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.