Adit of an educational institution

Auditor should take following steps while doing the audit of an educational institution.

1. APPOINTMENT

He should check that his appointment is in order and should receive the letter of appointment.

2. RULES

He should study the legislation and rules governing the institution care fully. These can be had from the charter deeds and minute books of the institution.

3. CHECKING THE EFFICIENCY OF THE INTERNAL CONTROL SYSTEM

Auditor should check the efficiency of internal control system regarding cash and other assets. It should be checked that proper internal check system exists for cash collection.

4. VERIFIVATION OF THE INCOME AND EXPENDITURE ACCOUNT

INCOME

The main source of income for an education is fee received from students.
Following steps should be taken to verify fee collection.

• Checking student fee register.
• Collected fee should be classified among different heads. Such as tuition fee, library that correct amount is transferred in respective accounts.
• Auditor should vouch the cashbook with fee register to check that proper fee received has been allotted.
• He should check the late fee concession and the number of students to whom it has been allotted.
• He should check the late fee collection and fines collected from students.
5. CHECKING OF GRANTS AND RECEIPTS FOR CAPITAL NATURE
• Auditor should check the various grants received by the institution. Proper use of these grants should also be checked.
• The capital receipts should be capitalized and shown separately.

6. CHECKING OF THE EXPENSES ITEMS

• Auditor should check the expense items with their respective vouchers.
• Authorization to these expenses should be confirmed.
• It should be checked that internal check system is present in case of heavy expense items.

7. CHECKING THE ASSETS AND LIABILITIES

ASSETS

• Fixed assets should be checked with fixed asset register maintained. Their physical verification value depreciation should be checked.
• Any new assets purchased should be verified.
• Investments if any should be properly verified.
• Cash in hand and cash at bank should be verified.

Liabilities

• Long-term liabilities should be verified with their relevant papers.
• Short-term liabilities should be verified with their balance and respected papers.
• It should be ensured that the liabilities belong to the institution under audit.

Audit of a Hospital

Following special points must be considered while doing the audit of a hospital:

GENERAL

• The nature of the entity must be understood. It may be a sole proprietorship a partnership firm or a company. Auditor should make his audit programmed accordingly.
• Auditor should study the minutes of the meetings of the board of directors. It will provide information regarding the decisions made by the entity.
• He should study the internal control system present in the entity. It should be decided that whether reliance can be placed on it or not.

INCOME

• The main source of income of hospital is receipts from patients. The receipts of bills should be checked with the cashbook entries.
• Other source of receipts may be grants from different parties. These should be verified with their respective counterfoils and correspondence between the parties.
• Other receipts may be form rents, interest or dividends. These may be checked with their respective vouchers.

PAYMENTS

• All the purchase should be checked with their respective purchase invoices.
• Other items of expenditure should be vouched with their respective supporting papers.
• Proper division between the capital and revenue expenditure should be made.

ASSETS AND LIABILITIES

• Auditor should check the assets and liabilities appearing in the balance sheet on the date of the balance sheet. It should be checked that they are shown at true value. Proper depreciation should be provided on the assets.
• Asset and liabilities should be actually physically verified by the auditor on the balance sheet date if possible.
• It should be checked that the balance sheet and profit and loss account have been drawn according to the provisions of the act applicable to the business entity.

Mangement Audit and its objects.

Management audit is a comprehensive and complete examination of all managerial functions and the effective use of their total resources in achieving the goals of an organization.

According to Taylor and Perry “Management auditing is a method to evaluate the efficiency of management at all levels throughout the organization in order to ascertain whether sound management prevails throughout, and also to report on its effectiveness and on its improvement”.

Management audit aims at finding out the defects and irregularities present in the business organization and trying to remove them. So that the goals of the business organization can be achieved most efficiently and effectively.

OBJECTS OF MANAGEMENT AUDIT-

1. To point out the defects and irregularities present in the system and also to suggest improvements in it.

2. To help the organization to achieve in working.

3. To help in achieving the ultimate goal of the organizational activity most efficiently,

4. To remove the wastage and ultimate and leakage present in the system.

Process of Management Audit

1. Establishing the objects of organization- The first job in the management audit is to identify the objectives of the business organization.

