Internship Project Report
On
A STUDY ON AUDITING PRACTICES OF
K . GOPAL RAO & COMPANY
( Internship and Training 4th semester 30 days )
Submitted in partial fulfillment of the requirements for the award of
[Link] (Accounting and Finance ) Degree
Of
UNIVERSITY OF MADRAS
SUBMITTED BY
[Link] U16AFE033
SHRIMATHI DEVKUNVAR NANALAL BHATT VAISHNAV
COLLEGE FOR WOMEN
Re Accredited with A+ grade by NAAC
Chromepet , Chennai - 600044
2016-2019
Internship Project Report
On
A STUDY ON AUDITING PRACTICES OF
K . GOPAL RAO & COMPANY
( Internship and Training 4th semester 30 days )
Submitted in partial fulfillment of the requirements for the award of
[Link] (Accounting and Finance ) Degree
Of
UNIVERSITY OF MADRAS
SUBMITTED BY
[Link] U16AFE033
SHRIMATHI DEVKUNVAR NANALAL BHATT VAISHNAV
COLLEGE FOR WOMEN
Re Accredited with A+ grade by NAAC
Chromepet , Chennai – 600044
2016-2019
CERTIFICATE
This is to certify that the internship report on “ A Study on Auditing Practices of
K . GOPAL RAO & COMPANY ” submitted by [Link] in partial
fulfillment of curriculum of [Link] ( Accounting and Finance ) course 2016 – 2019 , Shrimathi
Devkunvar Nanalal Bhatt Vaishnav College for Women , Chennai – 600044 is her original work.
Class Incharge Internal Examiner Head of the Department
[Link] (Accounting and Finance)
ACKNOWLEDGEMENT
I extend my heartfelt thanks to my principal Dr.(Tmt.) [Link], Msc., [Link]., Ph.D.,
for giving me an opportunity to study in this esteemed institution.
I would like to express my acknowledgement to Dr. R. Savithri, [Link]., [Link]., Ph.D., Head,
Research Department of Commerce and Dean of Commerce.
I would like to express my sincere thanks to the Head of the Department of [Link]
(Accounting and Finance) Dr. Y. Kalaivani, [Link]., [Link]., Ph.D., for ensuring the
opportunity and sufficient permission to completion of the work.
DECLARATION
I, [Link] (U16AFE033), a bonafide student of III [Link] (Accounting and
Finance), Shrimathi Devkunvar Nanalal Bhatt Vaishnav College for Women , Chennai -600044
would like to declare that the internship project titled “A STUDY ON ACCOUNTING
PRACTICES OF [Link] RAO AND COMPANY” in partial fulfillment of [Link]
(Accounting and Finance) is my original work.
PLACE :
DATE :
SIGNATURE OF THE STUDENT
CONTENTS
[Link] TITLE PAGE NO
1 INTRODUCTION 1-2
COMPANY PROFILE 3
2 NATURE OF WORK 4-10
3 CONCLUSION 11
INTRODUCTION
INTRODUCTION
INTERNSHIP
Internship is a practical experience opportunity offered by companies, to willing and capable
beginners of a profession, for a fixed term. Internship is normally offered to the students which
helps them to learn the practical impact of their study. It gives us the opportunity to apply our
theoretical knowledge. It means getting trained along with studies. It is also like “on the job
training”. It is like a practice manual. They are typically undertaken by students and graduates
looking to gain relevant skills and experience in a particular field. Employers benefit from these
placements because they often recruit employees from their best interns, who have known
capabilities, thus saving time and money in the long run.
AUDITING
The origin of auditing may be traced back to the 18th century when the practice of large-scale
production was developed as a result of Industrial Revolution. It is found that some systems of
checks and counter checks were applied for maintaining accounts of public institutions, as early
as the days of the ancient Egyptians, the Greek and the Romans.
The growth of Accounting profession in India is of a quite recent origin. It was an outcome of the
Indian companies Act, 1913 which prescribed for the first time the qualifications of an auditor.
Due to rapid growth in the size of business firms, it has become necessary that the accounts must
be checked and audited by an independent person, known as auditor especially in case of joint-
stock companies where the shareholders are drawn from far off places. That is why it becomes
necessary to assure them that their investment is safe and that the directors and the managing
directors etc. handling capital and accounts, have presented true and correct accounts.
Audit is the examination or inspection of various books of accounts by an auditor followed by
physical checking of inventory to make sure that all departments are following documented
system of recording transactions. It is done to ascertain the accuracy of financial statements
provided by the organization.
Auditing has generally been associated with only accounting and financial records. It involves
evaluation of the relevance, reliability and adequacy of evidence in support of verifiable
information. It is analytical, critical and investigative. It ensures reliability of information and
authenticity of assertions made in the financial statements relating to enterprises, whether profit-
oriented or not and whether it is required by law or not, to enable the auditor to form his opinion
on these statements with regard to true and fair view disclosed there in.
