Statutory Audit Presentation

Tally.
ERP 9 Auditors Edition Statutory Audit
Tally Solutions Pvt. Ltd. All Rights Reserved
Agenda
Statutory Audit using Tally.ERP 9 AE Benefits Definition & Audit Objective Audit & Analysis-Features Audit Journals Financial Statements
Benefits
The Tally.ERP 9 AE offers many benefits to Auditors performing a Statutory Audit. Enables faster and easier data analysis - saves time and cost Generates Exceptions for Accounts, Stocks, Balances, etc. Perform General Ledger review / scrutiny and assign Sampling Methods for verification of vouchers Perform Analytical procedures, Fixed Asset Analysis Finalise book of account through Audit Journals Aids in preparing Schedule VI Balance Sheet and Profit & Loss A/c
Definitions & Audit Objectives

Statutory Audit refers to examination/verification activities performed by a Chartered Accountant to ascertain: a) Whether books of accounts prepared, conform to the accepted accounting principles, policies and law/statutes b) Reflect a true and fair view of the businesss state of affairs to interested parties The Chartered Accountant certifies whether the accounting information recorded in the books: a) Conform or b) Does not to above requirements
Audit & Compliance Menu

Tally Main -> Gateway of Tally Open Tally.ERP 9 Auditors Edition. Select the required Company to display Gateway of Tally. Select Audit & Compliance under Audit to access the audit features.
Access to Audit & Compliance Menu

When the Client activates the Security Control Scenario 1 Click Alt+F3:Cmp Info in Gateway of Tally to display the Company Alteration screen. Under Security Control: Select Yes for Use Security Control Enter details for Name of Administrator & Password fields
Access to Audit & Compliance Menu

When the Auditor provides the access details Scenario2 Accept and save Click Audit & the login details Compliance in for access. Gateway of Tally screen to display Company Alteration- Enable Security screen. Enable access to audit features by entering: Name of Administrator Password
Audit & Compliance

Main features of the Statutory Audit Menu. Access the Features covered Statutory Audit are: Menu features by Audit executing the Programme steps: Audit & Analysis Tally Main Audit Journals > Gateway Financialof Tally > Audit & Statements Compliance
Audit Programme
Prepare the programme for conducting the audit. Selected area Select default The Audit details of Click appears under area(s) to be Name and Address Programme under Areas of Audit audited under are automatically Statutory Audit . Period : Enter picked up from the menu Areas of Audit . time details after Company Creation screen under Select Yes to Client audit completion. You can also Details . Client Set /Alter Verified Byown : & define your Auditor Details in Enter Auditors area of audit Enter other details Audit Programme name. ( User Client Defined under screen Extent Area ofof Audit). Details and Verification : You can also Auditor Details. Enter scope of remove the area verification. of audit defined Verification (Remove User Remarks : Enter Defined Area of any remarks. Audit ).
Audit Programme
Define audit programme as per your requirements. Define the The can user defined You also required areas area ofaudit audit is of define areas audit underunder the now saved as required and Adding User Areas of Audit save them under Defined Area of and is List ofavailable Audit Audit window. for selection in Areas window. the current and future audits. Select User Defined Area of Audit under List of Audit Areas to define.
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Data Analysis
Perform a set of verification/analysis steps to ascertain certain attributes about Client data by comparing two years data Dashboards The dynamic Audit & to top: Enter the current Under Clarification Change period section, Data information Analysis screen under year against vouchers to be view previous Analysis provides clarified by client. Auditing after the change are: Beginning to years data for Clarified : clarified information on data Total of period. : total display its comparison with vouchers to errors be re- or exceptions, vouchers to dashboard. current year. audited. discrepancies, audited. Altered : vouchers mined of the Audited : Period the For example, Click F2out : modified after unaudited data. number to be enter 2009 to to change period. updating audit status audited. display to be re-audited. The Auditing Under dashboard for deals Note : Use this with verification Observation : of current yearthe menu when Other important voucher details and vouchers under 2009 -10 . data of both years menus include transactions auditors are available like in a control/support MSME, Forex,etc. observation. single folder. centers, etc.
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Data Analysis
Study trends in data between current and previous year and configure ledger accounts.
Mention the Compare current The Audit &path Click where the years Clients data Analysis Ctrl+F9 :Master previous years with theto previous Dashboard after Config display data is located year. comparison. Statutory Audit Configuration Select the data Click Ctrl+F3 : of screen the previous year Compare Cmp in to Compare select data of the Company screen. previous year for comparison with current year.
Note: Use this menu if data of both years reside in separate folders.
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Access Stat Audit all features directly from any where in the dashboard. Select Accessthe all features required stat audit under Statutory feature directly Audit menu under Audit directly from any Reports in Audit of its features. Reports screen to perform the Click Alt+ F10: desired audit . Audit Reports process.
Data Analysis
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Verification of Chart of Accounts

