlement of the receipt of the subscription must be checked with the bey-laws of the association or club. Subscriptions received should be checked with the counterfoil receipt or the carbon copy receipt with the register of subscriber. Any unusual amount of subscription should be inquired into.

Broker sold notes should be vouched. The fact that the sale is ex-dividend should carefully be examined. In the case of dividend sale element of revenue in respect of dividend and amount attributable to investments should be appointed. Minutes of board of directors should also be examined if the articles of association require that sales of investment should minuted by the board of directors.

The amount received against the bill receivable should be vouched, with reference of the bills receivable book. For the bills which are due for the receipt of money but against which the amount has not been received inquiries must be made against the same.

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