Verification of Bills Receivable | Procedure | Guidelines for Auditor

Guidelines for Verification of Bills Receivable by Auditor

Verification of Bills receivable - Guidelines for auditor

Verification of Bills receivable – Guidelines for auditor

An auditor should adopt the following procedure while verifying bills receivable.

1. The auditor should verify Bills Receivable Book with bills receivable in hand for which he should call for a certified Schedule of bills in hand.

2. The totals of the Schedule should be checked by reference to the accounts in the General Ledger.

3. He should examine each bill to see that it is properly drawn, signed by the acceptor and is also properly stamped.

4. He should verify the bills met after the close of financial year but before audit by vouching the cash received and entered in the Cash Book.

5. Bills discounted should be examined by verifying the entries made in the Cash Book with those in the Bills Receivable Book.

6. The auditor should see that a note for the contingent liability in respect of bills discounted appears on the Balance Sheet.

In case bills deposited with a bank for safe custody or for security of a loan, they should be verified with the help of a certificate obtained from the concerned bank, in order to confirm their existence.

In case bills have been retired before the date of the Balance Sheet, the proceeds received there from should be checked by reference to the Cash Book.

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