A STUDY ON AUDIT OF CLUB BANGALOW BOWLING AND SPORTS

CLUB LIMITED
Master of Commerce Part II (Accountancy)
(2016-2017)
Semester III

Submitted by
Sayed Shabnaz Arif
Roll No: 17
Subject: Advanced Auditing
Project Guide: Prof. Mr. Sachin Bhandarkar

Vivekanand Education Societys College of Arts, Science and Commerce

Sindhi Society, Chembur, Mumbai - 400071

For Academic Year (2016-2017)

STUDY ON AUDIT OF CLUB BANGALOW BOWLING AND SPORTS

CLUB LIMITED

Submitted in the partial fulfillment of requirement for qualifying

Master of Commerce Part II (Accountancy)
Semester III

Submitted by
Sayed Shabnaz Arif
Roll No: 17
Subject: Advanced Auditing
Project Guide: Prof. Mr. Sachin Bhandarkar

Vivekanand Education Societys College of Arts, Science and Commerce

Sindhi Society, Chembur, Mumbai - 400071

For Academic Year (2016-2017)

2

CERTIFICATE
This is to certify that the project entitled Study on Audit of Club Bangalow Bowling and
Sports Club Limited submitted by Sayed Shabnaz Arif in partial fulfillment for the award of
Master of Commerce Part II (Accountancy); University of Mumbai under the guidance of Prof.
Mr. Sachin Bhandarkar is her original work and does not form any part of the projects
undertaken previously.
Also it is certified that the project represents the original work on the part of the candidate.

Project Guide

Principal

Prof. Mr. Sachin Bhandarkar

Dr. (Mrs.) J. K. Phadnis

Course Coordinator

External Examiner

Prof. Mr. Johnson

College Seal

DECLARATION
I the undersigned hereby declare that the project report entitled Study on Audit of Club
Bangalow Bowling and Sports Club Limited submitted by me under the guidance of Prof. Mr.
Sachin Bhandarkar in partial fulfillment for the award of Master of Commerce Part II
(Accountancy); University of Mumbai is my original work and does not form any part of the
projects undertaken previously.
The information submitted is true and original to the best of my knowledge.

DATE:
PLACE: Mumbai
ROLL NO: 17

Signature of Student
Sayed Shabnaz Arif

ACKNOWLEDGEMENT
With immense please I presented Study on Audit of Club Bangalow Bowling and Sports Club
Limited project report as part of the curriculum of Master of Commerce Part II (Accountancy). I
wish to thank all the people who have extended their support and guidance for making this
project, an enriching experience for me.
I would like to express my sincere gratitude towards our project guide Prof. Mr. Sachin
Bhandarkar for giving proper direction and helping at every stage of my project. Her timely cooperation and valuable suggestions helped me to understand the subject well and undertake the
study in fulfilling manner.
I express my profound thanks to all those who have indirectly guided and helped us in
preparation of this project.
I also like to extend our gratitude to all staff and my colleagues of college, who provided moral
support, a conductive work environment and the much - needed inspiration to conclude the
project in time and a special thanks to my parents who are integral part of the project.
Thanking you,
Sayed Shabnaz Arif.

INDEX
SR. NO.

CONTENTS

1.

CHAPTER I
o
o
o

Meaning of Audit.
Advantages and Disadvantages of Audit.
Qualification and Disqualification of an Auditor.

PAGE NO.

1
5
9

2.

CHAPTER II
o
o
o

Introduction to Audit of Club.

Procedure to Audit of Club.
Types of Club.

12
14
16

3.

CHAPTER III
o

Company Profile Bangalow Bowling and Sports

Club Limited.
Auditors Report.

4.

19
20

CHAPTER IV
o
o

Conclusion.
Bibliography.

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MEANING OF AUDIT
An audit is a systematic and independent examination of books, accounts, statutory records,
documents and vouchers of an organization to ascertain how far the financial statements as well
as non-financial disclosures present a true and fair view of the concern. It also attempts to ensure
that the books of accounts are properly maintained by the concern as required by law. Auditing
has become such a ubiquitous phenomenon in the corporate and the public sector that academics
started identifying an Audit Society. The auditor perceives and recognizes the propositions
before him/her for examination, obtains evidence, evaluates the same and formulates an opinion
on the basis of his judgement which is communicated through his audit report.
Any subject matter may be audited. Audits provide third party assurance to various stakeholders
that the subject matter is free from material misstatement. The term is most frequently applied to
audits of the financial information relating to a legal person. Other areas which are commonly
audited include: secretarial & compliance audit, internal controls, quality management, project
management, water management, and energy conservation.
As a result of an audit, stakeholders may effectively evaluate and improve the effectiveness of
risk management, control, and the governance process over the subject matter.
The word audit is derived from a Latin word audire which means to hear. During the
medieval times when manual book-keeping was prevalent, auditors in Britain used to hear the
accounts read out for them and checked that the organizations personnel were not negligent or
fraudulent.

