You are the auditor of Om Manufacturing Ltd. for the financial year 2024-25. During the audit, you notice significant year-end withdrawals of cash…

The audit procedure to detect and address possible inflation of cash payments and fraud in cash disbursements in the above circumstances are as follows: All evidence as regards cash payments made, including acknowledgement by parties for payments shown to have been made to them, should be carefully scrutinised.In the case where a figure appears to have been erased or altered on the receipts issued by the party, on making reference to the party concerned, the actual amount paid to him should be confirmed. The same procedure should be applied in respect of amounts acknowledged on blank papers.All payments by bearer cheques should be examined.The system of recording of wages should be reviewed, specially as regards possible over-totalling of wage sheets, and the inclusion of dummy workmen.The system of ordering and receiving goods should be reviewed so as to confirm that no payment has been made in respect of supplies which have not been received.Confirmations should be obtained from partners or Directors in respect of amounts shown to have been paid to them.The Petty Cash Book should be vouched and totalled.Special attention should be paid to payments made on account of salaries and wages; confirmation should be obtained from the management that all payments of such salaries and wages were made to persons who were actually in the service of the company.All the withdrawals from the bank should be checked with reference to entries in the bank's pass book.All the bills receivable or payable should be checked with reference to the Bills Books.