Sunrise Degree College appointed you as the auditor for the FY 2024-25. During audit, you observed the following: (i). The Students' Fee Register…

CA Intermediate · Auditing and Ethics · MTP · January 2026
Sunrise Degree College appointed you as the auditor for the FY 2024-25. During audit, you observed the following: (i). The Students' Fee Register showed several names for whom no fees were recorded for certain months. On inquiry, the accountant stated that “the class attendance register itself acts as evidence of students on roll,” and no independent check was performed to ensure that fee demands were correctly raised. (ii) You noticed that receipt counterfoils were not being compared with Cash Book entries regularly. Further, while the college normally issued receipts through its regular system/pre-numbered receipt books, in some cases handwritten manual receipts were issued. These manual receipts were outside the normal control process and, in several instances, were not traced or posted to the Fee Register, indicating a risk of unrecorded or misappropriated collections. (iii) Few students had paid fees for the next term in advance, but the entire amount was recorded as income for the current year. (iv) Admission fees collected at the beginning of the session were credited to the General Fund instead of the Capital Fund, without any resolution of the Managing Committee. (v) There were cases where concessions and free studentships were granted by the clerk without written approval from the Principal or any authorised person. As the auditor of Sunrise Degree College, explain the audit procedures you would perform regarding fees from students.

Suggested Answer and Working Notes:

Fee from Students: (i) Check names entered in the Students Fee Register for each month or term, with the respective Class Registers, showing names of students on rolls and test amount of fees charged; and verify that there operates a system of internal check which ensures that demands against the students are properly raised. (ii) Check fees received by comparing counterfoils of receipts granted with entries in the Cash Book and tracing the collections in the Fee Register to confirm that the revenue from this source has been duly accounted for. (iii) Total up the various columns of the Fees Register for each month or term to ascertain that fees paid in advance have been carried forward and that the arrears that are irrecoverable have been written off under the sanction of an appropriate authority. (iv) Check admission fees with admission slips signed by the head of the institution and confirm that the amount has been credited to a Capital fund, unless the Managing Committee has taken a decision to the contrary. (v) See that free studentship and concessions have been granted by a person authorised to do so, having regard to the Rules prepared by the Managing Committee. (vi) Confirm that fines for late payment or absence, etc. have been either collected or remitted under proper authority. (vii) Confirm that hostel dues were recovered before student’s accounts were closed and their deposits of caution money refunded.

Topics: Special Features of Audit of Different type of Entities

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic