Audit Techniques of Sales Book and Sales Return Book.

Sales Book Vouching

Credit sales are recorded in the Sales Book. The auditor should have more technical and careful while vouching the credit sales as the documentary evidence. However, an effective system of Internal Check regarding credit sales should have the following features:

  • When order received, an entry of such order should be given in the order received book. So, separate book for the order to be maintained. The details of the order must be mentioned on the order book i.e date, name of the purchaser, name of ordered goods, date of delivery to be mentioned so that order can delivery in a timely manner.
  • A copy of such order to be sent to the dispatch department.
  • Dispatch department will confirm whether goods mentioned in the sales order are dispatched
  • Invoice to be prepared for the dispatched goods.
  • Invoice to be prepared in a duplicate or triplicate. One copy should be sent to the person who will update the sales book and this copy subsequently send to the customer for the payment received and remaining copy to be sent to the gate keeper or to be retained for the records.

Duties of Auditor while vouching the credit Sales

  • Auditor will collect sales order and will confirm whether the sales order are properly recorded in the sales-day-book
  • Auditor will collect relevant invoice and will confirm whether the invoice have been prepared in accordance with the price list of the company.
  • Auditor will confirm whether quantity mention in the sales order and purchase order are agreed.
  • Auditor will confirm whether relevant excise duty, sales tax or VAT have been charged in the invoices.
  • Auditor will check whether any discount have been given to the specific customer/customers. If found, auditor should ask relevant office order of such discount.
  • Auditor will confirm whether packing cost, freight and insurance have been charged as per the term of order received.
  • Auditor will confirm whether sales order are properly authorized
  • Auditor will confirm that sales of capital items are not recorded in the sales day book.
  • Auditor will collect the outstanding balance of the customers
  • Auditor will perform sample test to confirm whether sales amount are properly entered into customer’s ledger account.

Sales Return Book Vouching

Sales return book is also called return inwards book which is used for recording the credit sales which is subsequently returned. For the vouching of sales return book following techniques to be followed:

  • Auditor will check relevant credit notes
  • Auditor will confirm whether return goods are posted in the sales return book
  • Auditor Check casting and posting
  • Auditor will see whether proper explanation of return goods are stated.