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Please enlist how I can verify the advances giv...

Please enlist how I can verify the advances given by the company to its directors?

Please enlist how I can verify the advances given by the company to its directors?

1
Chiranjibi Chapagain Mar. 12, 2018

In case the company has given advances to the director, you can consider the following points to verify the amount:

  • Verify articles of association for powers of the company to grant advances to director.
  • Verify the compliance of Section 185 of the Companies Act, 2013.
  • Check the bank book/cash book entries with vouchers.
  • Study the contract /loan agreement, terms, rate of interest and inquire whether they are prejudicial to the interest of the company.
  • Check the confirmation received from the director for outstanding advances.
  • Check interest had been duly charged for the outstanding unless it is an interest free advance.
  • The loan or advances made to the directors should be distinctly shown in the balance sheet.
  • Check the related party transaction with director is disclosed in notes to the account (as per AS 18).

Please enlist how I can verify the advances given by the company to its directors?

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