by Vouching of Receipts from Debtors
There should be an effective system of Internal Check. Important parts of such systems should be (a)Persons maintaining the debtor’s ledger should not be allowed to collect the money from the customers, and (b) The customers should be asked to remit cash/cheques through the post.
The auditor should ensure that the unused receipt books are kept in the custody and control of some responsible officer. The original copies of all the spoilt receipt forms are attached with the duplicate copies in the receipt book. Proper scrutiny should be made about the discounts allowed to the customers. Special attention should be paid to amounts written off as bad debts. Tally the dates and amounts on the counterfoils with those in the cash book. Teeming and Lading should be avoided.
Vouching of Sale of Investment
Sale of Investment should give rise to capital receipts, except in the case of sale by brokers or investment firms for whom the proceeds will constitute revenue receipts. Vouching of sale of investment should be done with the broker’s advice and comparison with the stock market quotations in the fin racial journal. It should also be checked with related to investments accounts. The securities on hand and the payments received thereon from time-to-tithe should be checked.
