Please explain me how would I verify the advances made to suppliers, as appearing in the books of a…
Please explain me how would I verify the advances made to suppliers, as appearing in the books of accounts of my client's company"
Chiranjibi Mar. 12, 2018
You can verify the advances made to the suppliers by considering the following points:
- Examine the bought ledgers to ascertain the debit balance of trade payables and trace the corresponding entry to the cash/bank book.
- Obtain a schedule of advances to suppliers and verify it with balances in bought ledger.
- Assess the possibility of delivery of goods against advance payment and examine whether provisioning is required.
- Obtain/resort to direct confirmation procedure.
- Ensure proper classification in the balance sheet as per requirement of Schedule III to the Companies Act, 2013.
- Pay special attention to long outstanding advances and enquire about the reason thereof.
