Para 5.1.11 — MSO (Audit)
Original Rule Text
5.1.11 Important points requiring attention during scrutiny of the Ledger Accounts are as follows:
(i) It should be seen that the Abstract for March in each year is supported by a brief statement explaining the circumstances in which each item outstanding for more than twelve months had remained unadjusted and the steps, if any, taken for their expeditious clearance.
(ii) The closing balance should be reviewed to verify that the relevant rules and orders governing their clearance have been observed.
(iii) Outstanding balances that have not been cleared within a reasonable period should form the subject of special enquiry.
(iv) It should be seen that the Divisional Officer has furnished, in the ‘Remarks’ Column, the details of the items making up the balances in cases where the outstanding balances exhibited in columns 12 and 13 comprise of more than one item.
- Review of Audit
What This Means
When reviewing Ledger Accounts, auditors must pay attention to several key points: ensuring the March year-end abstract explains any items outstanding for over twelve months, verifying that closing balances comply with clearance rules, investigating balances not cleared within a reasonable period, and checking that multi-item balances have proper itemized details in the Remarks column.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1The March abstract must explain items outstanding for more than 12 months and steps taken for clearance
- 2Closing balances must be reviewed against relevant rules and orders for their clearance
- 3Long-outstanding balances require special enquiry by the auditor
- 4When columns 12 and 13 contain multi-item balances, the Divisional Officer must furnish item-wise details
- 5This review ensures ledger accounts do not carry stale or unexplained balances indefinitely
Practical Example
An auditor reviewing the Ledger Account of a Forest Division finds Rs 8 lakh outstanding under 'Miscellaneous Advances' for 18 months. Since it exceeds 12 months, she checks if the March abstract contains an explanation. Finding none, she raises a special enquiry asking the DFO to explain why the advance remains unadjusted and what steps are being taken for recovery.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What constitutes a 'reasonable period' for clearing outstanding balances?▼
Why must multi-item balances be detailed in the Remarks column?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.