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CMA Intermediate · Corporate Accounting and Auditing · Auditing of Different Types of Undertakings

In the audit of an educational institution, which procedure gives the best evidence that tuition fee income for the year is complete?

The best procedure is to reconcile the enrolment register with the fee demand registers and the receipts. This links every enrolled student to a fee charged and collected, exposing unrecorded income, whereas testing only bank deposits starts from items already recorded.

  1. AReconcile the student enrolment register with fee demand registers and fee receiptsCorrect
  2. BVerify only the fee receipts deposited in the bank
  3. CCheck the salary sheets of the teaching staff
  4. DExamine the building maintenance bills

Explanation

Completeness of fee income requires that every enrolled student's fee is accounted for. Tying enrolment records to the fee demand and then to receipts reveals unrecorded or unbilled fees. Checking only bank deposits starts from what was recorded, so it cannot detect omitted receipts.

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