Meaning of Routine Checking
In every organisation/enterprise whether it is of a small size or a big size, certain important books of accounts are bound to be maintained. These books of accounts are books of original entry, i.e., Journal, Prime Entry i.e., Ledger Book, Cash Book and other Subsidiary Books. Checking of these books by an auditor or his staff is called Routine Checking.
The transactions recorded in these books are ticked by the auditor or his staff, after being satisfied about their correctness.
Routine Checking involves:-
- Checking of castings, sub-castings, carry forwards and. other calculations in the books of original entry i.e., Journal and its Subsidiary Books.
- Checking of postings into the Ledger Book.
- Checking of castings and balances in the Ledger Book.
- Checking of transfer of balances from the Ledgers to the Trial Balance.
Routine Checking is done by the staff of the auditor, which is usually junior staff. It is mostly mechanical in nature, but its importance is great. It forms the basis of the audit report as the final checking depends upon it.
Objectives of Routine Checking
- Routine Checking discovers clerical errors and ordinary frauds. It is quite useful in ascertaining arithmetical accuracy of the books of accounts.
- It also ensures, that no alteration in figures has been made by the staff of the enterprise, after these have been checked and verified by the auditor or his staff.
- It comprises a through checking of the original and prime books, which are the basis of drawing final accounts. When these books have been routine checked, it is presumed that the final accounts prepared depict a true and fair state of affairs of the enterprise.
Should all the Books of Accounts be Routine Checked?
The answer to this question depends upon the efficacy of the Internal Check System practised in the enterprise. If the auditor finds the internal check system proper and reliable, he can go for Test Checking of these books, instead of doing thorough checking. In case, the internal check system iS weak, the auditor should go for a thorough Routine Checking.
Advantages of Routine Checking
The following advantages of Routine Checking can be stated
Knowledge of Mathematical Accuracy:
Routine checking brings to the notice of the auditor or his staff arithmetical errors, which can be rectified at this stage.
Assurance about Posting:
The auditor is assured that posting to the ledger from the journal is correct and he can go ahead in his work.
No Possibility of Alteration in the Figures of the Account Books and Records:
Routine checking rules out alteration in the figures of the account books, since the auditor or his staff uses different ticks and of different colours.
Helpful in Checking Final Accounts:
Routine checking helps in the checking of the Trial Balance and also the Final accounts of the enterprise. In this process of checking, errors and frauds of clerical nature are brought to light.
Disadvantages of Routine Checking
The following disadvantages of Routine Checking can be stated
Mechanised Work:
Routine checking is a mechanised work. The auditor or his staff feels monotony in this work and especially the staff of the auditor which is usually articled clerks do not take full interest in this work. In many cases their carelessness has been brought to light.
No Detection of Planned Frauds:
Routine checking brings to light only small errors and frauds. Big deliberate and planned frauds as well errors are not covered by it. They can be detected by the special efforts on the part of the auditor and not by mere Routine Checking.
Difficult to Trace out Errors of Principles and of Compensatory Nature:
Routine checking fails to detect errors of principles and compensatory nature, since such a checking is of a mechanical nature and is done usually hurriedly.
FAQ
Ans: In every organisation/enterprise whether it is of a small size or a big size, certain important books of accounts are bound to be maintained. These books of accounts are books of original entry, i.e., Journal, Prime Entry i.e., Ledger Book, Cash Book and other Subsidiary Books. Checking of these books by an auditor or his staff is called Routine Checking.