RESEARCH METHODOLOGY
Data Collection:
The data collected is secondary data which is collected from books, articles, and internet.
Limitations:
It is not easy to collect data from the internet. It takes time to learn and understand this secondary
data which is collected from internet.

OBJECTIVES OF AUDIT
A. Primary Objectives of Audit:
The main objectives of audit are known as primary objectives of audit. They are as follows:
i. Examining the system of internal check.
ii. Checking arithmetical accuracy of books of accounts, verifying posting, costing, balancing
etc.
iii. Verifying the authenticity and validity of transactions.
iv. Checking the proper distinction of capital and revenue nature of transactions.
v. Confirming the existence and value of assets and liabilities.
vi. Verifying whether all the statutory requirements are fulfilled or not.
vii. Proving true and fairness of operating results presented by income statement and financial
position presented by balance sheet.
B. Secondary Objectives of Audit:
These are such objectives which are set up to help in attaining primary objectives. They are as
follows:
i. Detection and prevention of errors:
Errors are those mistakes which are committed due to carelessness or negligence or lack of
knowledge or without having vested interest. Errors may be committed without or with any
vested interest. So, they are to be checked carefully. Errors are of various types. Some of them
are:

Errors of principle
Errors of omission
Errors of commission
Compensating errors
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ii. Detection and prevention of frauds:

Frauds are those mistakes which are committed knowingly with some vested interest on the
direction of top level management. Management commits frauds to deceive tax, to show the
effectiveness of management, to get more commission, to sell share in the market or to maintain
market price of share etc. Detection of fraud is the main job of an auditor. Such frauds are as
follows:

Misappropriation of cash.
Misappropriation of goods.
Manipulation of accounts or falsification of accounts without any misappropriation.

iii. Under or over valuation of stock:

Normally such frauds are committed by the top level executives of the business. So, the
explanation given to the auditor also remains false. So, an auditor should detect such frauds
using skill, knowledge and facts.
iv. Other objectives:

To provide information to income tax authority.

To satisfy the provision of Company Act.
To have moral effect.

ADVANTAGES OF AUDIT
The Advantages of Audit are explain as follows:
1. Audit helps to Detect and Prevent Errors and Frauds:
An auditor's main duty is to detect errors and frauds, preventing such errors and frauds and
taking care to avoid such frauds. Thus, even though all organizations do not have compulsion to
audit, they make audit of all the books of accounts.
2. Audit helps to maintain account Regularly:
An auditor raises questions if accounts are not maintained properly. So, audit gives moral
pressure on maintaining accounts regularly.
3. Audit helps to get Compensation:
If there is any loss in the property of business, insurance company provides compensation on the
basis of audited statement of valuation made my the auditor. So, it helps to get compensation.
4. Audit helps to obtain Loan:
Specially financial institutions provide loan on the basis of audited statements. A business
organization may obtain loan considering the audited statement of last five years. So, an
organization should make audit compulsory to obtain loan.
5. Audit facilitates the Sale of Business:
Valuation of assets is made by the auditor. On the basis of valuation of assets and liabilities,
businessman can sell his business. It helps to determine the price of business.
6. Audit helps to assess Tax:
Tax authorities assess taxes on the basis of profit calculated by the auditor. In the same way sales
tax authority calculates sales tax on the basis of sales shown in the audited statement.

7. Audit helps to adjust account of Deceased Partner:

Valuation of all the assets and liabilities of the business is made by the auditor while auditing
books of account. Such valuation helps to clear the amount of deceased partner.
8. Audit helps to present a Proof:
If any case is filed against the auditor regarding negligence, auditor can present audited report as
a proof to settle such case. So, it helps to present proof to settle such cases.
9. Audit provides information about Profit or Loss:
A businessman wants to know profit or loss of his business after a certain period of time. So, the
owner of the business can get information about profit or loss after auditing the books of
accounts.
10. Audit helps to prepare Future Plan:
All the audited statements remain true and correct. Such true and correct account helps to
prepare for the future plans.
11. Audit helps to increase Goodwill:
Auditing shows the profitability and financial position of an organization which creates faith of
public over the business. Thus, auditing helps to increase goodwill of an organization.
12. Audit helps to Amalgamate the Company:
Sometimes, same nature of organization may be amalgamated. Auditing makes valuation of
assets and liabilities which helps to amalgamate the company. Purchaser of the company can
accept such business organization on the basis of valuation made by the auditor.

