VERIFICATION SUNDRY CREDITORS

Sundry Creditor is a person whom we received the goods are service. The auditor will verify creditors more or less on similar lines as in the case of sundry debtors. He should take a statement of balance of the trade creditors duly signed by the authorized official and these balances should be verified with the purchase ledger balances. He may also obtain confirmatory statements from the creditors. He should also examine the invoices as sent by the suppliers. He should carry out test checking of purchases made during the year, particularly those made at the close of the year. If debts have not been paid for a long time, he should enquire into the situation in detail. Sometimes, it is seen that instead of paying to the creditors, the amount might have been misappropriated by the officials.

VERIFICATION SUNDRY CREDITORS
SCHEDULE OF CREDITORS. The auditor can demand schedule of sundry creditors. Responsible officer of business concern must sign theoschedule. The opening balance, purchase, payments and other information are stated in it.
2.           CONFIRMATION FROM CREDITORS. The auditor can verify the
amount of creditors by writing letter. The creditors can inform the auditor about the amount. due. The accuracy of books and schedule can be examined.
3.           PURCHASE LEDGER. The auditor can verify the amount of creditors
from purchase ledger. The accdunts of all creditors are maintained in it. The auditor should examine every account in detail to determine the exact amount.
4.           OVERDUE BALANCE. The auditor .should examine the overdue balance of any creditors. The management may be asked to explain the, reason. In case of dispute the auditor can confirm, it from the party concerned.
5.           VOUCH PURCHASE BOOK. The auditor must vouch purchase book. The bills may be compared with purchase entries. There must be no missing entry. In this way the true position of purchase can be determined.
6.           VOUCH RETURNS OUTWARD BOOK. The auditor can vouch returns outward book. The goods returned to suppliers can be examined with the help of such book. The auditor can trace the errors and frauds committed by the management.
7.           INSPECT GOODS INWARD BOOK. The auditor must inspect the goods inward book. The purchase made a recorded in this book. These entries must appear in purchase book as well as purchase ledger. The query may be made for missing entries in such book.
8.           OUTSTANDING BILL PAYABLE. The auditor would examine the bills payable. The amount of outstanding bills payable should be noted. The management should explain the reason for unpaid amount. The confirmation may be made from concerned creditor.
9.           , INVOICES OF CLOSING PERIOD. The invoices of purchase relating to last month of the year should be examined. In the same way invoices of purchase for first month are checked. The unusual invoices may. be thoroughly examined.
COMPARE GROSS PROFIT PERCENTAGE. The gross profit percentage of last year should be compared with current year. The change in percentage is possible due to any foul played by management. The detailed inquiries should be made

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