The primary object of such an audit is to give an idea to the advertisers about the effectiveness of their advertisements. In order to eliminate the effect of temporary factors contributing to sudden increase or decrease in circulation of a newspaper, it is always better to select short durations, say a month or a quarter of the year, for the purposes of investigation in the accounts of a newspaper. Auditor must remain on guard throughout his work against attempts made to show a false increase in the circulation of a newspaper by including the names of dummy subscribers. Leading advertisers in the country have set up an Audit Bureau, which has developed the procedure to be followed by auditors while conducting such audit.
The audit programme for verifying the circulation of a newspaper will be on the following lines:
1- Auditor will verify the number of copies printed from the printers voucher and the entry for the issue of newsprint to the press out of the stock held by the company.
2- Auditor will pay greater attention to the verification of the record of the issue of the copies of the newspaper. He shall examine the subscribers list for the copies issued to subscribers, dispatch notes sent to the news agents to verify copies issued to them.
3- Auditor will examine the copies of bills issued and the record of copies of newspaper issued to the subscribers, news agents, hawkers etc, in order to verify the accuracy of debit entries passed into their ledger accounts.
4- Auditor will then proceed to vouch cash collections, the duplicates of the receipts issued and the credit entries passed therefore into the accounts of various types of the customers.
5- All additions and deletions to the subscribes list should be examined carefully in order to confirm that the list contains only the names of genuine subscribers to whom the newspaper had been issued.
6- Total of the copies issued daily should be compiled from the financial records of sales and distribution and should be compared and reconciled with the total number of copies printed. Causes for wide discrepancy in two figures should be enquired into.
Average daily issues will constitute the total circulation of the newspaper. On deduction of free circulation copies, auditor will get the total of the net paid circulation.
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