describe process to review client's book-keeping before we prepare the statutory accounts
General Information
- Check that all financial transactions have been recorded in the client's bookkeeping system
- Verify that all income and expenses have been properly categorized
- Compare the bookkeeping records with supporting documents such as bank statements, invoices, and receipts
- Reconcile any discrepancies between the bookkeeping records and the supporting documents
- Ensure that all necessary adjustments, such as accruals or prepayments, have been made
- Review the general ledger and trial balance to identify any errors or irregularities
- Confirm that all required financial statements, schedules, and reports have been prepared
- Perform a final review of the bookkeeping records to ensure accuracy and completeness
Chart of Accounts
Bank Reconciliation
Sales and Accounts Receivable
- Check that all sales invoices and receipts are properly recorded and accounted for in the bookkeeping system.
- Ensure that all necessary supporting documents, such as sales orders or delivery notes, are available and properly filed.
- Verify that the sales invoices and receipts are correctly posted to the appropriate customer accounts.
- Cross-reference the sales invoices and receipts with the corresponding bank deposits or payment records.
- Investigate any discrepancies or irregularities in the sales invoices and receipts.
- Document any findings or issues identified during the review process.
- Compare the customer balances in the bookkeeping system with the corresponding customer statements or aging reports.
- Ensure that all customer payments and credit notes are accurately recorded and applied to the appropriate customer accounts.
- Investigate any significant differences or discrepancies between the bookkeeping system and the customer statements.
- Reconcile any outstanding items or discrepancies in customer balances.
- Document any adjustments or corrections made to the customer balances during the review process.
- Review the company's bad debt policy and the methodology used to calculate the bad debt provision.
- Examine the historical bad debt experience and trends to determine if the current provision is appropriate.
- Evaluate the creditworthiness of customers and assess the collectibility of outstanding receivables.
- Consider any specific events or circumstances that may impact the collectibility of receivables.
- Assess the adequacy of the provision based on the findings and make any necessary adjustments.
- Document the rationale for the assessment of the bad debt provision and any adjustments made.
Purchases and Accounts Payable
- Review all purchase invoices received from suppliers
- Verify that the invoices are accurately recorded in the bookkeeping system
- Cross-check the payments made to suppliers with the recorded invoices
- Ensure that all relevant supporting documents are attached to the invoices
- Compare the supplier balances in the bookkeeping system with supplier statements
- Investigate any discrepancies or differences between the two
- Reconcile any outstanding balances to ensure accuracy
- Review the list of outstanding payables
- Check for any missing or unrecorded invoices or payments
- Verify that all outstanding payables are accurately reflected in the books
- Investigate any discrepancies or inconsistencies in the records
Payroll
Fixed Assets
- Check that fixed assets are properly recorded and classified in the accounting system
- Verify that fixed assets are correctly categorized and labeled according to their type and purpose
- Review the depreciation calculations made for each fixed asset
- Verify that the supporting documentation for depreciation calculations is accurate and complete
- Physically inspect the fixed assets to ensure they exist and are in good condition
- Compare the physical assets to the fixed asset records to ensure accuracy
- Cross-reference the fixed asset records with the physical assets to ensure accuracy
- Investigate and resolve any discrepancies between the fixed asset records and physical assets
- Evaluate the policies and procedures in place for capitalizing new fixed assets
- Review the policies and procedures for disposing of fixed assets
- Review the maintenance and repair records for fixed assets
- Ensure that the maintenance and repair activities are properly documented and carried out
- Identify any indicators of potential impairment for fixed assets
- Assess the accuracy and appropriateness of impairment calculations for impaired assets
- Compare the valuations of fixed assets to their current market values
- Review any appraisals conducted to determine the accuracy of fixed asset valuations
- Review the terms and conditions of lease agreements for fixed assets
- Ensure that the accounting treatment of leased fixed assets complies with accounting standards
- Identify any potential risks or obsolescence factors that may impact the value of fixed assets
- Evaluate the adequacy of provisions or allowances for potential obsolescence or risks
- Review the insurance policies and coverage for fixed assets
- Assess the adequacy of insurance coverage to protect against potential loss or damage
- Review the financial statements for any disclosures related to fixed assets
- Ensure that the disclosures provide sufficient information about fixed assets to users of the financial statements
Use in Manifestly