2. Evaluation of the organization structure- Next step in the management audit is to evaluate the organization structure. To find out that whether the structure enough to achieve the goals of the organizations.

3. Evaluating the policies of the organization- Evaluating the policies of the organization is very important is very important. Any scope of improvement in it should be reported.

4. Reviewing the actual performance- Auditor should review the actual performance of the various work centers. The performance should be carefully and critically evaluated.

Any scope of the improvement or inefficient working should be reported.

5. Report – On the basis of the above steps, auditor should prepare a report and
submit to the appointing authority. The report should point out all the weak and inefficient points present in the organization.

KPO – An Emerging Opportunity For Indian Chartered Accountants.

As we move further into the Information Age, our success lies in our ability to apply the knowledge that we have obtained. Some of the changes that are occuring in Information Technology are astounding, and will change the face of the business world forever.

Those who are able to take advantage of these changes will pioneer the advances of business and technology throughout the 21st century.

In this knowledge era, our success depends on what we know and what we do with what we know. Perhaps one of the most impressive phenomenons to occur in countries such as India is KPO, or Knowledge Process Outsourcing.

A number of studies have indicated that the KPO field is expect to grow by 45% by the year 2010, and of the $16 billion that will be generated by this industry, over half of it will come from India. The changes that we are going through are mind-boggling.

As you can see, there are a number of lucrative opportunities for Chartered accountants who are willing to take advantage of this market. However, before you can take advantage of this growing industry, it is first important for you to understand the meaning of KPO.

In a nutshell, KPO is an evolution of BPO, or Business Process Outsourcing. The basic idea for outsourcing was first developed by Ross Perot, who was the founder of Electronic Data Systems. The basic goal of EDS was to help companies manage their IT departments. EDS would sell the information that was related to information technology, and their clients would pay them on a monthly basis.

There are certain skills required in an Indian Chartered accountant to be a part of it, which are as follows:

1. Accounting procedures followed by companies in USA, UK or other countries.
2. Knowledge of accounting related software’s like, Quick Books, MYOB, SAGE and other accounting solutions. These are some software’s used as per international standards.
3. Skills in using tax return software’s i.e. Ultra Tax or Irish. These are few of the software’s which are used in preparing Tax Returns and annual accounts for individuals, corporations or private organizations.

Below are brief on what are the services which can be outsourced:

1. Business accounting
2. Maintenance of books and records
3. Asset accounting management
4. Financial analysis
5. Bank reconciliations
6. Payroll management
7. Different types of reports on daily basis.
8. Financial research and investigations.

Read more about KPO – An Emerging Opportunity For Indian Chartered Accountants. at Forum4ca.

Related Posts at our Blog:

* A brief about outsourcing and the recent revolutionary changes in outsourcing process.

* The evolution and growth of outsourcing process in India.

* How KPO is an emerging opportunity for Indian CA’s.

* The basic elements that differentiate BPO from KPO.

* Indian CA’s – The potential advantages and the application of KPO process.

* More KPO for CA’s articles on Forum4ca.com

A brief about outsourcing and the recent revolutionary changes in outsourcing process.

Outsourcing is the process in which a company or organization will have some of their operations carried out by entities that are located in various regions. The purpose of doing this is to reduce the cost of operation while maintaining the same level of quality or service.

There are no limitations on location when it comes to outsourcing, and it can be done in various countries around the world. When the practice of outsourcing is conducted between countries, this is referred to as being offshore outsourcing. However, the internet has allowed outsourcing to occur at very low costs.

Offshore outsourcing is useful because of the differences between time zones and the labor costs that are involved with production and manufacture. Outsourcing in other terms, transferring of an organization’s repeated non-core and core business processes to an outside provider to achieve substantial cost reductions while improving service quality.

Once the outsourced products have been produced in the country that has lower costs of manufacture, it is then shipped to customers in the countries that have higher costs of labor. The Indian outsourcing industry has continued to grow steadily in the last 10 years, and it has allowed thousands of people to become employed. In the age of information, getting knowledge is easy.