The Chart of Accounts is the starting point of a statutory audit. The Chart report provides Select All of Items Accounts after information on the the against Show configuration exceptions in the Ledgers having provides information ledgers of data. Status in on all exceptions in Configuration the ledgers. Click F12: screen. Configure and Note that a new select All Items Accept entries forto exception, No of display all types other fields. Change is displayed exceptions. along with others.
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Verification of Chart of Accounts

Features in Verification of Chart of Accounts. Only Out ofBalances the these Regrouped : , No Transactions exceptions Auditor can verify : generated, consider the reason(s) for Auditor can the advise the following regrouping the client to write examples: ledger account. off: considering the Only Balances, For Example, the ageTransactions of ledger the No selected balance account Regrouped was other factors grouped under Sundry Debtors in Yr 08-09 but in Yr 09-10, grouped under Sundry Creditors.
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Displays stock related exceptions in the data to be audited. Display of . in Difference For Notexample, Used exceptions Openingthe Stock consider relating to stocks exception. The Auditor can when data of two The Auditor can Negative verify/find the years are verify/find the Stock . reason(s) for the compared. reason(s) nil activityfor in the difference in the stock items. current years The Auditor can opening balance verify/find the when compared reason(s) for the with the closing negative stock. balance of the previous year.
Verification of Stock Items
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Verification of Stock Items

Configure display of details in Verification of Stock Items. Click The display after F12 :Configure configuration. Note Configure display the display of new details for No stock exceptionitems, Exceptions, Change . Groups, Audit Notes and Names.
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Verification of Balances
Verify differences in op balances in ledger accounts.
Note: If data of Investigate ledger Consider the both years are in accounts whose Exceptions of the the same folder,in the closing balances Fixed Assets differences op the previousin year Group. balances are not do not tally with relevant. the opening Analyse and find balances in the reasons for the The differences are current year.in the differences relevant only when closing and the data balances of both opening years are found in of ledger separate folders accounts for and are compared. appropriate action.
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Examine change in default/normal behaviour of ledger accounts Place cursor Need the Clarification Select the value for : Consider Explanation an for account Audit transaction for audit on the right side This value is chosen Audit Status and GroupStatus Direct values: (press Spacebar and drill down to ). when the Auditor enter observation Expenses , whose the ledger level requires under Audit Note. amount Unknown: is displayed This Click : Audit to display. additional/more in value redF9 is colour used under when audit it. information from the Values available for Transactions the Auditor wants (right to Select the Client Audit Status : side change ofbefore the theledger report). earlier account(s) with completing the audit. Unknown Verify audit decision the change taken. in credit closing Audited the normal behaviour balances. Under Need Clarification of Audited: the ledger This account. value Observation : This Under Observation is chosen when audit value chosen when of the is transaction is the Auditorand is still completed thein the process of Auditor has arrived auditing and has not at a decision. completed it.
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Perform General Ledger review / scrutiny by configuring display. F12 : Analyse Left side details Configuredifference/variance highlighted in red Configure how / in closing balances depict opening details have to in amount and closing difference be displayed percentage. and right side in the feature. details highlighted Click +V : in red Alt depict Balance behavioural Variancechanges Amount. Click Alt+X: Exceptions
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Analytical Procedures
Study behaviour between two different entities, e.g., A Group to Group, Ledger to Group, Ledger to Ledger, etc. Compare Sales Select thethe required Group with the information to Indirect the Expenses generate Group. comparison report (see image). Discuss with the Client on adverse variances and plan the required audit steps. For example, a decrease in Sales value with increase in expenses is not a good sign.
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Pending Documents
Generate pending status of orders, bills and outstanding. Perform the audit of Select the value Find the number For example, the pending under Audit Status and value of order generate the (e.g. PO). and enter the trading transaction Pending Purchase details under Audit details: Order Summary Select Note . any order to ascertain: transaction by Pending of sales Number pressing the Values available and purchase pending POs for Spacebar . Audit Status are: orders Unknown Goods received Opening value Click F9: Audit Audited without bills to perform the audit of Need Clarification Goods delivered Value of receipts transaction. Under but not billed Observation Outstandings Closing value Receivables & Payables Plan the audit steps accordingly. Tally Solutions Pvt. Ltd. All Rights Reserved
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Pending Documents
Ascertain the age of the pending orders/bills. Click F6 : Age Select any Click Click Alt+X Alt+F12 : wise Define the ageing The receivables in Receivables method (and Ageing by Exceptions Range to filter to list for all ranges/periods in transaction type amounts their Summary Bill Date /Ageing Sundry only debtors Creditors in order with Company Ageing (e.g. Receivables ) aged details are (Outstandings ) by Due Date ) in debit to generate balances relevant Alteration screen. under defined in the screen to age the Ageing Analysis ageing report Outstandings . Outstandings receivables. screen. Click Receivables.
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Statutory Payments
Gather key information on Statutory Payments for audit. Ascertain status To use this feature, information on that it is necessary statutory/tax initially the various remittancesstatutory & taxation features are activated What amount in F3: is payable? under Statutory F11: Features and relevant How much is entries paid? have been passed in Tally.ERP 9. What is the balance payable?
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Fixed Assets Analysis

