Overview of the Organization

Mr. Mohammad Kaleem Rathor, CA Incorporation in 1971. Mr.Rathor, a practicing chartered

accountant and member of the Institute of Chartered Accountants of Pakistan (ICAP), Mr. Rathor,
who is conducting his business in Lahore under the name Kaleem and Company chartered
accountants. he was required to do under Section 255 of the Companies Ordinance.
The provisions of the Companies Ordinance are mandatory and it is the responsibility of the auditor to
ensure that the audit is conducted in the manner provided in the Ordinance and to report
noncompliance’s/contraventions of mandatory requirements to members of companies. It is also
the responsibility of the auditor to bring to the notice of members, major breaches observed in the
financial statements. Rathor to be more careful and cautious in future and to perform his duties
with a reasonable degree of care and skill
How this organization reached current position
Unlike its competitors Kaleem & Co is not an association of firms but a partnership of women and
men. This elective model grants our strength and stability. Our DNA was built around four pillars
defined by Mr. Abdul Kaleem himself: skills, independence of mind, sharing and tolerance.
Business Portfolio
The firm is specialist in providing the high quality services regarding Audit and Accountancy, Sales
Tax and Income Tax, Consultancy and multiple tax issues and having a wide range of expertise.
Firm is providing its extensive expertise in various industries as;
3.1 Sugar sector
Rasool nawa sugar mills (PVT) limited.
Baba freed sugar mills (PVT) limited.
Ittefaq sugar mills (PVT) limited
Ramzan sugar mills limited
Habib sugar mills limited
Mirpurkhas sugar mills limited.
Textile sector
3.3 Engineering sector
3.4 Trusts
Ittefaq host
Sharif trust
Schools
Feed sectors
Kashmir feed limited.
Sharif feed limited.
Steel industry sectors
Ittefaq iron
Major Competitors
Kabani and company chartered accountants
Baker Tilly mahmood idrees qamar chartered
Riaz Ahmed company chartered accountants
Iqbal yasir company chartered accountants

Strategic orientation
Vision Statement
To be the most highly respected professional firm in the region where clients come for the peace of
mind that their interests are being cared for by a team that enjoys working with them and one
another

Mission Statement
To provide businesses, entrepreneurs and individuals with the highest quality accounting,
auditing, tax planning and business advisory services delivered in a timely, efficient and
innovative manner by a professional team that clearly enjoys working together to exceed
their clients' needs.
5.3. Objectives

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Our main objective is to be the best certified public accounting firm in the areas where we compete.
We strive to help our clients strengthen their operational efficiency and increase their profits. To
accomplish this, we dedicate ourselves to the following four principles:

Quality Services
We attempt to hire only competent individuals and evaluate them regularly. We offer competitive
compensation, ongoing training, and several opportunities for advancement through specialization
in the services we provide to clients.

Timely Services
Our team members must meet deadlines without sacrificing quality.

Growth
We work to expand the Firm, both in size and in the range of services we offer. As we become skilled
in new areas, we are able to recommend additional services to existing, as well as prospective,
clients.

Personal Fulfillment
We hire individuals who are self-starters and whose personalities complement others in the Firm, thus
creating an environment where each person can develop his or her career potential at whatever
pace he or she chooses.

5.4. Core Values

We promote a “Firm Concept,” where clients are served by individual staff members operating as a
team, providing each client with a sufficient number of individuals familiar with their engagement
to effectively manage any situation that may arise. We strategically assign our team members to
client engagements to ensure that all work receives the appropriate level of professional expertise
and academic background.
We develop our practice by expanding services to existing clients while offering a full range of
services to new clients. We take a personal interest in our clients and their organizations, and work
diligently to understand their business and the competitive environment in which they operate. We
strive to be the kind of firm with whom employees, clients, and other professionals are proud to
associate.

Major five files uses in audit procedure.

