Checklist for Audit of Fixed Deposits

Documents to be obtained at the time of deposit.

·         Duly filled Application Form

Copy of Pan Card

In case of FD from an employee, Employee I Card should be obtained to ascertain the employment status of the employee on the deposit date.

In case of FD from a senior citizen, Age proof should be obtained.

In case of FD from a shareholder having minimum 500 shares of face value of Rs. 2 each, than latest shareholding proof should be obtained.

 Points to be checked during review of FD

FD are accepted only above the minimum limit on amount fixed by the company.

Application form is accompanied by the required documents.

Correct rate of interest is credited in the account of depositor.

Interest rate above 0.25% the normal rate to be given to the Senior citizen, Employees, Shareholders having minimum 500 shares.

Application form should be serially numbered.

Date of receipts should be mentioned on the application form.

In case deposits accepted from a Company/Trust an copy of board resolution should be obtained from that Company/Trust as the case may be.

FD should be issued only after the realization of the cheque received from the depositor so that cases like dishonor etc. may be avoided.

TDS should be deducted at the applicable rate if the interest amount exceeds the minimum threshold limit as per Income Tax Act.

In case of Renewal/repayment, deposit receipt should be duly discharged on a revenue stamp.

In case any FD is matured before its maturity date, applicable penal interest should be deducted.

 If any interest warrants remained unclaimed by the depositor than it should be transferred to unclaimed interest account. As per government regulations, If these interest warrants remained unclaimed for Seven years than it should be transferred to the ‘Investor Protection Fund A/c’.

FD should be either renewed/matured on the maturity date. Proper reminder should be send to the depositors for this purpose.

Application form should be properly signed by the depositors.

Proper nomination should be given by the depositors.

All the details mentioned in the application form should be properly entered in the system.

Old records should be properly preserved by the company.

Points to be considered for FD received through registered brokers.

·         Brokerage should be paid at the appropriate rate.

·         Mailing expenses incurred by the Broker should be reimbursed only for the FD having maturity period of Three years.

·         Broker’s seal should be affixed on the application form so that brokerage amount due to the broker may be correctly ascertained.

·         If any FD received through broker is pre-matured by the depositor than along with penal interest, Brokerage at prescribed rates should be deducted from maturity amount.

Thank You