Audit is done by an independent qualified person. It is done with the help of vouchers,
documents, information and explanations received from the clients. The auditor satisfies himself
with the authenticity of the financial accounts prepared for a particular period. Auditor also
reports that the Profit and Loss account and the Balance Sheet exhibits a true and fair view of the
state of affairs of the concern for the financial year.
2
COMPANY PROFILE
The firm K. GOPAL RAO & CO., is a partnership firm. It is headquartered
at CHENNAI with a branch office at Thiruvallur and having associate offices at Madurai,
Tiruchirappalli, Bengaluru and Hyderabad. The company is also primarily engaged in
Statutory, Internal, Management, Tax Audit. It is also obtaining approval from the Foreign
Investment Promotion Board (FIPB) / Ministry of Finance - Government of India for
establishing companies in India.
The firm also Draft and Finalise the Foreign Collaboration Agreements. The firm is also
expertise in issuing Financial Statement to Consulates for Client's Visa purposes. The firm
also helps in designing Accounting system for new ventures. It carries out secretarial
practices including maintenance of documents and representation before Department of
Company Affairs such as Registrar of Companies and Company Law Board.
ORGANIZATIONAL STRUCTURE
FOUNDER
CA. K. GOPAL RAO
PARTNERS
CA. B. MEERA GOPALAN
CA. GOPAL KRISHNA RAJU
CA. MADAN GOPAL NARAYANAN
3
NATURE OF WORK
INTERNAL AUDIT
Internal audit refers to the department located within a business that monitors the efficacy of
its processes and controls. The internal audit function is especially necessary in larger
organizations with high levels of process complexity, where it is easier for process failures
and control breaches to occur. Internal audit is especially necessary in a publicly-held
business, which must attest to the robustness of its systems of internal [Link] internal
audit staff is responsible for the following:
Fraud detection
Internal control assessments
Legal and regulatory compliance
Process assessments
Risk assessments
Safeguarding of assets
The internal audit manager schedules audit work, usually focusing on high-risk areas. Other
examinations may be conducted as directed by the audit committe of the board of directors ,
or as requested by department managers. The areas being targeted for an examination are
normally given advance notice, so that they can assemble all required documents for the
internal audit team.
Internal audit is not simply a watchdog that monitors a business and flags problems. It can
also act as an internal consulting department that adds value to company operations. It does
so by highlighting opportunities for improvement and facilitating changes within the
organization.
Internal auditors work for government agencies (federal, state and local); for publicly traded
companies; and for non-profit companies across all industries.
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VOUCHER :
Written instrument that serves to confirm or witness for some fact such as transaction.
Commonly, a voucher is a document that shows goods have bought or services have been
rendered, authorizes payment and indicates the ledger accounts in which these transactions have
to be recorded.
A voucher ia an internal document describing and authorizing the payment of a liability to a
supplier. It is most commonly used in a manual payment system. A voucher typically contains
the following information:
The identification number of the supplier
The amount to be paid
The date on which the payment should be made
The accounts to be charged to record the liability
Any applicable early payment discount terms
An approval signature or stamp
Voucher information may be filed, where the basic voucher document is attached to the supplier
invoice, evidence of receipt and purchase order. This file is useful for keeping related
documents in one place and makes it easier to both justify and audit payables transactions
CASH VOUCHER
A cash voucher is a standard form used to document a petty cash payment. When someone
wants to withdraw cash from the petty cash fund, that person fills out the cash voucher to
indicate the reason for the withdrawal, and receives cash from the petty cash custodian in
exchange.
If the person requesting cash is doing so because he or she wants reimbursement for an
expense they already paid for from their own funds, then they should also staple the relevant
receipt from the original purchase transaction to the cash voucher. The vouchers are then
stored as accounting records.
The petty cash custodian uses the cash voucher to reconcile the petty cash fund. By adding
together all on-hand cash with the amounts stated on the cash vouchers, the total should
equal the designated cash total for the petty cash fund.
The cash voucher form should contain space for the name of the cash recipient, that person's
initials, the amount of cash disbursed, the date, the reason for the disbursement, and the
account code to which the disbursement should be charged. The forms may also be
prenumbered, in order to ensure that all forms have been accounted for.
The internal audit staff may schedule a review of cash vouchers, to see if the items
reimbursed comply with the company's policy for petty cash use.
DAY BOOK
A daybook is a book of original entry in which an accountant records transactions by date,
as they occur. This information is later transferred into a ledger, from which the information
is summarized into a set of financial statements. Daybooks are only used in a manual
accounting environment, and so are not commonly found in a modern accounting
environment.
