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Verification of capital is an important task for auditors to ensure the accuracy and completeness of capital-related information in financial statements. A well-designed and executed audit procedure ensures that capital is properly accounted for, and disclosed in the financial statements. The auditor must examine various aspects of capital, including its issuance, changes, subscriptions, payments, and compliance with relevant laws and regulations. To facilitate this process, an illustrative checklist can be utilized, providing a systematic approach for verifying capital. It serves as a helpful tool in organizing the audit process and ensuring that all relevant aspects are adequately addressed. By following this checklist, the auditor can effectively assess the adequacy and legitimacy of capital transactions and provide assurance on the integrity of capital-related disclosures.
I. Has the auditor verified the authorised capital shown in the balance sheet with the Memorandum of Association in the case of a company, registered byelaws in the case of a cooperative society, relevant statute or the Government Order in the case of a statutory corporation or other body corporate
II. Has the auditor examined the audited balance sheet of the immediately preceding year as a reference
III. Has the auditor examined the minutes of the general meeting and/or Board to determine if any change in the capital structure has taken place since the last balance sheet
IV. Is the auditor verifying whether any changes in the capital structure are properly authorized based on the examination of the minutes of the general meeting and/or Board
V. Should the auditor examine a copy of the documents filed with the Registrar of Companies, accompanied by the specified fee as required by section 64 of the Companies Act, 2013
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