Analyse important information relating to fixed assets during the year Verify information on fixed assets opening balance additions disposals closing balance number of days for depreciation calculation Aids in preparing depreciation schedule with provision to export this to Excel
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Examine payments that are made periodically and detect variances. information Select required Verify Periodicin on Click variance payments/receipts ledgers and click Payments terms of and Ctrl+F9 :amounts Master which periodic Ctrl + are A :under Changein Receipts and vouchers Config to nature. to configure them Master relating toledgers configure as Periodic Ledgers. Configuration payments/receipts in for E.g.Statutory Rents, Salaries, the audit. Ledgers. Interest income, Audit telephone bills, etc. Configuration screen.
Periodic Payments and Receipts
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Repeated Value Transactions

Probable duplicate entry of transactions Investigate for a Verify the the repeated Configure display given ledger of based values accounted in of transactions same transaction the report as on amount range: value how configured. equal to many instances greater are than repeated lesser than Sort the transactions as required. Click F12:Configureto configure the report display. E.g.-Amounts above Rs.5000 in ascending order.
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Relative Size Factor (RSF)

Relative Size Factor (RSF) is a forensic tool used by auditors to detect any anomalies in transactions of a ledger account.
The RSF factor is to the the required Click Select F4 any :of Group ledger A report Relative the Size ledgers ration of the highest values for Audit examine account ledger with Factor the ((e.g. RSF respective ) in nd highest and the 2 Status and Audit accounts Electricity to Charges review the ) Relative Audit & Analysis Size Factor ledger amounts. Note . is amounts and examine debited. the in ( screen. RSF ) displayed transactions the Relativewith Size RSF ratio The values available respect to RSF. Factor ( RSF ) is screen. verified taking into for Audit Status are: consideration Unknown the nature of ledger Audited account the Need and Clarification business Under activity. Observation Click F9: Audit to perform the audit of the transaction.
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Auditing/Vouching
Perform steps of: Need Clarification Auditing status Voucher verification, The number of Total The total Sampling, Forex, vouchers sent to the number of vouchers Payroll and MSME Client Clarification. under for audit for the audits Clarified (Tothe be Audit reyear. using & Analysis feature. audited ) The Audited The number number of vouchers of vouchers audited. View the number of clarified by the Client Under Observation transactions/vouchers to the Auditor The number ofand has audited under: to be re-audited. vouchers under Total (To be reAltered observation. Audited audited ) The number Under Observation of vouchers which have Need Clarification been altered by the Clarified Client after audit and Altered has to be re-audited.
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Verification of Vouchers
vouchers Click Ctrl + A: by Verify Select vouchers any Group any sampling Accept . using selected (e.g. Fixed Assets) method in the different for sampling methods by Sampling Details The details of for pressing audit. Spacebar . screen. sampled vouchers Click Alt + S: are displayed Select Sampling the Config to For example, select under Sampled required select a sample. Group for All Vouchers Vouchers in verification ofthe under Sampling Verification of vouchers in the Methods and Vouchers screen. Verification of return to the Vouchers screen. previous screen. Note: Sampling can be 100%/ based on Group(s)/Ledger(s)
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Verification of Vouchers
View sampled transactions and voucher types audited. View of Viewdetails the details of sampled vouchervouchers types and the audited Click F7: Show vouchers. Sampled. Click Ctrl + V: VchType Audit.
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Related Party Transactions