PURCHASE DAY BOOK
The purchases day book is an accounting ledger in which purchasing transactions are
recorded. This book is most commonly found in manual accounting systems, where
purchases are recorded by hand in a ledger. The purchases day book is used to keep
purchasing transactions from overwhelming the general ledger, which can be a major
problem in a manual record keeping environment. The basic information recorded in a
purchases day book is as follows:
Transaction date
Name of the supplier
Supplier invoice number
Supplier invoice amount
At regular intervals, and always at the end of a reporting period, the transactions in the day
book are summarized and carried forward (posted) to the general ledger. If anyone were to
research a transaction, they would need to return to the day book in order to find the
specifics of a transaction.
SALES DAY BOOK
The sales day book is a manually-maintained ledger in which is recorded the key detailed
information for each individual credit sale to a customer, including:
Customer name
Invoice number
Invoice date
Invoice amount
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CASH RECEIPT
A cash receipt is a printed statement of the amount of cash received in a cash sale
transaction. A copy of this receipt is given to the customer, while another copy is retained
for accounting purposes. A cash receipt contains the following information:
The date of the transaction
A unique number that identifies the document
The name of the payer
The amount of cash received
The payment method (such as by cash or check)
The signature of the receiving person
NEFT
National Electronic Funds Transfer (NEFT) is an Indian system of electronic transfer of money
from one bank or bank branch to [Link] banks or their branches that support such
transactions have to participate in the NEFT network. An updated list of banks and branches that
are NEFT-enabled can be found on the Reserve Bank of India (RBI) website. Customers with
Internet banking accounts can use the NEFT facility to transfer funds nationwide on their own.
RECURRING DEPOSIT
Recurring Deposit is a special kind of Term Deposit offered by banks in India which help people
with regular incomes to deposit a fixed amount every month into their Recurring Deposit account
and earn interest at the rate applicable to Fixed Deposits. It is similar to making FDs of a certain
amount in monthly installments, for example 1000 every month. This deposit matures on a
specific date in the future along with all the deposits made every month. Thus, Recurring Deposit
schemes allow customers with an opportunity to build up their savings through regular monthly
deposits of fixed sum over a fixed period of time. Minimum Period of RD is 6 months and
maximum is 10 years.
DEBIT NOTE
A debit note is a document sent by a buyer to a seller, or in other words, a purchaser to a vendor
while returning goods received on credit. This notifies that a debit has been made to their
accounts.A debit note is issued for the value of the goods returned. In some cases, sellers are seen
sending debit notes which should be treated as just another invoice.
CREDIT NOTE
A credit note is a document sent by a seller to the buyer or, in other words, a vendor to a
purchaser, notifying that a credit has been made to their account against the goods returned by
the [Link] notifies that the currency value in question is credited to the buyer’s account (on
records). A credit note is issued for the value of goods returned by the customer, it may be less
than or equal to total amount of the order.
CHEQUE CLEARANCE
Cheque clearing or bank clearance is the process of moving a cheque from the bank in which it
was deposited to the bank on which it was drawn, and the movement of the money in the
opposite direction. This process is called the clearing cycle and normally results in a credit to the
account at the bank of deposit, and an equivalent debit to the account at the bank on which it was
drawn. If there was not enough funds in the account when the cheque arrived at the issuing bank,
the cheque would be returned as a dishonoured cheque marked as non-sufficient funds.
Know your customer is the process of a business verifying the identity of its clients and assessing
potential risks of illegal intentions for the business relationship. The term is also used to refer to
the bank regulations and anti-money laundering regulations which govern these activities.
.E-FILING
Electronic filing is the process of submitting tax returns over the Internet using tax preparation
software that has been pre-approved by the relevant tax authority, such as the IRS or the Canada
Revenue Agency. E-filing has manifold benefits which have made this system of tax preparation
increasingly popular in recent years; the taxpayer can file a tax return from the comfort of his or
her home, at any convenient time, once the tax agency begins accepting returns.
A taxpayer also has the option of filing the return himself using tax preparation software with e-
filing properties, or can hire the services of tax professionals who also use the software to file an
individual’s or business tax. A benefit of e-filing is that the tax filer receives a confirmation or
rejection notice within 24 hours of transmitting the electronic documents. The confirmation is
proof that the documents have been received and is in process, while the rejection is notice to the
tax payer that his or her return has not been accepted by the Internal Revenue Service (IRS). The
rejection notice will include information on what needs to be corrected on the return so that it is
acceptable. In addition to the prompt confirmation notice, since e-filed returns can be processed
much faster than paper returns, the taxpayer can generally expect a faster tax refund if
applicable.
10
CONCLUSION
From my internship, I learnt about internal audit of public sectors. I could understand about the
audit programmes and methods in it. They helped me in gaining knowledge and taught me
about auditing. Through my internship, I gained confidence that I could be a responsible cost
accountant.
11