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THIRD SCHEDULE (Section 156)
FORM A- ANNUAL RETURN OF COMPANY HAVING SHARE CAPITAL

1 Registration No.
2 Name of the Company

3 Form A made up to
(Day/Month/Year)
4 Date of AGM
(Day/Month/Year)

PART-A

5 Registered office address:

6 Email Address:
7 Office Tel. No.:
8 Office Fax No.:
9 Nature of Business:

10 Authorized Share Capital

Type of Shares No. of Shares Amount Face Value
Ordinary Shares

11 Paid up Share Capital

Type of Shares No. of Shares Amount Issue Price
Ordinary Shares
12 Amount of indebtedness on the date upto which form A is made in respect of all
Mortgages/Charges
13 Particulars of the holding company
Name
Registration No. % Shares Held
14 Chief Executive
Name NIC
Address
15 Chief Accountant
Name NIC
Address
16 Secretary
Name NIC
Address
17 Legal Adviser
Name
Address
18 Auditors
Name
Address
19 List of Directors on the date of Form-A
Name of Director Address Nationality NIC (Passport No. if foreigner)
1.
2.
3.
4.
5.
6.
7.
8.
9.
PART-B

20. List of members & debenture holders on the date upto which this Form A is made
Folio Name Address Nation- No. of NIC (Passport No. if foreigner)
ali sh
ty ar
es
Members

Debenture
holders
Separate sheet, if necessary

21. Transfer of shares (debentures) since last Form A was made

Name of Transferor Name of Number of shares Date of registration of
Transferee transferred transfer
Members

Debenture holders

Separate sheet, if necessary

I certify that this return and the accompanying statements state the facts correctly and completely as on
the date up to which this Form-A is made

Date Day Month Year Signature

Designation (Please tick) Chief Executive/Secretary
Subordinated loans
Subordinated debt is a loan or security that ranks below other loans and securities with regard to
claims on a company's assets or earnings. Subordinated debt is also known as a junior
security or subordinated loan. In the case of borrower default, creditors who own
subordinated debt won't be paid out until after senior debt holders are paid in full.

Deferred tax
A deferred tax liability is an account on a company's balance sheet that is a result of temporary
differences between the company's accounting and tax carrying values, the anticipated and
enacted income tax rate, and estimated taxes payable for the current year. This liability may be
realized during any given year, which makes the deferred status appropriate.
Because there are differences between what a company can deduct for tax and accounting purposes,
there is a difference between a company's taxable income and income before tax. A deferred tax
liability records the fact the company will, in the future, pay more income tax because of a
transaction that took place during the current period, such as an installment sale receivable
Short Term Borrowing
Short-term debt is an account shown in the current liabilities portion of a company's balance sheet.
This account is made up of any debt incurred by a company that is due within one year. The debt
in this liabilities account is usually made up of short-term bank loans taken out by a company,
among other types.
Examples:
Short-term bank loans
These loans often arise when a company sees an immediate need for operating cash. ...
Accounts payable.
This refers to money owed to suppliers or providers of services. ...
Wages. These are payments due to employees.
Lease payments. ...
Income taxes payable
Inappropriate loss
Balance sheet working paper
Working papers are used to document the information gathered during an audit. These working
papers provide evidence that sufficient information was obtained by an auditor to support his or
her opinion regarding the underlying financial statements
Lead Schedule (Head of lead Schedule)
A document that serves as a summary or index of information contained in specific accounting
schedules, balances sheets, or reports. The information contained within the lead schedule is
cross-referenced to the information found on the specific reports. This simplifies the
reconciliation process during an audit.

Top page
Total information related the account Decreasing or increasing.

Summary page
Use the audit summary as the starting point for a analysis of an audit.

Movement detail
If your company records its inventory as an asset, and it undergoes an annual audit, then the
auditors will be conducting an audit of your inventory. Given the massive size of some
inventories, they may engage in quite a large number of inventory audit procedures before
they are comfortable that the valuation you have stated for the inventory asset is reasonable.
Here are some of the inventory audit procedures that they may follow:

Cutoff analysis.
The auditors will examine your procedures for halting any further receiving into the warehouse or
shipments from it at the time of the physical inventory count, so that extraneous inventory
items are excluded. They typically test the last few receiving and shipping transactions prior
to the physical count, as well as transactions immediately following it, to see if you are
properly accounting for them.

Observe the physical inventory count.

