Para 3.23.2 — MSO (Audit)
Original Rule Text
3.23.2 The audit of workshop accounts includes not only the usual scrutiny of the admissibility of the payments and the correctness of the accounts, but also an examination of any cost accounts, where maintained, in order to test whether they are compiled according to sound and accepted principles and tally with the expenditure accounts. Any appreciable discrepancy between the aggregate of the expenditure charged to various jobs and the figures in the expenditure account should be investigated.
What This Means
Auditing workshop accounts goes beyond the routine check of whether payments are proper and accounts are correct. The auditor must also examine the cost accounts (where maintained) to verify they follow sound accounting principles and that the cost figures tally with the expenditure accounts. Any significant gap between what was charged to individual jobs and the total expenditure recorded must be investigated.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Workshop audit includes both payment admissibility and account correctness checks
- 2Cost accounts must be examined for adherence to sound accounting principles
- 3Cost accounts must reconcile with expenditure accounts
- 4Discrepancies between job-wise charges and total expenditure must be investigated
- 5This is more comprehensive than standard expenditure audit
Practical Example
A PWD workshop repairs 200 vehicles during the year. The cost accounting system shows Rs 45 lakh charged to individual repair jobs, but the expenditure account shows Rs 52 lakh in total workshop spending. The auditor must investigate the Rs 7 lakh discrepancy — it could be unallocated overhead costs, stores wastage, or a bookkeeping error that needs correction.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What are workshop cost accounts?▼
What constitutes an 'appreciable discrepancy'?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.