The biggest challenge to those who want to succeed is using the knowledge that they have been given access to. The many changes that have occured as a result of Information Technology are astounding. However, it is important to realize that the BPO industry is being transformed into the KPO industry.

Since outsourcing can take place anywhere and locations are not at all a “constraints”, it is possible that, the KPO practices can work for the client within the same city, state of the same country or in another country.

The evolution and growth of outsourcing process in India.

Today we are going through mind boggling changes. Since, outsourcing takes advantage of the difference in time zones and arbitrage that exists in labor costs across countries, the offshore outsourcing industry in India has grown rapidly each year over the past decade.

Mostly IT enabled service providers; BPO companies ride on the recent outsourcing boom and have provided employment to thousands of young men and women. KPO is definitely a next outsourcing boom in India as; in this knowledge era, our success depends on what we know and what we do with what we know.

India has a large pool of highly talented Chartered Accountants, MBA’s, Lawyers, Marketing managers, teachers and many more individuals who have obtained highly rated professional degrees.

This industry has continued to grow in India, and while BPO has a tendency to focus on processes, KPO places an emphasis on knowledge itself. Some of the knowledge fields that KPO touches on are engineering, law, and accounting. Any professional field that requires a large amount of knowledge will fall under the KPO category.

Basic processes are not the primary goal of the KPO industry. Instead, the use of advanced technical operations is much more important. In addition to India, some of the other countries that are heavily involved in this field are Russia, Israel, China, and the Philippines.

There are a number of potential clients available to those who offer KPO services. Some of these clients are consulting and research firms, banks, intellectual property rights, and the legal departments of large corporations. Because of the size of many of these projects, they are not simply limited to large corporations.

Small to medium sized businesses can afford KPO services as well. This is revolutionary, because it levels the playing field between large and small businesses. If you are a Chartered accountant, or you plan to become educated in this field, it is important to realize that you will be heavily exposed to this industry.

How KPO is an emerging opportunity for Indian CA’s.

Because the tools for KPO are so specialised, Chartered accountants have a distinct advantage over professionals who are educated in other areas.

The application of finance with KPO can lead to a number of fantastic results. Some of the financial work that Chartered accountants can perform are market analysis, equity research, and investment analysis.

Those who have these skills will be able to offer their services to clients who are interested in KPO. As you can see, it is easy to see why this is a field where CAs would easily be able to dominate. There are a number of important skills that candidates will want to develop if they wish to work in this field.

Candidates should be skilled with computers, and they should also display a high level of conceptualization. Candidates must also be skilled with databases, and they should be adept at conducting research. In addition to this, they must be skilled at speaking the English language, and a professional degree is also required.

It should also be noted that being mathematically oriented is important as well.

It is a proven fact that Indian Chartered Accountants possess all these qualities. They have a natural flair for mathematics, research and ability to perform deep researched audit manually.

It is very much easy for them to adopt the latest technology and use of tools and software’s, this makes them an ideal candidates to be a vital part of the KPO boom in India.

The basic elements that differentiate BPO from KPO.

There are a number of notable differences between KPO and BPO. The six elements that separate these two processes are focus, process, specialization, driving force, activities, and client contacts.

BPO has a process which is much more simple than KPO. While BPO places an emphasis on low level processes, KPO places an emphasis on high level processes such as patent filing, investment research, and legal issues. When it comes to focus, KPO focuses on the application of knowledge rather than processes. The differences in specialization between are primary connected to their domains.

Most BPO workers do not need to have a large amount of knowledge in any specific areas. The primary requirements for BPO workers are a high command of the English language and simple computer skills.

In contrast, KPO workers are expected to specialize in specific fields. Some examples of fields where KPO workers are expected to have specialized knowledge are financial analysis. These professionals are expected to be qualified as a CA or MBA. When it comes to driving force, again, KPO companies place an greater important on knowledge rather than business processes. This is the exact opposite of BPO companies. The activities of KPOs are different from BPOs as well. Any activity that requires specialized knowledge will be connected to KPO, while BPO will use a rigid structure for handling business procedures.

KPO workers can expect to deal with international clients on a regular basis. They will be responsible for communication issues, and direct communication will be essential in situations where complicated tasks must be performed.

