Auditing - Vouching

1) Vouching means an examination by the auditor of supporting documents to authenticate the transactions entered in the books of accounts.

2) Importance as well as Objects of Vouching:

1. Detection of errors and frauds
2. Reduce liability of auditors
3. Moral check on employees
4. Back bone of auditing 
5. Compliance with law
6. Capital and revenue expenditure
7. Genuineness of transactions
8. Nature of transactions
9. Accounting period
10. Accounting
11. Easy conduct of audit

3) Important points to be considered while Vouching :

1. All the vouchers are serially numbered and filed in order of the entries in the accounts.
2. Attention should be paid to the dates which must corresponds to the audit period.
3. The auditor should see whether the voucher is in the name of client.
4. He should see whether the amount written in figures and words is correct.
5. He should ensure whether the account head is properly written or not.
6. He should also see whether the voucher is signed by the recipient of the amount.
7. He should ensure whether the voucher is properly authenticated.
8. Auditor also see whether the expenditure shown is reasonable or not.
9. He should see whether the expenditure is for the cause of the business.
10. In case of expenditure  exceeding Rs. 5,000/= auditor should ensure whether the revenue stamp is affixed on the voucher or not.
11. Auditor should see whether the voucher is properly accounted in the books or not.

Factory Act - Working Hours and Penalties

       

• Exemption of Occupier or Manager from liability in certain cases : 
• Within 3 clear days will give in writing of his intention of producing other actual offender
• The Court shall adjourn the case not more than 3 months for such production of actual offender.
• Continuation of the offence within the period or extended period :
• 6 Months jail or Rs. 100/= for each day or both
• Onus as to age: burden shall be on the accused
• Limitation of prosecution : 
• Within 3 months of the date on which the alleged commission of the offence came to the knowledge of an inspector.
• Within 6 months of the date on which the offence is alleged to have been committed in case of disobeying a written order made by an inspector.

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• Appeal - can be made within 30 days of the service of the order.
• Obligation of workers - If any workers contravenes of any of the provisions of this section (causing danger to health, safety and welfare of workers) , he shall be punishable with jail of 3 months or fine up to Rs. 100/=  (in lumbsum) or both.
• Publication of rules : specified date should not be less than 45 days from the date of publication.
• Restriction on disclosure of information : If any inspector contravenes the order, he shall be punishable to jail of 6 months or fine up to Rs. 1,000/= or both.

Factory Act - Some typical points... (Part-1)

FACTORY ACT – SOME TYPICAL POINTS
(important point skipped in this note- 'Occupier')

1. Basic concepts : (1) Adult- completed 18 years, (2) Adolescent – 15 years, (3) Child- less than 15 years, (3) Young- either child or adolescent,

2. Manufacturing process – means any process for (i) making, altering, repairing  ornamenting, finishing, packing, oiling, washing, cleaning, breaking up or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal; or (ii) Pumping oil, water sewage or any other substance; or (iii) Generating, transforming or transmitting power; or (iv) Composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; (v) Constructing, reconstructing, rekpaiaring, refitting, finishing or breakinag up ships or vessels; (vi) Preserving or storing any article in cold storage

3. Worker – means a person employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process but does not included any member of the armed forces of the union.

4.  Factory – means any premises including the precincts thereof whereon 10/20 workers are working or were working on any day of the preceding twelve months, and in any part of which a manufracturing process is being carried on with/without the aid of power or is ordinarily so carried on but does not include a mine subject to the operation of Mines
Act, 1952 or a mobile unit belonging to the armed forces of the union, a railway running shed or a hotel, restaurant or eating place.        

5.  In emergency time, factories can be exempted from this Act for 3 months in a stretch except for the provision of sec-67.(prohibition of child labour). 

6. If no order is communicated to the applicant within 3 months, the permission applied for shall be deemed to be granted. If State Govt. or Chief Inspector refuses to grant permission, the applicant may file appeal to Central Govt. or State Govt. whichever is applicable.

SAFETY           

1	Fencing of machinery
2	Work on or near machinery in motion	Belt is not more than 15 Cms in width
3	Employment of young persons on dangerous machines
4	Striking gear and devices for cutting off power
5	Self-acting machines
6	Casing of new machinery	Penalty: up to three months imprisonment or Rs. 500/=
7	Prohibition of employment of women and children near cotton-openers
8	Hoists and lifts
9	Lifting machines, chains, ropes and lifting tackles
10	Revolving machinery
11	Pressure plant
12	Floors, stairs and means of access
13	Pits, sumps, openings in floors etc.
14	Excessive weights
15	Protection of eyes
16	Precautions against dangerous fumes, gases etc.
17	Precautions against the use of portable electric light
18	Explosive or inflammable dust, gas etc.
19	Precautions in case of fire
20	Power to require specifications of defective parts or tests of stability
21	Safety of buildings and machinery
22	Maintenance of buildings
23	Safety officers	Where 1,000 or more workers are employed

HEALTH

Cleanliness
*	Washing by effective method	Once in every week
*	Painating & Varnish of doors & window	Once in 5 years
Disposal of wastes and effluents
Ventilation and temperature
Dust and fume
Artificial humidiation
Overcrowding	Space for every worker	14.2 cubic metres with  4.2 metres above the floor of the room
Lighting
Drinking water	Cooling drinking water	More than 250 workers
Latrines and urinals	Floors and internal walls up to a height of 90 cms.and sanitary blocks in glazed tiles	250 workers
Spittoon	Every factory	Fine of Rs. 5/= for conravention

PROVISIONS RELATING TO HAZARDOUS PROCESS

41A	Constitution of Site Appraisal Committee	Recommend within 90 days
41B	Compulsory disclosure of information by the occupier
41C	Specific responsibility of the occupier in relation to hazardous processes
41D	Power of Central Govt. to appoint Inquiry Committee
41E	Emergency Standards
41F	Permissible limits of exposure of chemical and toxic substances
41G	Workers participation in safety management
41H	Right of workers to warn about imminent dangers