DISADVANTAGES OF AUDIT
The Disadvantages of Audit are explain as follows:
1. Extra cost:
Testing involves extra cost to the organization which is considered as a burden. It involves the
disruptions of multiple cases. The auditor has to concentrate more even though there are
disruptions. Before audit begins the auditor must get the attention of all the staff members of the
organization.
2. Evidences:
Evidences that are identified are more pervasive than conclusive. The strength of submission of
audited accounts makes major changes in the accounts of distribution of profits.
3. Harassment of staves:
Since the employees cannot express their own in terms of auditing, these changes are calibrated
and the employees will fell harassed due to the changes that are caused. Even if they try to
express their knowledge in new ideas, the organization may not entertain the employees in these
types of situations.
4. Unsuitable changes:
The rules and regulations of business may vary from time to time. It remains unstable when the
program begins. It is obvious that the companys policies may not change periodically whereas
the rules and regulations may.
5. Chances of fraud:
Since the information delivered after auditing is credential then there becomes more chances of
getting the situations where an individual will be forced to commit crime. It harasses the auditors
to commit crime after the audit gets over.

6. Small concerns:
Small scale industries may usually proceed with transactions that are usually completed within
the shorter period of time. Thus, auditing is not too important.
7. Problems in remedial measures:
Here the problem is created in remedial measures that are enhanced within the detailed interface
of the data of remedial measures. These remedial measures are not included in the audit program.
8. Insufficient considerate:
The education curve will be contented about the business and insufficient relaxed networks and
also offers systematic internal recruitment. These may gravely obstruct the expense of all the
employees.
9. Not guaranteed:
Auditing cannot provide any data that are analyzed and prepared. It has financial accounts on the
data that are provided. It is disclosed based on the information and explanations that are agreed
by the clients.
Accuracy in the process of audit plays a vital role that is reflected on the statement of correct
amount. Classification of the transaction is handled properly and timings are recorded on the
exact dates. Posting and summation of the master files amounts are properly classified. Therefore
without audits, progress of the company cannot be identified.

QUALIFICATION AND DISQUALIFICATION OF AN AUDITOR

Qualification of an Auditor:
According to Provisions of Section 141(1) of the Companies Act, 2013 a person shall be
eligible for appointment as an auditor of a company only if he is a chartered accountant within
the meaning of Chartered Accountants Act, 1949 and holds a valid Certificate of Practice.
It has been further provided that the firm shall also considered to appointed by its firm name
whereof majority of partners practising in India are qualified for appointment as auditor of a
company.
According to Provisions of Section 141(2) of the Companies Act, 2013, a firm including limited
liability partnership who are chartered accountants shall be authorised to act as auditor and sign
on behalf of the such limited liability partnership or firm.
Summary:
A person shall appointed as an auditor if he is chartered accountant within the meaning of
Chartered Accountants Act, 1949 and holding valid certificate of practice and acting in capacity
as:
1) Individual
2) Partnership Firm
3) Limited Liability partnership
It has been further provided that only partners who are Chartered Accountants will be authorised
to sign on behalf of the firm.
Disqualification of an Auditor:
According to Provisions of Section 141(3) of the Companies Act, 2013 , following persons shall
not be eligible as auditor of the company:
1) A body corporate other than LLP registered under the LLP Act, 2008

2) An officer or employee of the company.

3) A person who is partner or who in the employment, of an officer or employee of the company.
4) A person who or his relative or partner

(i) is holding any security/interest in the company or its subsidiary or of its holding or
associate company or subsidiary of such holding company. It has been further provided that
an relative may hold security or interest in the company of face value not exceeding one lac
rupees.

(ii) is indebted to the company or its subsidiary, or its holding or associate company or
subsidiary of such holding company, in excess of Rs. 5 lacs rupees

(iii) has given guarantee or provide any security in connection with the indebtness of any
third person to the company or its subsidiary, or its holding or associate company or a
subsidiary of such holding company for value in excess of Rs. 1 lacs.

