Page 194 - CA Inter Audit PARAM

CA Ravi Taori

QNO P&L (Advertisement Expense) #Unique
Old Course -- (SM17/SM20/SM21)
AIFS.51
Advertisement Expense
Answer ➢ Verify the bill/invoice from advertising agency to ensure that rates charged for different types of
advertisement are as per contract.
➢ See that advertisement relates to client’s business.
➢ Inspect the receipt issued by the agency.

➢ Ascertain the nature of expenditure – revenue deferred and see that it has been recorded properly.
➢ Ascertain the period for which payment is made and see that pre-paid is carried forward to balance
sheet.
➢ Compare the statement of account with the ledger account.
➢ See that all outstanding advertisement bills have been provided for

QNO P&L (Provision of Tax) #Unique Old Course --
AIFS.57 (SM17/SM20/SM21)
How will you vouch/verify the following?

Provision for income tax.
Answer ➢ Provision for Income Tax:
• Last Year
Review adjustments, expenses, disallowed special rebates, etc. with particular reference to
the last available completed assessment.

• During Current Year
• Examine relevant records and documents pertaining to advance tax, self-
assessment tax and other demands.
• Obtain the computation of income prepared by the auditee and verify whether it is
as per the Income-tax Act, 1961 and Rules made thereunder.

• Year End
• Compute tax payable as per the latest applicable rates in the Finance Act.
• Ensure that overall provisions on the date of the balance sheet is adequate having
regard to current year provision, advance tax paid, assessment orders, etc.
• Ensure that the requirements of AS 22 on Accounting for Taxes on Income have been
appropriately followed for the period under audit.

QNO P &L (Payment of Tax) #Unique Old Course – (SM17/SM20/SM21)
AIFS.59 New Course -- (SM25)
How will you vouch and/or verify payment of taxes?
Answer ➢ Documents
• Annual
Payment on account of income-tax and other taxes consequent upon a regular assessment
should be verified by reference to the copy of the
• assessment form
• receipted challan
• assessment order
• notice of demand and the.

• Quarterly
Payments or advance payments of income-tax should also be verified
• receipted challan acknowledging the amount paid and the
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