Auditing - Auditor’s Duties of Provisions | 12th Auditing : Chapter 8 : Reserves and Provisions
Chapter: 12th Auditing : Chapter 8 : Reserves and Provisions
Auditor’s Duties of Provisions
Auditor’s Duties
1. Examine Articles of Association: The auditor should examine the provisions
of the Articles of Association to confirm the appropriations created for a
specific purpose.
2. Examine Directors Meeting Minute Books: Auditor
should examine the Minute Book of
Board of Directors to verify the provisions to be made.
3. Disclosure in Financial Statements: He
should ensure that all provisions are properly disclosed in the Profit and Loss
Account and Balance Sheet.
4. Adequacy of Provision in Financial Statement:
He should ensure that adequate
provision has been shown in the financial statement. If in case, the
provision created is not adequate, the auditor should mention the fact in the
report.
5. Verification of Documents: The
auditor should examine all the documents
and ensure that the amount to be created as provision is adequate and
sufficient to meet the loss or liability.
6. Utilisation for Specific Purpose: He has to ensure that the provisions
created are utilized for the specific purpose for which they are created.
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