Audit Note Book
A note book which is prepared by the audit staff to note down all the uncleared queries which s/he may find in the course of audit and requires further clarification and explanation is known as audit note book. Audit note book contains information regarding day-to-day work performed by the audit staff on any particular date. Notes about all types of errors, difficulties and uncleared queries or points to be discussed with the auditor or clients and the points which are to be incorporate in the report are noted down.
Contents Of Audit Note Book
General Information
Generally the following information is incorporated in audit note book:
1. The nature of the business carried on and the important documents relating to the constitution of the business, i.e. Memorandum Of Association, Articles Of Association ( in the case of limited companies) and Partnership Deed ( in the case of partnership firm) and other legal documents.
2. The name of the client and the audit year.
3. A list of books of accounts in use.
4. Names of principal officers, their duties and responsibilities.
5. Particulars of the accounting and financial system followed and the internal check in operation in the business.
6. Details regarding accounting and financial policies followed in the business.
7. A copy of the audit program.
Special Matters To Be Recorded In The Audit Note Book
1. Routine queries not cleared, i.e., missing receipts and vouchers etc.
2. Details of mistakes and errors discovered.
3. The points raised during the course of audit, to which the attention of the auditor must be drawn, i.e. failure of the company to comply with the provisions of the Companies Act or of the Memorandum of Association and other legal requirements.
4. Extracts from minutes books and contracts and other correspondence with various government agencies, financial institutions, debtors, creditors etc.
5. The points to be incorporate in the audit report.
6. The points which needs further explanation and clarification e.g., a change in the basis of valuation of finished stocks or in the computation of depreciation, etc.
7. Date of commencement and completion of the audit.
