VSME37000 - Supplementary or alternative checks: checks on completeness of output records

Where appropriate, the following checks should be carried out:

• items should be selected from subsidiary and/or non-accounting records, for example, customer’s orders, work sheets, job tickets, packing slips, consignment notes, delivery records, and traced forward to the VAT account, via copy sales invoices, sales day books, sales ledgers, cash books. A simultaneous check may be made on liability of the goods and services supplied;
• additionally the cashbook, journals, and various accounts in the general or nominal ledger should be examined to ascertain whether there are taxable activities, which are not reflected in the VAT account. This should include disposals of fixed assets, the value of which should be obtainable by reference to the annual accounts. The accounts value will be historical cost less depreciation. This gives the book value. If there is a reference to profit or loss on disposal, this relates to amounts greater or less than the book value. The proceeds are thus book value plus profit or less loss;
• total outputs over a period may be compared with bank lodgements;
• check whether the Daily Gross Take (DGT) record is up to date and question the trader’s audit trail from till to permanent records to see if any are missing;
• record how the trader arrives at his DGT from the till reading, detailing what adjustments are necessary. Refer to Notice 727 Retail Schemes and the relevant scheme notice;
• check what subsidiary records are used to make up the DGT, for example till rolls, notebooks, rough books; and
• check any consecutive numbering (for example “Z” readings on till rolls, numbered pages on receipt books) and that the sequence is complete
• Check the difference between grand totals on Z reads are comparable to DGT recorded within the same period
• Check if any additional information can be obtained from journal rolls.