5) A person or a firm who (whether directly or indirectly) has business relationship with the
company, or its subsidiary, or its holding or associate company or subsidiary of such holding
company or associate company.
Here the business relationship shall be construed as any transactions enter into for a commercial
purpose except:

(i) Commercial transactions which are in the nature of professional services permitted to be
rendered by an auditor or audit firm by the professional bodies regulated such members.

(ii) Commercial transactions which are in ordinary course of business of the company at
arms length price as customer.

6) A person whose relative is a director or is in the employment of the company as a director or

key managerial personnel.
7) A person:

(i) who is in full time employment elsewhere or

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(ii) a person or a partner holding appointment as its auditor is at the date of such
appointment or reappointment holding appointment as auditor for more than 20 companies.

8) A person who has been convicted by a court of an offence involving fraud and a period often
years has not elapsed from the date of such conviction.
9) Any person whose subsidiary or associate company or any other form of entity is engaged as
on the date of appointment in consulting or specialised services in reference to provision of
Section 144 of the Companies Act, 2013.
Further According to Provisions of Section 141(4) of the Companies Act, 2013, where a person
appointed as auditor of the company incurs any of the disqualification mentioned in Section
141(3) of the Companies Act, 2013 after his appointment, he shall vacate his office as such
auditor and such vacancy shall be deemed to be casual vacancy in the officer of the auditor.
It must be noted that the aforesaid provisions are applicable to all types of auditors i.e. cost
auditors, statutory auditors and secretarial auditors.

INTRODUCTION TO AUDIT OF CLUB

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A club is usually constituted as a company limited by guarantee. Therefore, various provisions of

the Companies Act, 1956 relating to the audit of accounts of companies are also applicable to its
audit. The special steps involved in such an audit are stated below:
(a) Vouch the receipt on account of entrance fees with members application, counterfoils issued
to them, and minutes of the managing committee.
(b) Vouch members subscription with the counterfoils of receipts issued to them. Trace receipts
for a selected period to the register of members: reconcile the amount of total subscription due
with the amount collected and the outstanding.
(c) Ensure that arrears of subscription for the previous year have been correctly brought over and
arrears for the year under audit and subscription received in advance have been correctly
adjusted.
(d) Check totals of various columns of the Register of members and tally them across.
(e) See the register of members to ascertain the members due which are in arrears and enquire
whether necessary steps have been taken for their recovery. The amount considered
irrecoverable, if any, should be written off.
(f) Verify the internal check as regards members being charged with the price of foodstuffs and
drinks provided to them and their guests as well as with the fees chargeable for the special
service rendered such as billiards, tennis, etc.
(g) Trace debits for a selected period from subsidiary registers maintained in respect of supplies
and services to members to confirm that the account of every member has been debited with
amounts recoverable from him.
(h) Vouch purchase of sports items, furniture, crockery, etc and trace the entries into the
respective stock registers. Vouch purchases of foodstuffs, cigars, wines, etc and test their sale
price so as to confirm that the normal rates of profit have been earned on their sales. The stock of
unsold provisions and stores, at the end of year should be verified physically and the valuation
checked.

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(i) Check the stock of furniture, sports material and other assets physically with the respective
stock registers or inventories prepared at the end of the year.
(j) Inspect the share scrips and bonds in respect of investments, check their current values for
disclosure in final accounts, also ascertain that the arrangements for their safe custody are
satisfactory, check the accrual of income there from and provision of income-tax thereon.
(k) Examine the financial powers of the secretary and, if these have been exceeded, report
specific case for confirmation by the Managing Committee.

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PROCEDURE TO AUDIT OF CLUB

As part of its normal operation, an investment club should establish a Verification Committee to
conduct an annual verification of the records. The purpose is to confirm that the club's books
agree with the bank and broker statements.
To prepare, the Treasurer should make certain that all transactions have been entered for the
period to be audited. The Treasurer should also utilize the Audit utility in the software before
printing the necessary reports.
The following reports should be printed. Set the parameter dates for the period to be verified:

Complete Journal/Ledger
Cash Journal
Cash Contributions Report
Transactions Summary (put a check mark in the box Subtotal Tax. Distrib's.) This groups
transactions on a stock-by-stock basis to make it easier to verify the DRP statements. It also
simplifies the task of double-checking the dividend totals against the 1099s received in