The auditors want to be comfortable with the procedures you use to count the inventory. This
means that they will discuss the counting procedure with you, observe counts as they are
being done, test count some of the inventory themselves and trace their counts to the amounts
recorded by the company's counters, and verify that all inventory count tags were accounted
for. If you have multiple inventory storage locations, they may test the inventory in those
locations where there are significant amounts of inventory. They may also ask for
confirmations of inventory from the custodian of any public warehouse where the company is
storing inventory.
Reconcile the inventory count to the general ledger.
They will trace the valuation compiled from the physical inventory count to the company's general
ledger, to verify that the counted balance was carried forward into the company's accounting
records.

Test high-value items.

If there are items in the inventory that are of unusually high value, the auditors will likely spend
extra time counting them in inventory, ensuring that they are valued correctly, and tracing
them into the valuation report that carries forward into the inventory balance in the general
ledger.

Test error-prone items.

If the auditors have noticed an error trend in prior years for specific inventory items, they will be
more likely to test these items again.

Test inventory in transit.

There is a risk that you have inventory in transit from one storage location to another at the time
of the physical count. Auditors test for this by reviewing your transfer documentation.

Test item costs.

The auditors need to know where purchased costs in your accounting records come from, so they
will compare the amounts in recent supplier invoices to the costs listed in your inventory
valuation.

Review freight costs.

You can either include freight costs in inventory or charge it to expense in the period incurred,
but you need to be consistent in your treatment - so the auditors will trace a selection of
freight invoices through your accounting system to see how they are handled.

Test for lower of cost or market.

The auditors must follow the lower of cost or market rule, and will do so by comparing a
selection of market prices to their recorded costs.

Finished goods cost analysis

If a significant proportion of the inventory valuation is comprised of finished goods, then the
auditors will want to review the bill of materials for a selection of finished goods items, and
test them to see if they show an accurate compilation of the components in the finished goods
items, as well as correct costs.

Direct labor analysis.

If direct labor is included in the cost of inventory, then the auditors will want to trace the labor
charged during production on time cards or labor routings to the cost of the inventory. They
will also investigate whether the labor costs listed in the valuation are supported by payroll
records.

Overhead analysis
If you apply overhead costs to the inventory valuation, then the auditors will verify that you are
consistently using the same general ledger accounts as the source for your overhead costs,
whether overhead includes any abnormal costs (which should be charged to expense as
incurred), and test the validity and consistency of the method you use to apply overhead costs
to inventory.

Work-in-process testing
If you have a significant amount of work-in-process (WIP) inventory, the auditors will test how
you determine a percentage of completion for WIP items.

Inventory allowances
The auditors will determine whether the amounts you have recorded as allowances for obsolete
inventory or scrap are adequate, based on your procedures for doing so, historical patterns,
where used reports, and reports of inventory usage (as well as by physical observation during
the physical count). If you do not have such allowances, they may require you to create them.

Inventory ownership
The auditors will review purchase records to ensure that the inventory in your warehouse is
actually owned by the company (as opposed to customer-owned inventory or inventory on
consignment from suppliers).

Inventory layers
If you are using a FIFO or LIFO inventory valuation system, the auditors will test the inventory
layers that you have recorded to verify that they are valid.
If the company uses cycle counts instead of a physical count, the auditors can still use the
procedures related to a physical count. They simply do so during one or more cycle counts,
and can do so at any time; there is no need to only observe a cycle count that occurs at the
end of the reporting period. Their tests may also evaluate the frequency of cycle counts, as
well as the quality of the investigations conducted by counters into any variances found.
The extent of the procedures employed will decline if inventory constitutes a relatively small
proportion of the assets listed on a company's balance sheet.

Vouching Sheet
Vouching of Impersonal Ledger. It is an important part of the auditor's, duty to vouch the impersonal
ledger which contains accounts from which trading and profit and loss accounts and the
balance sheet are prepared. The impersonal ledger has two kinds of accounts -Nominal accounts
& real accounts.

Supporting
Audit documentation is the written record of the basis for the auditor’s conclusions that provides
the support for the auditor's representations, whether those representations are contained in
the auditor's report or otherwise.

Required supporting documents during the audit

The objective of this audit will be to verify the cost statements submitted to the Commission. All
documentation concerning costs charged should be available in full detail. In cases where the
following cost categories have been charged to the project, the documentation listed below should
be presented in particular.

