Page 188 - CA Inter Audit PARAM

CA Ravi Taori
• Check the T.A. bills along with accompanying supporting documents such as air tickets, travel
agents bill and hotel bills with reference to the internal rules for entitlement of the
employees and also make sure that the bills are properly passed.

QNO P&L (Dividend Income Audit & Disclosure)- Old Course -- (M18E)
AIFS.69 Bhaskar CNO - AIFS-P3.040
As statutory auditor of the company list out audit procedures required to be undertaken for the following:
Dividend income.
Also indicate disclosure requirements of above as per Companies Act, 2013
Answer ➢ Dividend Income
For Dividends, verify that the same are recognized in the statement of profit and loss only when the
entity’s right to receive payment of the dividend is established, provided it is probable that the
economic benefits associated with the dividend will flow to the entity and the amount of the
dividend can be measured reliably.

➢ Disclosure Requirements:
Ensure whether the following disclosures as required under Ind AS compliant Schedule III to
Companies Act, 2013 have been made:
Whether ‘other income’’ has been classified as:
• Interest income
• Dividend income
• Other non-operating income (net of expenses directly attributable to such income)

QNO P&L (Interest Income from Fixed Deposits Audit & Disclosures)- Old Course -- (M18E/ N20E)
AIFS.71 Bhaskar CNO - AIFS-P3.040
As statutory auditor of the company lists out audit procedures required to be undertaken for the following:
Interest income from fixed deposits.
Also indicate disclosure requirements of above as per Companies Act, 2013.
Answer ➢ For verifying interest income on fixed deposits:
• Obtain a listing of fixed deposits opened during the period under audit along with the
applicable interest rate and the number of days for which the deposit was outstanding during
the period.
• For deposits still outstanding as at the period-end, trace the same to the direct confirmation
obtained from the respective bank/ financial institution.

• Verify the arithmetical accuracy of the interest calculation made by the entity by multiplying
the deposit amount with the applicable rate and number of days during the period under
audit.

• Obtain a confirmation of interest income from the bank and verify that the interest income
as per bank reconciles to the calculation shared by the entity.
• Also, obtain a copy of Form 26AS (TDS withholding by the bank/ financial institution) and
reconcile the interest reflected therein to the calculation shared by client.

• Disclosure Requirements:
Ensure whether the following disclosures as required under Ind AS compliant Schedule III to
Companies Act, 2013 have been made:
Whether ‘other income’’ has been classified as:
• Interest income
• Dividend income
• Other non-operating income (net of expenses directly attributable to such income)

QNO P&L (Profit / Loss on Sale of Investment & Disclosure Requirement)- Old Course -- (M18E/M21M)
AIFS.73 Bhaskar CNO - AIFS-P3.040
As statutory auditor of the company lists out audit procedures required to be undertaken for the following:

Gain/(loss) on sale of investment in Mutual funds.
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