Page 309 - CA Inter Audit PARAM

CA Ravi Taori
• Vouching payment of grants, also verifying that the grants have been paid only for a
charitable purpose or purposes falling within the purview of the objects for which the
charitable institution has been set up and that no trustee, director or member of the
Managing Committee has benefited there from either directly or indirectly.
• Ascertaining that any funds contributed for a special purpose have been utilized for the purpose.

➢ Major Assets
• Verifying the schedules of securities held, as well as inventories of properties both movable and
immovable by inspecting the securities and title deeds of property and by physical verification of
the movable properties on a test- basis.
• Verifying the cash and bank balances.

➢ Other Points
• Income Tax Refunds – Where income-tax has been deducted from the Investment income, it should be
seen that a refund thereof has been obtained since charitable institutions are exempt from
payment of Income-tax. This involves:
• vouching the Income-tax refund with the correspondence with the Income- tax
Department; and
• checking the calculation of the repayment of claims.
Author’s Note
• This is a master answer you can write the relevant aspect of the master answer as per what
the question is asking.
• In study Material they have included points of assets also in audit of expenditure

Audit of an NGO Old Course –
QNO (Receipts & Remittances (P16M/N17R/N18E/N18R/M21M/SM17/M18M/N18M/M19M/SM20/SM21)
ADE.75
New Course – (SM25/J25R)
to Others) #Unique
An NGO operating in Delhi had collected large scale donations for Tsunami victims. The donations so
collected were sent to different NGOs operating in Tamil Nadu for relief operations. This NGO operating in
Delhi has appointed you to audit its accounts for the year in which it collected and remitted donations for
Tsunami victims. Draft audit programme for audit of receipts of donations and remittance of the collected
amount to different NGOs. Mention two points each, peculiar to the situation, which you will like to
incorporate in your audit programme for audit of said receipts and remittances of donations.
OR
"An NGO operating in Mumbai has collected large scale donations for Kerala flood victims. This NGO has
appointed you to audit its accounts for the specific period in which it collected donations. Draft audit
programme, mentioning six points peculiar to the situation, which you would like to incorporate in your
audit programme."
Answer ➢ Receipt of Donations

• Internal Control System: Existence of
internal control system particularly with
reference to division of responsibilities
in respect of authorized collection of
donations, custody of receipt books and
safe custody of money.
• Custody of Receipt Books: Existence of
system regarding issue of receipt books,
whether unused receipt books are
returned and the same are verified
physically including checking of number
of receipt books and sequence of
numbering therein.
• Receipt of Cheques: Receipt Book should have carbon copy for duplicate receipt and signed
by a responsible official. All details relating to date of cheque, bank’s name, date, amount,
etc. should be clearly stated.

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