Auditing - Audit of Charitable Institutions

The following points need to be considered by an Auditor while conducting audit of Charitable Institutions −

  • He should know about the constitution and the legal status of Charitable Institutions.

  • An Auditor should study the Rules and Regulations of the State Government, Central Government and other applicable law to such institutions.

  • He should obtain a list of accounts, correspondence and all related documents which are required for the purpose of audit.

  • To know the detail which may affect important decisions of institutions, Auditor should study the Minutes Book of Governing Body.

  • Auditor should obtain list of members to verify the amount of subscriptions and list of regular donors to know the nature and purpose of donation of regular donors.

  • Auditor should vouch the amount of subscription and donations from counterfoils of receipts, members list, donation register and cash book, etc.

  • He should ensure that the funds received for a specific purpose are being utilized for the same purpose or not.

  • He should verify nature of donation and accounting treatment of such donations. Capital and revenue donations should be treated separately.

  • He should study the state code to verify whether any grant is applicable to the concerned institutions or not.

  • He should verify the provisions for subscription due but not received. Subscription receivable for last year whether received or not in the current year should also be verified.

  • Investments should be verified according to the rules of Institutions, whether investments are in approved fund.

  • Investments should be checked in the Investment register along with physical verification.

  • Income on investments in form of interest and dividends, etc. should be vouched carefully.

  • Title deed and other related documents of Land & Building should be verified.

  • Legacies can be verified with receipts book and legacies register.

  • An Auditor should verify assets and liabilities on institutions on the date of Balance-sheet.

  • He should verify the cash in hand and the cash at bank.

  • All the related expenses should be vouched carefully according to general auditing practices and principles.

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