While auditing the accounts of a big hotel, auditor will pay his special attention to the following points:
1- Examination of the system of internal check in operation in the business will be the first and the most important duty of the auditor.
He will thoroughly enquire into the system of internal check with regard to cash receipts and the preparation of customer’s bills.
2- Auditor will carry out complete checking of Cash Book and Pass Book. He may prepare Bank Reconciliation Statement to reconcile the amount of cash at bank as shown by both the books.
3- Auditor will vouch all payments made from the Cash Book and Petty Cash Book. He will check the posting of cash transactions to their respective ledger accounts.
4- Auditor will see that room rent receipts and bar receipts are recorded in separate accounts and are properly accounted for. He will vouch visitor’s ledger and the income there from. Auditor will be careful to examine that items paid out on account of visitors are properly recorded, charged and collected.
5- Auditor will carry out a detailed checking of the periodical posting from the window ledge into impersonal accounts in the general ledger.
6- Auditor will carry out a detailed voucher of wages, purchases and stock books. He will see that wages and salaries are properly paid, certified and receipted. He will verify the balances of creditors and debtors with the statements and confirmation letters received.
7- Auditor will see that adequate provision for depreciation of beddings, crockery, cutlery, utensils, furniture etc, has been made out of the profits of the business on a fair and consistent basis.
8- Auditor will carefully vouch capital expenditure. He will check that the rents realized from the rooms are properly accounted for.
9- Auditor will examine the terms and conditions of employment of those employees, who are entitled to free boarding and lodging.
Amount spent for the proprietors of the hotel shall be ascertained and treated by an auditor as their personal drawings.
10- In cases where there are several petty cash payments, auditor shall verify the balances of all of them simultaneously n order to prevent manipulations.
11- Auditor will see that the firm has made adequate reserve for redecoration expenditure in addition to provision for depreciation of the existing items.
12- In those cases where the firm has obtained furniture on hire purchase basis, auditor will see that revenue is duly charged with the internet on the hire portion of the instalment paid.
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