Balancing of Books/Reconciliation of control and subsidiary records
These are:
System of monitoring the position of balancing of books/ reconciliation of control and subsidiary records.
Follow-up action.
The auditor’s comments would cover the head office/regional or zonal offices as well as the branches. The auditor can get the requisite information in respect of branches substantially from the LFARs pertaining to branches. The auditor is also expected to comment on the balancing of the books of account, e.g.,whether the primary books of account have been tallied and the general ledger balanced. The auditor should examine the position relating to balancing of bookswhich form the basis of the financial statements. The status as at the year-end relating to books not balanced should be clearly indicated by stating the relevantparticulars and indicating the extent to which these remain to be balanced.
The auditor should state the number of branches in respect of which the control and subsidiary records have not been reconciled. Where such records have been reconciled after the year-end, the auditor should exercise his judgment as to whether such cases need to be reported.
In so far as the head office is concerned, the auditor should give his observations on the unreconciled balances between the control and subsidiary records. It is suggested that, in respect of the relevant heads of account, the report should show the amount appearing in the general ledger, the aggregate amount appearing in the subsidiary records, and the difference between the two. The observations of the auditor would cover non-balancing of subsidiary records at the head office and persistent defaults observed in reconciliation of control and subsidiary records.
The auditor should critically examine the system for reporting the status of balancing/reconciliation by branches and offer his comments and suggestions, if any.