Check List

This is a series of instructions and/or questions which a member of the auditing staff must follow and/or
answer. When he completes instruction, he initials the space against the instruction. Answers to the
check list instructions are usually Yes, No or Not Applicable. This is again an on the job requirement
and instructions are framed having regard to the desirable elements of control. A few examples of check
list instructions are given hereunder:
1. Are tenders called before placing orders?
2. Are the purchases made on the basis of a written order?
3. Is the purchase order form standardised?
4. Are purchase order forms pre-numbered?
5. Are the stock control accounts maintained by persons who have nothing to do with :
(i) custody of work;
(ii) receipt of stock;
(iii) inspection of stock; and
(iv) purchase of stock?
The complete check list is studied by the Principal/Manager/Senior to ascertain existence of internal
control and evaluate its implementation and efficiency.

The Narrative Record

This is a complete and exhaustive description of the system as found in operation by the auditor. Actual
testing and observation are necessary before such a record can be developed. It may be recommended
in cases where no formal control system is in operation and would be more suited to small business.
The basic disadvantages of narrative records are :
(i) To comprehend the system in operation is quite difficult.
(ii) To identify weaknesses or gaps in the system
(iii) To incorporate charges arising on account of reshuffling of manpower, etc.