Routine Checking – Merits and Demerits

We have already discussed about purpose and objectives of Routine Checking. In this article we will go through some merits and demerits of Routine Checking.

Purpose of Routine Checking

  1. Making totals and sub-totals of primary books of accounts, carrying them forward to the next page, and calculating the balances and their checking.
  2. Checking of the ledger postings derived from the primary books and journal, and to see whether they are properly done or not.
  3. To see the totals of debits and-credits of different accounts and their balances.
  4. To check whether balances of various accounts are properly taken to the Trial Balance, or not.

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Internal Check

Meaning Of Internal Check

Internal check system is a part of the internal control system of the business. This is also called Internal Block. Each trader wants that he should be able to control the internal activities of his business, in such a manner that he can get maximum profits and the. chances of mistakes, fraud, etc., are could be minimum. The system of internal check is one such arrangement, in which the activities of employees are divided in such a manner that the work of one employee is independently checked by the other employee. Unless all employees of the organisation are become united, the chances of fraud etc., is not there.

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Verification Parameters

Verification Of Assets

For verification of any assets the auditor has to mainly check some general points, which are almost similar for all kinds of assets, still according to the name of the asset, the auditor verifies them in the following manner

The main parameters to verify the value of an asset are

  • Debtors
  • Goodwill
  • Trade Mark
  • Land and Buildings

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Verification Of Assets

Meaning Of Verification

It is the duty of the auditor that he specifically writes in his report whether the financial position of the organisation represented in the Balance Sheet is proper or not. He must make sure that all the assets shown in the Balance Sheet are actually present with the organisation or not, the organisation has valued them properly or not, they are free from all kinds of mortgages etc. or not. Similarly he has ‘to make sure about all liabilities also. In this way the auditor evaluates the assets and liabilities of the organisation and verifies them, and this work of the auditor is called Verification.

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