Auditing Vouching of Ledger – Learn Auditing in simple and easy steps starting from Following steps are involved in the audit of impersonal ledger account −. this post explains about impersonal ledger and its auditing. The auditor’s duty is to inspect the relevant accounts in the ledger, demand notes, receipts, etc., and find out what period is covered.

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It contains the accounts of persons with whom the business deals, assets possessed by the business and the expenses incurred and income gained by the business. All other accounts are maintained in this account. Transporters normally provide bills for transportation charges after closing of lesger year. If he finds entry for payment of rent I: The adjusting entry can be checked to see that exact amount is recorded.

The auditor can send letters to creditors to note exact amount payable to them. The reasons may be collected for failure of debtors to pay amount due. Contingent liability may be payable ledher future or may not be payable in future it depends on the event.

Vouching Of Impersonal Ledger. It may be necessary at some point usually month or year to ascertain the balance in an account.

Impersonal accounts refer to real accounts and nominal accounts which are related impeersonal trading account, profit and loss account and balance sheet.


The auditor should confirm actual amount of loans. Rent on factory premises, kedger building, godown, etc. There may some errors or frauds or goods in transit. Now it is an accepted principle that if the audit work starts in the current year the audit fee should be debited to Profit and Loss Account of the current year and if impegsonal audit work commences in the succeeding year, the audit fee should be charged to that year and not shown as an outstanding liability of the current year.


For example; Insurance of Fixed assets is normally paid on annual basis and if we paid insurance premium in the month of October for one year, then insurance for this current year will be calculated from October to March and from April to September it will be treated as prepaid insurance. The goods may impersoanl in transit. The auditor can check that posting is complete in all respects.

The banker can be asked to confirm the amount of bills discounted. No doubt main audit work impefsonal after the close of financial year and finalization of financial statements are done in next financial year but it is a widely accepted practice to do so.

Cash transactions are to be checked on the basis of cash book or journal. The auditor can check the total of general ledger. The steps for both debit and credit side of ledger posting are different and is explained below.

He can also make comparison of the current leger I figures of the preceding years to assess the amounts payable.

Ledgfr purchase ledger may be kept under self-balances system. It is a duty of an Auditor to take these expenses in the current financial year creating liabilities for the same.

Continue with Google or Continue with Facebook. The entry cannot be made unless goods and invoices are received.

Auditing – Vouching of Ledger

These expenses are paid in advance for next coming year shence should not be debited to profit and loss account of current year to arrive at true financial results. For vouching deferred revenue expenditures, the auditor should check the details of computation of the amount carried forward and see that the charge made to current years’ Profit and Loss Account is reasonable.

The auditor can, maintain accuracy of accounts. It does not only assure the correctness and reliability of nominal accounts but also helps to detect the errors which which remain in personal accounts. Download EduRev app here for B Com preparation. We will start by discussing the types of ledger accounts and proceed to their verification and also the verification of other accounts. We will now study the vouching of items which appear in the impersonal ledger and relate to Profit and Loss Account.


Auditing Vouching of Ledger

EduRev is a knowledge-sharing community that depends on everyone being able to pitch in when they know something. The confirmation from other sources is essential.

The Impersonal Ledger will impersoanl Vouched as Follows: Outstanding Wages and Salaries: Debit balance indicates that the person concerned has received more benefits from the business than what he has given it to the business.

Such contingent assets impwrsonal be stated as footnote for disclosure requirements. By continuing, I agree that I am at least 13 years old and have read and agree to the terms of service and privacy policy.

Incomes Receivable lwdger Accrued Incomes: A contingent asset is one that is not business asset at present. It can become asset after purchase. So, if there are any errors in such accounts, they will affect adversely to the report and financial statements which are to be signed by the auditor. In this way accuracy of adjustments is tested. For example, if any person filed a suit against company, possibilities are there, it may be in favor of company or it may be against the company, od case it will decide against the company, company has to pay such amount of suit as the court decides.

The company may have filed case in court of law against another company for infringement of copyrights or trademarks. The order letters, bills. The schedule of creditors is compared with entries in purchase ledgers. Special attention should be given while checking transfer entries qudit it effects the final accounts.