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What is Test Checking? An auditor may not be in position to check cent percent items while auditing the accounts of any concern. He can examine some entries and remaining items may be considered checked. The data is very large and sufficient time is not available for checking. The cost of audit may be high as compared to fee.The interested parties cannot wait for long time for audited accounts. The audit staff may feel-burden due to large data and errors may not be disclosed. The true and fair view does not mean cent per cent accuracy. In these cases   there is need of test checking or judgement sampling.


Professor Meigs says that test checking means to select or examine a representative sample from large number of similar items. It is clear that test checking is sample checking. The whole data cannot be examined. The audit staff can use techniques to check the facts and figures. A certain percentage of transactions can be selected for thorough examination. The remaining transactions are supposed checked.


1. INTERNAL CONTROL: Auditor must review system of internal control before doing test checking. He cannot apply test checking when he finds that the internal control system is either ineffective or defective.
2. SAMPLE: The sample items selected from whole data must be representative. The selection can be made by any method. The entire data must be presented in the form of sample.
3. LAST MONTH: The last month of accounting year is the most important. The items appearing in the last month must be given maximum importance at the time of selecting the sample.
4. FIRST MONTH: The first month of accounting year provides essential information. The transaction recorded in the first month must be assigned high weight-age in order to select the sample.

5. SURPRISE TESTING: The auditor should embrace the part of surprise in choice of take a look at. The accounting employees should be unaware of take a look at checking in order that he shouldn’t build arrangement, for take a look at checking.

6. DYNAMIC METHODS: The auditors will modification his methodology of choosing the sample. At just once he will use one methodology whereas at over again he will use alternate methodology. The choice methodology should be modified from time to time.

7. EVERY TYPE OF TRANSACTION: The auditor should choose each kind of group action in take a look at checking. There’s got to embrace every kind of dealing within the sample.

8. EVERY EMPLOYEE: The auditor will choose the work of each worker. The take a look at checking will be wont to examine the work of all staff within the organization.

9. THROUGHOUT THE YEAR: The take a look at checking will be applied to any or all things showing within the books throughout the year. The relevant things square measure most fitted for take a look at checking.

10. CASH BOOK: The cashbook entries should not be used for take a look at checking. There is want of cent percent checking of all things showing in money book. The management over money is crucial for economical business operating.

11. REVIEW: The system of take a look at checking ought to be reviewed from time to time to introduce enhancements.


1. OPENING ENTRIES: It should be noted that opening entries are passed at the start of the year. These items require cent percent checking: There is no need to apply test checking.
2. CLOSING ENTRIES: These entries are recorded at the end of the year. There are few entries for closing the revenue accounts. Test checking is not suitable for closing entries.
3. EXCEPTIONAL ITEMS: The exceptional or unwell may be one or two in number. These items require hundred percent checking. The test checking is essential for large number of transactions.
4. MANAGEMENT REMUNERATION: The management remuneration is not fit for test checking. It can be checked on hundred percent bases. The concept of materiality does not relate to remuneration.
5. BUSINESS PURCHASE: The business purchase transactions are not used for test checking. All assets and liabilities are tested one by one . The business purchase is not a regular feature of activities.

6. SEASONAL INDUSTRY: The seasonal industry transactions are not suitable for test checking. There is much work at one time and there is no work at other time. So this type of work is not fit for test checking,
7. PROFIT & LOSS ITEMS: The Profit and Loss items are checked on cent percent basis. The test checking cannot be applied to profit and loss account items. The true and fair view is possible after thorough checking.
8. BALANCE SHEET ITEMS: The balance sheet items are checked on cent percent basis. There is no need of test checking of assets and liabilities appearing in balance sheet. The facts can be disclosed after thorough checking.
9. DEPRECIATION: The depreciation on fixed assets is charged every year. The amount of depreciation is not fit for test checking. The auditor must apply the rule of cent percent checking on depreciation.
10. ROYALTY: The item of royalty is not suitable for test checking. There is a need of thorough checking Of royalty expense. The royalty is paid on yearly basis so there is one item of checking.
11. RECONCILIATION STATEMENT: The bank reconciliation items are not very large. There are few items so there is a requirement of cent per cent checking.


1. TIME SAVING: The advantage of take a look at checking is offered within the form of your time saving. A sample thing is checked and remaining items square measure treated as checked. During this method there’s saving in time in take a look at checking.

2. LESS LABOUR: The take a look at checking is beneficial for saving labour. Plenty work needs several clerks for finishing the audit. However take a look at checking is employed to check few things in order that there’s less labour work.

3. ACCURATE BOOKS: The take a look at checking is beneficial to notice the accuracy of accounting books and different record. There’s a requirement of error free books. The take a look at checking could be a step within the right direction to prove accuracy.

4. STAFF EFFICIENCY: The potency of accounting employees improves attributable to take a look at checking. The weakness of worker is rumored to the management. The workers try and improve their work by overcoming their deficiencies.

5. TIMELY REPORT: The good thing about take a look at checking is that timely report may be submitted to management. The big variety of figures may be checked in brief amount of your time in order that there’s no delay.

6. MANY AUDITS: Take a look at checking is beneficial to complete several audits in one year. It saves sufficient time that may be accustomed check the books of recent purchasers. The auditor is in a position to lift additional financial gain.

7. SPECIAL ATTENTION: The auditor pays special attention vital matters. Take a look at checking reduces labour work on the part of audit employees. There is sufficient fundamental measure to settle the vital matters.


1. ERRORS ARE NOT DISCLOSED: The demerit of test checking is that errors are not making known by it. In the existence of errors true and fair view is not possible. No doubt the location of errors is the duty of   management but affects the audit work.
2. PLANNED FRAUDS ARE NOT DISCLOSED: The demerit of test checking is that planned frauds may not be disclosed. The fraud discovery is the responsibility of management. The audited accounts   cannot show the true and fair view when fraud exists in books.
3. RESPONSIBILITY CAN NOT BE SHIFTED: The demerit of test checking is that auditor cannot shift his responsibility to others. The   errors and frauds can be discovered through cent’ per cent checking. So auditor is responsible for test checking.
4. REPORT MAY FAIL TO DISCLOSE TRUE POSITION: The audit report may fail to disclose true and fair view of business matters. After   test checking the auditor signs the report. The auditor is responsible for audit report based on test checking.

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