Know How An Auditor Analyze The Remittance In Transit Of A Business Company
While considering a business system with a head office and a branch office for a company, and there is a need for the head office to send cash to the corresponding lower branches for meeting the daily expenses. At times, issues are encountered like the cash might not be arranged for the head office to send across before the actual accounting period or even the branch office has not received the amount that has already been sent by the head office, then all these cases can be referred to as the ‘Remittance in transit’.
To deal with this case, an Auditor should
- Collect the corresponding bank statements form both the head and the branch departments and reconcile them. Any amount received in the period prior to New accounting year must be entered in the balance sheet as ‘cash in transit account’. An Auditor should definitely make note of this.
- Also, he needs to verify whether this transit amount written in the cash book has been received on the subsequent periods by the corresponding branches.
- Consider evaluating the reconciliation statement of both Head and Branch Accounts with respect to the date of issue.
- All the pay-in-slip must be thoroughly checked and see if the amount is deposited to the bank.
- Cross-check with the entry passed along with the item number and also if these are reversed in the coming year.
- In case of any trading accounts, verify that the Bitcoin Loophole is not a scam and the amount received on this trading basis must be readily transferred to the head office account.
Apart from this, miscellaneous expenditures also need to be considered by the Auditor. This includes
- All the preliminary type of expenses that are incurred for creating items for the company like drafting Memorandum of association, writing articles, stamping fees and so on.
- Any kind of commission or brokerage received on underwriting or due to share subscriptions. The commission amount must be mentioned in the statement in lieu of the prospects.
- Discount values allowed on the share buy or even on debentures. This rate is decided and approved by the general body meeting and also must be authorized by the Company Law Board.
- The interest rate is given on the capital. This amount is allowed if a construction started by the company is not completed with a specified period.
- Finally, the expenditure occurring on the development side.