Select Related Partyrelated Transactions. the required party ledger for audit.
Configure the Select required These are Perform the audit According to You can Select any ledger display details ledger Account(s). transactions of the transaction. Accounting alternatively Drill down to under Other between the Standards, AS configure the voucher level and Information Click F9 : Update client and other Select the value 18, a party isin ledger accounts select for audit Ledger to configure the parties where under Audit considered as as related party the transaction. Alteration ledgers as either has some Status and enter related, if related it has through ledger screen. parties. interest/stake. appropriate the ability to creation under remarks under control the other Masters menu . Click F12 : +. F9: Click Ctrl Audit Note party or exercise Configure . Master Config . significant Select Yesover the influence against Use Configure the other in making Other related party financial and/or Information ledgers by operating for Ledger consulting decisions. Accounts the client..
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Forex Transactions
Select the Forex Transactions. Verify exchange rates used for foreign currencies transactions. Select any Perform audit of any Voucher Type transaction/voucher (e.g. F9 Payment Click : Audit) . by moving cursor to the right under Forex Vouchers and drill down to the voucher level.
Note: To use FE transactions feature, activate the multi currency option in F11:Features.
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Micro, Small & Medium Enterprise (MSME) Txns
Verify the timely payments to micro, small and medium enterprises Select Micro, Small & Medium Enterprise (MSME) Transactions. (MSME) for goods and services. Configure selection Buyers of goods of MSME ledgers and services from by discussing with MSME have to pay the client. interest at 3 times the bank rate for Click Ctrl+F9: late payments. Master Config to select the ledgers for audit.
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Micro, Small & Medium Enterprise (MSME) Txns

Display age wise amounts due to MSME parties. Generate ageing Define the ageing report by bill or analysis for periods to display due dates. bills outstanding the report. of MSME. Click F6: Age wise.
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Audit the employee headcount and their salaries details for Select Salary / Wages Payments. the year. To use this Select a salary Headcount Place the cursor The Monthly feature, you transaction for details: on the right side Summary of have activate audit. Opening of theto report Salaries/Wages the Payroll number under is displayed. option in Press spacebar New joiners Earnings , default and click F9: Resigned/Retir Deductions , Tally.ERP Audit . 9 and edSalary Net . account the Closing payroll number Drill down to transactions. display the Salary details: monthly Gross employee earnings earnings. Deductions Net earning
Salary / Wages Payments
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Generate report on movements in Salary/Wages Headcount based on Office Configure the display of details in Payments. and Dept. Filter to Place data the cursor Configure display display headcount ondetails. the right side of details for a under Head Click selected Count . Office . F12 :Configure and Dept. Click Ctrl + Drill down toF7: Employee display the Filters . headcount details for Offices & Depts.
Salary / Wages Payments
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Audit Journals
Use Audit Journals to close Books of Accounts for Others preparing final accounts as per Sch VI of Verify the entries passed by Client which affect Companies Act. the P&L A/c. Click Audit Click F7 : Audit Appropriations Select required Journals under Jrnl to display Example: appropriation Statutory the Accounting Appropriation value under Audit in Audit Voucher of net List ofprofit & Compliance Creation for Dividend Appropriation to display the screen. distribution. s to pass the Audit Journal final entry. Summary screen. These entries can be exported for import into client data
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Pass Entries for: Appropriation-record entries such as Dividend, Dividend Tax, Reserve & Surplus Depreciation- record Depreciation entries Set up provisions for: Interest-pass provisional entries for interest Tax-pass provisional entries for tax
Finalisation- entries passed in P&L before interest, depreciation and Tax Others- entries passed by client affecting P&L A/c
Financial Statements
Perform audit of the two main financial statements: 1. Balance Sheet 2. Profit & Loss A/c Advantages the Auditor Edition offers: Generate final accounts statements by click of button Define schedule numbers (numeric, alpha-numeric, roman) Regroup group/ledgers as per your requirements (regrouping does not affect the groupings in default Tally.ERP 9) Aids in preparing Schedule VI Balance Sheet and Profit & Loss A/c by exporting to Excel
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Schedule VI -Balance Sheet

