SPECIAL AUDIT

An audit other than the annual audit of accounts of the company called in
special circumstances is known as special audit.

SPECIAL POINTS IN AUDIT OF A SUGAR MILLS

During the audit of a sugar mills the following points should be kept in mind.

1. Farming
The sugar mills may have its own agricultural farm to grow sugar cane. The
auditor should vouch farm expenses and income and also verify the farm assets
and liabilities.
2. Advances to Farmers
Sometimes the sugar mills make advance payments to farmers to purchase more
sugarcane. The auditor should verify that such advances are adjusted against the
purchases of sugarcane.
3. Purchase of Sugarcane
The auditor should ensure that proper weighing arrangements are made for the
purchase of sugarcane.
4. Packing Cost
The auditor should ensure that cost of bag must be included in production cost.
5. By Products
The auditor must ensure that there should be an effective internal control for
sale and collection of by products. He should vouch the income of by products.
Common points in various concerns
6.Investment
The auditor should ask for the schedule of investment. He can see investment
register. He can calculate the dividend received on such investment.
7. Minute Book
Auditor should also examine the minute book and note down the resolution
passed effecting the accounting and auditing matter.
 8. Payment
The auditor should verify the payment made to various parties.
9. Outstanding expenses
The auditor should check expenses outstanding at the end of the year. The
expenses due but not paid are to be recorded in the books of A/c. There is a need
to check the calculation.
10. Receipts
The auditor must check the receipts of cash from various sources. The goods sold
or service provided may be the basis of cash receipts.
11. Tax provision
Auditor should see that adequate provision has been made by the company for
tax payable and shown in the balance sheet.
12. Agreement
The auditor should check the agreement between the parties.
Some more points which are used in audit of sugar mills are
as follows:
13. Nature of Audit
14. Copy of resolution
15. Contingent liabilities
16. Maintenance of Depreciation
17. Make sure from report
18. Observe Capital and Revenue
19. Prepaid Expenses
20. Verification of closing stock
21. Intangible Assets
22. Nature of Accrued income
(Zoya Saad
Roll no: 272)