DEFINITION OF AUDIT NOTE BOOK
“Audit notebook is a diary on which auditor scribble down all important inquiries to avoid the possibility of unquestioned material facts.”
Justice William throws light on the importance of audit notebook in the following words,
“The audit note book that contained detailed information proved to be very helpful to the auditor in every critical moment”.
For preparing the audit report it is very useful for that auditor.
In case of negligence charge against the auditor, but note book s good evidence can be presented. It may be also used for future guidance and reference. It also enables to auditor to know that what work his assistant at each audit has done.
CONTENTS OF AUDIT NOTE BOOK
A: GENERAL INFORMATION:
1. NAME OF BUSINESS
The name of the business concern and their branches must be stated in the auditor notebook.
2. NATURE OF BUSINESS:
All the necessary information relating to the nature of business and the work done in that concern must be stated in the audit notebook.
3. ORGANIZATIONAL STRUCTURE
The audit notebook contains the information about the Organizational structure and the arrangements of the business.
4. MATTER OF AUDIT
All the instructions from the management on the matter of audit.
5. ACCOUNTS BOOKS:
The audit notebook contains the details of accounting books. The companies’ ordinance 1984 is followed by limited companies. The cooperative societies keep books under societies rules 1973 and for other it may be optional.
6. NECESSARY BUSINESS DOCUMENTS:
The audit notebook provides details about important business documents. The partnership deed, memorandum of association, articles of association is come which show the insight into the business.
7. OFFICERS DUTIES:
The audit notebook provides the name of offices working in the business. The duties of such officers are stated in it. The responsibility is noted check the performance of all officers.
8. CLIENT NAME & ADDRESS:
The audit notebook shows the name and address of his client. He may be a sole trader, partnership firm and a limited company: The complete address of business place and head office is necessary.
9. YEAR OF AUDIT:
The audit notebook can disclose the year of audit of accounting books and other records. When the audit is for special period it maybe less than one year. The time period is essential information.
10. ACCOUNTING SYSTEM:
The audit notebook shows the system of accounting being followed in preparing the financial statements and other records. The effective system provides feed back for checking the books accounts.
11. ACCOUNTING POLICIES:
The audit notebook provides information about accounting policies being used by the accounting staff. The principles of consistency helps to follow the same policies from year to year and changes can be disclosed.
12. INTERNAL CHECK SYSTEM:
The audit notebook can provide idea about internal check system. If it is effective the auditor can apply test need of through checking.
13. UDIT PROGRAMME:
The audit note keeps details of audit programme, which is being followed for completion of audit work. This programme distributes the work among the audit staff with reference to timing and instructions.
B. SPECIAL INFORMATION:
The audit notebook provides details about the queries made by the audit staff. The unclear queries are recorded in their book for completing the report. The management may fail to answer properly to the questions raised.
15. ERROR DISCOVERED:
The audit notebook provides information about the errors discovered during audit work. The management may rectify the mistakes to show time and fair view.
16. LEGAL REQUIRMENET:
The audit notebook shows that management has followed the legal requirements for doing business. It may relate to books of accounts, labor laws, tax laws and similar other formalities.
The audit notebook can disclose the extracts taken from contracts, agreements, minutes and other records. These extracts help the auditor to report on the financial matters of business.
18. WEAK POINTS:
The audit notebook contains information about the weak points. There may be errors. The vouchers may be missing. The queries may not be replied properly. All such points are helpful for auditor.
The audit notebook has record of clarification obtained from management on various points. Vouchers may not support the entries. In the same way entries may not be self- explanatory so auditor can gat information.
20. AUDIT TIMING:
The audit notebook can show date and time of audit. The date can be fixed with customer after mutual understanding. The date and time can show progress of work done by audit staff
21. BUSINESS MATTERS:
The audit notebook can provide facts and figures about all business matters. A business concern can perform many functions. The matters can relate to almost all functions. These matters can be stated in the audit report.
The audit notebook can help important information about accounting books and records. The page numbers of accounting journals and ledgers are recorded. Moreover the serial numbers of vouchers examined are also started.
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