Personnel costs
Employment contracts (or other independent/legal justification of personnel costs claimed) - Ledgers /
accounts, payroll records - Time sheets - Detailed breakdown and justification of the productive
hours denominator used for calculation of hourly rates (personnel and overhead)

Overheads costs
Full documentation concerning the calculation of the overhead costs and the back-up documentation
thereto - Analysis, reconciliation and summary of final breakdown of overhead costs (by category
of expense) charged to the project(s) subject to audit

Equipment / Consumables
Invoices - Proof of payment - In case of rented equipment: Rental contract, inventory list of the rented
equipment; proof of the investment values of the rented equipment - Records concerning
computer usage, if applicable

Third Party Assistance

Sub-contracts Invoices Proof of payment Original deliverables from the sub contractors -Evidence of
own internal management and supervision procedures to confirm completion of work required to
specifications needed and reasonableness costs claimed in connection therewith
Travel expenses.
Invoices - Mission approval forms - A report, records, minutes etc. indicating purpose and participants
of the meetings / events.

Bank Statements
In case you are coordinator of the contract(s) bank statements relating to the payments of EC
contribution, and the distribution to the contract partners

General Ledger / Management accounts

Salient extracts and reconciliations of costs claimed back to underlying accounting records/general
ledger to facilitate easy and swift verification of costs claimed and their eligibility

Auditor certificates
Copies of any auditor certification statements issued with a claim for cost reimbursement Ledge
the ledger provides a complete record of financial transactions over the life of the company.
The ledger holds account information that is needed to prepare financial statements and includes
accounts for assets, liabilities, owners' equity, revenues and expenses.

Tax Calculation
Input tax
Input VAT is the value added tax added to the price when you purchase goods or services that are
liable to VAT. If the person or businesses that is buying is registered for VAT they can deduct the
amount of VAT paid from his/her settlement with the tax authorities.
Output tax
Ad valorem tax charged on the selling price of taxable goods or services, and is payable by the
customer. Value added tax (VAT) charged by businesses is an output tax that is distinguished from
the VAT paid by them, which is their input tax.
Tax evasion
Tax evasion is an illegal practice where a person, organization or corporation intentionally avoids
paying his true tax liability. Those caught evading taxes are generally subject to criminal charges
and substantial penalties. To willfully fail to pay taxes is a federal offense under the Internal
Revenue Service (IRS) tax code.

Sales Reconciliation
Reconciliation is an accounting process that uses two sets of records to ensure figures are correct and
in agreement. It confirms whether the money leaving an account matches the amount that's been
spent, ensuring the two are balanced at the end of the recording period. The purpose of
reconciliation is to provide consistency and accuracy in financial accounts.
Purchase verification
Vouching is a technical term, which refers to the inspection of documentary evidence supporting and
substantiating a transaction, by an auditor. It is the essence of Auditing It is the practice followed
in an audit, with the objective of establishing the authenticity of the transactions recorded in the
primary books of account.
It essentially consists of verifying a transaction recorded in the books of account with the relevant
documentary evidence and the authority on the basis of which the entry has been made; also
confirming that the amount mentioned in the voucher has been posted to an appropriate account
which would disclose the nature of the transaction on its inclusion in the final statements of
account. Vouching does not include valuation.

Control Sheet
Internal control, as defined in accounting and auditing, is a process for assuring achievement of an
organization's objectives in operational effectiveness and efficiency, reliable financial reporting,
and compliance with laws, regulations and policies Aging

Types of sampling
Statistical sampling
A statistical method provides an objective measure of risk, optimizes the sample size, and is best
for a population of a large number of homogeneous transactions. Sampling is the application
of auditing procedures to less than 100 percent of the population and the projection of
the sample results to the population.

Non Statistical sampling

Non-statistical sampling is the selection of a test group that is based on the examiner's judgment,
rather than a formal statistical method.
Learning as a student intern
During this entire period internship I got a good knowledge the working environment and how they
are working. As it is written in the report that amtex has its own spinning and weaving. Students
in charge send me lead Schedule.
Following are the duties which were assign to me internship training.
Lead Schedule (Head of lead Schedule)
1-Top page
2-Summary page
3-Movement detail
4-Vouching Sheet
5-Supporting
6-Ledger
These duties which my supervisor assigned me during my internship training