A number of people have said that there are few differences between KPOs and BPOs. In reality, KPOs are simply one end of the spectrum. The KPO is an extension of the BPO, and allows businesses and organizations to carry out a large number of processes. There are a number of powerful advantages that can be gained from Knowledge Process Outsourcing.

When work is outsourced to other countries, companies in the developed nations can save large amounts of money on the cost of manufacture. A number of studies have indicated that these savings are as much as 40% to 70%. In addition to this, the profits that are created by the use of KPOs are double the revenues that are obtained from BPOs.

While BPOs have statistically brought in about $11 per hour, KPOs have been shown to bring in as much as $24 per hour. Perhaps one of the most powerful advantages of Knowledge Process Outsourcing are the advantages it brings to developing countries. By generating revenues from this industry, a country can become more prosperous.

Indian CA’s – The potential advantages and the application of KPO process.

The potential applications of KPOs tend to be much more advanced than Information Technology or Business Process Outsourcing. Compared to other business models, KPOs are exceptionally fast. The factor of speed is very important, but the quality of products or services are equally important as well. Having products which are high in quality will play an important role in the buying decision of your customers.

Traditionally, the design-to-market time has been long and tedious. The ability of a company to quickly bring their products and services to the market is extremely important.

The use of KPO can allow a company to rapidly design and market their products or services through hardware efficiency, market research, business administration, and competition. This is important, because the business world has continued to evolve at a rapid pace, and only those who are prepared to adapt to these changes quickly will be the ones to succeed.

It is also important to note that statistics show that KPO workers on average earn a salary which is 46% higher than BPO workers. While the typical BPO employee may only earn an annual salary of six thousand dollars, a KPO worker in the same country can earn more than eight thousand dollars per year.

Outsourcing is a trend that will not go away. Those who can take advantage of it will tip the odds of success in their favor. Some of the most popular areas for outsourcing are finance, customer service, and Information Technology.

More customers are demanding high quality products that can be brought to the market within a short period of time, and the outsourcing industry has become quite specialized. A number of corporate executives are making decisions about outsourcing that will allow them to make strategic business moves.

Globalisation is a fundamental change that is taking place in our world today, and even small businesses are now operating on a global scale.

Because the competition between businesses has reached a global scale, outsourcing has become an important tool. The worldwide competition between businesses has place increased demands for reducing the costs of manufacture.

However, it is important to realize that outsourcing is not a panacea. Outsourcing operations can easily be disrupted by terrorism, war, and disease. Because of this, businesses must be able to create strategies to deal with these issues. While the future cannot be predicted with any real certainty, there are a number of trends that are expected to appear in the next few years.

First, more countries are going to begin outsourcing. While outsourcing has traditionally been connected to countries such as the United States and the United Kingdom, it is very likely that companies based in China and the European Union will begin outsourcing as well. It is very likely that these companies will begin placing tremendous demands on their governments to avoid any military conflicts that may weaken their ability to earn profits.

Because more countries will be globally interconnected, a conflict in one nation can create a domino effect that can hurt the companies that are based in other nations.

The rising cost of such resources as gas has caused many companies to use outsourcing to reduce their operating costs. While western nations have remained dominant players in technology for many years, a shift will take place in the 21st century that will allow nations such as India and China to become powerful leaders in technology.

It is important to understand that these changes will lead to winners and losers in the market. The winners will be those who take advantage of the many changes that will occur during this time, and the losers will be those who were too slow to adjust to these changes. While KPO offers a number of powerful advantages that professionals will want to take advantage of, it is not without challenges.

Those who wish to invest in KPO will need to spend more money on building up the necessary infrastructure. In addition to this, they will need to deal with finding the right workers, and confidentiality is an issue that must be taken seriously as well. The implementation of KPO can be difficult, and it must be implemented in a professional services environment.

Any operation that is carried out for KPO must be high in quality, because the clients can afford to have less than the very best. Performance issues must be taken into consideration as well. Even if all these things have been accomplished successfully, continuous monitoring and feedback will be needed. Attrition is another important issue. It is critical for companies to be able to retain the employees they hire.