vouching of interest and dividend

2.other important aspect in vouching audit is sanctioning power whether delegated to the official sanctioning payment. 1.When int. Vouching of Cash Receipts (Debit Side of Cash Book) ... Interest and Dividend Received. It is proving that the transactions occurred, they are complete correctly measured and they relate to the correct period if they are of a revenue or expense nature. Define and explain the term ‘Di­visible Profits’. The auditor can go backward also using the help of tracing. 9. Ans. These refer to that portion of profits (i.e., the excess of income over expenditure including pro­vision for taxes and depreciation) which are avail­able for distribution as dividend […] Vouching is the process of reviewing documentary evidence and ensure that it properly supports entries made in the books of accounting. VOUCHING THE PAYMENT SIDE EXAMINATION OF INTERNAL SYSTEM 1. Vouching Verification of interest amount Verification of Dividend amount Verification of Royalty amount and agreements for the same calculation for any sale of asset/ scrap etc Cut off procedure Variance analysis. He should check the cash book, interest account and personal account. On bank deposits, Int. Please refer to the Instructions for Form 1040-NR … Main Menu; ... Dividend or profit or loss on sale of investment is a revenue receipt and the sales proceeds of the investment cost should be booked as capital receipt. Auditor should touched the profit from the investment with the counter of dividend warrants and financial journals. Vouching the receipts and deposit of interest checks. 8). To see that dividends have been received in the dates. Dividends • The portion of profits set aside by a company and declared as liable to be distributed among the shareholders 3. rec. Dividend and Interest & Accounts and Audit By Group S2 2. ... Interest received. a. Tracing deposit of dividend checks to the cash receipts book. Study Resources. For example, an auditor is a vouching document of the bill of lading to see if the document supports the number of purchases in the purchase journal. Dividend on investment. 12 november 2007 1.for vouching audit,outsiders bills, or any outside document is given more weightage , than internal evidence except when internal certification is enough. Vouching of Cash Transactions Vouching of Cash Receipts (Debit Side of Cash Book) We will discuss the. on bank deposits , auditor should verify bank pass book OR bank statement. Verification of the dividend warrant letter along with the covering letter for verification of dividends in case of dividends received through cheque. ... Dividend received. 2.When int. b. Reconciling amounts received with published dividend records. If you had over $1,500 of ordinary dividends or you received ordinary dividends in your name that actually belong to someone else, you must file Schedule B (Form 1040), Interest and Ordinary Dividends. Verification of bank statement, if the dividend is directly credited to the bank account. & dividend on shares, debentures and other securities- RECORDED- on receipt side of cash book-While vouching of this income auditor should CHECK the bank pass book, counterfoils etc. If the interest on loan is unpaid, the auditor should see that it is properly adjusted. Vouching is checking the authenticity of recorded transactions. Which of the following is the most effective audit procedure for verification of dividends earned on the investments in equity securities? Vouching of dividends should be done with the dividends warrants and shares and securities in respect of which these have been received. rec. The auditor should verify the dividend received is recorded in the cash book with the counter foils of the dividend warrants. Checking Of Internal System :-With reference to cash payments, auditor should examine the internal check system and keep in view the weak points while auditing 2. Purchase and other Direct Expenses:-Break up for different type of Purchase Custom Duty analysis Duty paid on purchases on loan given, Int. The auditor should take the following important points into consideration while vouching interest and dividends: (i). ADVERTISEMENTS: Some of the most frequently asked exam questions on auditing for dividends and divisible profits are as follows: Q.1.