Define Sch No for account heads. Define numbers for the accounting schedules as per your requirements. Click F9: Sch .No. to number/renumber Schedules.
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Move Tally ledgers/Groups from one Schedule VI Group to another Restore default settings. ClickSchedule F10+ : and The Ctrl Enter : Drill down move Click Schedule any key to Yes to Select Unsecured Restore Def Summary forto Config :default Select a a ledger from Summary of restore Restore Loans under List of restoreunder original Secured Loans to ledger Secured Loans Unsecured settings. Default? Groups and accept. settings. Group after the Secured Loans to . Unsecured Loans Loans to view the movement. move to movement of the Unsecured Loans Note : You can only. ledger account move a default from Secured group/ledger Loans. created in Tally from one Schedule VI Group to another.
Schedule VI -Balance Sheet
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Define Sch No for account heads.
Schedule-VI Profit & Loss A/c

Click F9:Sch.No. Define/Renumber schedules as per your requirements.
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Statutory Audit in Tally.ERP 9
Thank you
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Statutory Audit Presentation

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Tally.

ERP 9 Auditors Edition Statutory Audit

Tally Solutions Pvt. Ltd. All Rights Reserved

Tally Solutions Pvt. Ltd. All Rights Reserved

Tally Solutions Pvt. Ltd. All Rights Reserved

Definitions & Audit Objectives

Tally Solutions Pvt. Ltd. All Rights Reserved

Audit & Compliance Menu

Tally Solutions Pvt. Ltd. All Rights Reserved

Access to Audit & Compliance Menu

Access to Audit & Compliance Menu

Audit & Compliance

Tally Solutions Pvt. Ltd. All Rights Reserved

Tally Solutions Pvt. Ltd. All Rights Reserved

Tally Solutions Pvt. Ltd. All Rights Reserved

Verification of Chart of Accounts

Tally Solutions Pvt. Ltd. All Rights Reserved

Verification of Chart of Accounts

Verification of Stock Items

Tally Solutions Pvt. Ltd. All Rights Reserved

Verification of Stock Items

Tally Solutions Pvt. Ltd. All Rights Reserved

Verify differences in op balances in ledger accounts.

Tally Solutions Pvt. Ltd. All Rights Reserved

Tally Solutions Pvt. Ltd. All Rights Reserved

Tally Solutions Pvt. Ltd. All Rights Reserved

Fixed Assets Analysis

Periodic Payments and Receipts

Tally Solutions Pvt. Ltd. All Rights Reserved

Repeated Value Transactions

Relative Size Factor (RSF)

Tally Solutions Pvt. Ltd. All Rights Reserved

Tally Solutions Pvt. Ltd. All Rights Reserved

Related Party Transactions

Micro, Small & Medium Enterprise (MSME) Txns

Tally Solutions Pvt. Ltd. All Rights Reserved

Micro, Small & Medium Enterprise (MSME) Txns

Tally Solutions Pvt. Ltd. All Rights Reserved

Salary / Wages Payments

Salary / Wages Payments

Tally Solutions Pvt. Ltd. All Rights Reserved

Tally Solutions Pvt. Ltd. All Rights Reserved

Schedule VI -Balance Sheet

Tally Solutions Pvt. Ltd. All Rights Reserved

Schedule VI -Balance Sheet

Tally Solutions Pvt. Ltd. All Rights Reserved

Define Sch No for account heads.

Schedule-VI Profit & Loss A/c

Tally Solutions Pvt. Ltd. All Rights Reserved

Statutory Audit in Tally.ERP 9

Tally Solutions Pvt. Ltd. All Rights Reserved

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