Welcome to Lecture on

- Financial Accounts - Audit Inspection - Imprest Cash

Venue: ESTC/LallagudaDate: 9th September, 2009

Financial Accounts• Definition:

• “The art of recording, classifying and summarizing in a significant manner

• and in terms of money transactions • and events which are in part at least,

of a financial character, • and interpreting the results thereof”

» By The American Institute of Certified Public Accountants

Types of Accounts• 1) Personal Accounts Rule is

• Debit the Receiver and

• Credit the Giver.

• Eg: Mr.Gopal, M/s Krishna & co. etc.

• 2. Real Accounts - Rule is

• Debit what comes in and

• Credit what goes out.

• Eg: Cash, Buildings, Furniture etc

• 3) Nominal Accounts - Rule is

• Debit all expenses and losses and

• Credit all incomes and gains.

• Eg: Rent, Interest, Salaries, Insurance etc.

Accounting is the language of Business

• To make the language convey the same meaning to all people, as far as possible, and to make it full of meaning, accountants have agreed on basic concepts which they try to follow.

Audit Inspection• Comptroller and Auditor General

(CAG) of India is an authority created by the Constitution of India for conducting audit of the accounts of the Union, the States and the Union Territories.

• functions are derived in the main from Articles 149 to 151of the Constitution

• The Constitutional safeguards

• Article 148 of the Constitution provides that the C A G shall be appointed by the President under his hand seal and

• shall only be removed from office in like manner and on the like ground as a Judge of the Supreme Court.

• Railway Accounts- Separation from Audit - in 1929

• Under this arrangement, the Comptroller and Auditor-General have been relieved of the responsibility for compiling the accounts of Railway department.

• Director of Railway Audit.-The responsibility of the C A G for audit of Railway accounts is discharged through the Additional Deputy Comptroller and Auditor-General of India (Railways) and ex-officio Director of Railway Audit,

• who conducts the audit on behalf of and under the direction of C A G.

• He is assisted by Chief Auditors posted at head-quarters on each of the zonal Railways

• The Chief Auditor of a Railway is responsible for detailed audit of the accounts of that Railway and for conducting inspections of the records of the various offices of that Railway.

• This responsibility extends to all expenditure and receipts of that Railway whether under construction or open to traffic and to the account of stores, stock and manufacture.

• He audits interalia • (1) the financial sanctions, pertaining to

his Railway and offices under his audit, accorded by the various Railway authorities,

• (2) allocation of estimates sanctioned by those authorities,

• (3) general orders issued by the General Manager,

• (4) all sanctions pertaining to local traffic, (5) sanctions issued by the Railway Administration relating to interchange traffic between two railways

• Communications from Audit - Ordinarily, the results of statutory audit are communicated through-

• (1) Specific reports of the more important and serious irregularities discovered in the course of audit of accounts and departmental offices and station records.

• (2) Audit notes detailing minor irregularities discovered in the course of audit of accounts office records.

• (3) Inspection reports showing the results of audit of the initial records of executive offices and stations

CASH IMPREST

•An imprest is a standing advance of a fixed sum of money placed at the disposal of an individual to meet the following types of expenditure

• (1) Petty office expenses.• (2) Cost of raw materials for the diet

of indoor patients of hospitals.• (3) Emergent charges which cannot

be foreseen.• (4) Other petty expenses up to an

amount of Rs. 300/-in each case. Emergent petty advances, may also be made on the responsibility of the imprest holder out of imprest money placed at his disposal.

• The amount of an imprest must not be larger than is absolutely necessary.

• It should be reckoned at the lowest possible figure calculated to suffice for meeting charges of the nature and should be fixed in consultation with the Accounts Officer who will advise as to the appropriate amount of the imprest.

• The imprest account should be kept in duplicate,

• the counterfoil being kept by the imprest holder and

• the original, supported by the necessary vouchers, forwarded to the Accounts Officer from time to time as the holder of the imprest may require it to be replenished.

• The account should be closed ordinarily on the 27th of each month and recouped before the end of the month so as to ensure as many of the month's transactions as possible being included in the account.

THANK YOU