Page 288 - CA Inter Audit PARAM

CA Ravi Taori
QNO Audit of Stores Old Course -- (P16M/M16M/N16R/M18M)
GA.25 Bhaskar CNO - GA.200 New Course – (SM25)
Audit of the accounts of stores and inventories has been developed as a part of expenditure audit with

reference to the duties and responsibilities entrusted to C&AG. Discuss.
Answer

➢ Part of Expenditure Audit
Audit of the accounts of stores and inventories has been developed as a part of expenditure audit with
reference to the duties and responsibilities entrusted to C&AG.

➢ Design & Effectiveness of Regulations
Audit is conducted to ascertain whether the Regulations governing purchase, receipt and issue, custody,
sale and inventory taking of stores are well devised and properly carried out. The aim is also to bring to
the notice of the government any deficiencies in quantities of stores held or any defects in the system
of control.

➢ Purchases and related items (Rules / Sanction / Prices / Economy)
The audit of purchase of stores is conducted in the same manner as audit of expenditure,
namely, that these are properly sanctioned, made economical and in accordance with the Rules
for purchase laid down by the competent authority.
The auditor has to ensure that the prices paid are reasonable and are in agreement with those
shown in the contract for the supply of stores, and that the certificates of quality and quantity
are furnished by the inspecting and receiving units. Cases of uneconomical purchase of stores
and losses attributable to defective or inferior quality of stores are specifically brought by the
audit.

➢ Accounts / Inventory Levels
Accounts of receipts, issues and balances are checked regarding accuracy, correctness and
reasonableness of balances in inventories with particular reference to the specified norms for
level of consumption of inventory holding.
Any excess or idle inventory is specifically mentioned in the report and periodical verification
of inventory is also conducted to ensure their existence.

➢ Priced Accounts
When priced accounts are maintained, the auditor should see that the prices charged are reasonable
and have been reviewed from time to time. The valuation of the inventories is seen carefully so that
the value accounts tally with the physical accounts and that adjustment of profits or losses due to
revaluation, inventory taking, or other causes is carried out.

QNO Audit of Commercial Accounts / Activity Old Course -- (P16M/N19E/M21E)
GA.30 Bhaskar CNO - GA.220
With reference to Government Audit, what do you understand by Audit of Commercial Accounts?
OR
Write a short note on classification of commercial accounts maintained by the public enterprises.
Answer Nature of Enterprise Audit undertaken by

Departmental Enterprises engaged in Audit of these enterprises are undertaken by the C&AG
commercial and trading operations, which are in the same manner as any other Government
subject to the same laws, financial and other department.

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