Auditing Audit of Shipping Company – tryspring

By | February 22, 2019

Auditing – Audit of Shipping Company

The following points need to be considered while conducting audit
of Shipping Company −

  • As per appointment letter Auditor should know the scope of
    his audit work along with legal requirements to prepare his
    audit Program accordingly.

  • An Auditor should study the Articles of Association.

  • He should also study the contracts between Captains of ship
    and third parties.

  • An Auditor should thoroughly study the internal control
    system and should prepare his audit Program accordingly.

  • He should ensure that separate account has to be maintained
    for each voyage.

  • He should verify that all revenue expenses are to be charged
    to Voyage account and all incomes should be credited to
    Voyage account.

  • Separate ledger account for each voyage should be maintained.

  • Transactions relating to foreign exchange must be duly
    incorporated in the books of accounts.

  • An Auditor should ask for advices from agents and receiving
    officers to vouch freight charges paid. He should also verify
    the provisions relating to outstanding freight amount.

  • Proper depreciation should be charged for each ship.

  • Auditor should verify the rates of freight, commission and
    brokerage etc.

  • Proper allocation of insurance premium of each voyage is very
    much important. Balance amount of unexpired insurance should
    be carried forward. The claim received on account of
    insurance should also be properly accounted for.

  • Proper adjustment and accounting is must for outstanding
    liabilities and assets.

  • He should ensure that the capital expenditure should not be
    charged to revenue account and vice versa.

  • Heavy amount of repair and expenditure should be treated as
    deferred revenue expenditure.

  • He should verify the title deed of ships and other related
    documents on account of purchase of ships.

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