BASIC STATUTORY AUDIT PROGRAMME SAMPLE 

A.  Understand the business of Auditee

·         If this is a repeat audit, review the Permanent File and prior working papers, including policies/procedures, organizational charts, agreements, etc otherwise working papers of any other entity engaged in similar industry can be reviewed.

·         Conduct pre-audit interview with auditee and document discussions held.

·         Conduct audit planning meeting with Audit Manager and/or Director and document discussion held.  The following should be discussed:

Ø  Timing of fieldwork

Ø  Risk areas / internal controls

Ø  Audit objectives

Ø  Management structure of Auditee

Ø  Business Procedures etc.

B. Performing of Audit Procedures

·         Finance Act, 1994 : Service Tax

·         Income Tax Act, 1961

·         FEMA and other RBI compliances

Following are the points needed to be verified-

• Whether service tax has been charged duly from all the customers?
• Whether TDS has been deducted from requisite expenses as per relevant sections?
• Whether payment of taxes are made duly in the account of Government?
• Whether respective tax returns have been filed on or before due dates?
• Is any tax liability needed to be discharged by auditee for which no action has not been taken by auditee till now?
• Whether all the defined procedures have been followed in making or receiving payments? 

2. Existence and Efficiency of Internal Controls?

• Sales Department
• Recovery of Revenue System
• Existence of contracts with Airlines/Shipping Lines for Tour Management
• Procedure involved in Foreign Currency Transactions
• Planning and Budget system for Tour Management

Observation must comprise the following components-

• Whether the Controls are in existence?
• Whether they are adequate?
• Whether they are operating effectively and efficiently? 

3.  Verification of Balance-Sheet Items?

• Whether last year’s closing balances are tallying with opening balances of current year?
• Physical verification of Fixed Assets and Cash
• Bank Reconciliation
• Whether any unusual fluctuation is observed in any of the balance-sheet item?

4.  Bank reconciliation?

·         Verification of Bank balances with that of Confirmation Certificate.

5.  Tax Deducted At Source?

·         Ensure that Tax has been deducted on salaries.

·         Ensure that TDS has been properly deducted at specified rates & deposited on time.

·         TDS should be checked with the Challans of four Quarters along with the form 27 A, 24Q& 26 Q.

 6. Fixed Assets?

·         Verification of calculation of depreciation charged during the year.

·         Checking of any sale of assets or scrap, if any.

·         Physical verification for existence.

7.  Verification of Profit & Loss Account’s Items?

·         Income from tour booking

·         Income from hotel accommodation booking

·         Commission from various companies

·         Tour Expenses

Special focus on statutory transactions

8.  Human Resource Department?

·         Verification of staff member’s appraisals at the end of the financial year 2014-15.

·         Checking the Leave records from staff member’s personal files. Ensured that leave has been taken with prior approval from appropriate authority.

·         Checking of monthly salaries with salary paid register & reconciliation with books of accounts.

·         Checking of New joinees records i.e. interview results, resume, education qualification, Medical certificate from MBBS Doctor Etc.

·         Checking of resigned or terminated staff members records i.e. resignation letter, full & full and final settlement letter / No due clearance certificate, deposit of notice pay, etc, & also checking of approval from chairman etc.

·         Checking of proper PF deduction & due dates of deposition of same under the PF department.

·         Checking of monthly salaries with salary paid register & reconciliation with books of accounts.

·         Checking of resigned or terminated staff members records i.e. resignation letter, full & full and final settlement letter / No due clearance certificate, deposit of notice pay, etc.

·         Checking of deduction & deposition of Administrative charges under the PF Act has been properly allocated & accounted under their respective unit ledger account.