January or February.)
Individual Investment History for each stock owned during the period
Individual Valuation Units Ledger for each member (hand out ahead of time to members.)
End-of-period Valuation Statement
Petty Cash Journal, if the club uses the Petty Cash Account

In addition to the NAIC Club Accounting Software reports, the following documents should be
collected for review by the committee:

All broker statements and transaction statements

All bank statements
All deposit slips, if available
All canceled checks
All Dividend Reinvestment Plan statements
All 1099-DIV and 1099-INT statements
All stock certificates in the possession of the club

NOTE: The documents collected should include every statement issued during the period to be
verified plus the last statement prior to the start of the period. This facilitates verification of the

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beginning balance. Sort each group of documents in date sequence to simplify the work of the
committee.
Verification Procedure - The committee should:

Check the bank and broker statements to verify that every entry matches the club's books,
including the dates. Verify that the club's books show the same number of shares and

dividend totals for each stock as the broker and DRP statements.
Verify that each member's payments have been properly recorded as Payments, Fees, or
Petty Cash Contributions, as appropriate.

Verify that the number of units bought each

month reflects a change from the previous month, as a cross-check on the Valuation
Statements being processed and saved each month. They would only remain the same if

there were no activity at all.

Cross-check the check register, bank statement and club books.
Verify the beginning and ending balances for all accounts, and the Valuation Statement.
Complete the Annual Verification Report

TYPES OF CLUB
The types of club are explain as follows:
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1. Buying Club:
Buying clubs are organized to help members purchase goods that might otherwise be difficult or
expensive to obtain. The food conspiracy and Seikatsu club are two examples of different food
buying clubs that help members purchase organic or natural food that might otherwise be
unavailable. Many cooperative grocery stores began as loosely organized buying clubs, and
larger organizations such as United Natural Foods and the Weston A. Price Foundation
encourage buying clubs as a way to expand market or mind share for their products.
2. Country or Sports Club:
There are two types of athletic and sports clubs, those organized for sporting participants (which
include athletic clubs and country clubs), and those primarily for spectator fans of a team.
Athletic and country clubs offer one or more recreational sports facilities to their members. Such
clubs may also offer social activities and facilities, and some members may join primarily to take
advantage of the social opportunities. Country clubs offer a variety of recreational sports
facilities to its members and are usually located in suburban or rural areas. Most country clubs
have golf. Swimming pools, tennis courts, polo grounds and exercise facilities are also common.
Country clubs usually provide dining facilities to their members and guests, and frequently host
catered events like weddings. Similar clubs in urban areas are often called athletic clubs. These
clubs often feature indoor sports, such as indoor tennis, squash, basketball, boxing, and exercise
facilities.
3. Fraternities and Sororities:
Fraternities and sororities are social clubs of secondary or higher education students.
Membership in these organizations is generally by invitation only.
4. Hobby Club:
Hobbies are practiced for interest and enjoyment, rather than financial reward.

Examples

include science fiction clubs, ham radio, Model Railroading, collecting, creative and artistic
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pursuits, making, tinkering, sports and adult education. Engaging in a hobby can lead to
acquiring substantial skill, knowledge, and experience. However, personal fulfillment is the aim.
5. Personal Club:
Personal Clubs are similar to Hobby Clubs. These clubs are run by a few close friends. These
friends or family members do things they like to do together. They might even make a personal
website for their club
6. Professional Societies:
These organizations are partly social, partly professional in nature and provide professionals with
opportunities for advanced education, presentations on current research, business contacts, public
advocacy for the profession and other advantages. Examples of these groups include medical
associations, scientific societies, autograph club and bar associations.
7. School Club:
These are activities performed by students that fall outside the realm of classes. Such clubs may
fall outside the normal curriculum of school or university education or, as in the case of subject
matter clubs (e.g. student chapters of professional societies), may supplement the curriculum
through informal meetings and professional mentoring.
8. Service Club:
A service club is a type of voluntary organization where members meet regularly for social
outings and to perform charitable works either by direct hands-on efforts or by raising money for
other organizations
9. Social Activities Club:
Social activities clubs are a modern combination of several other types of clubs and reflect
todays more eclectic and varied society. These clubs are centered on the activities available to
the club members in the city or area in which the club is located. Because the purpose of these
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clubs is split between general social interactions and taking part in the events themselves, clubs
tend to have more single members than married ones.

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COMPANY PROFILE BANGALOW BOWLING AND SPORTS CLUB

LIMITED
The name Bangalow appears to have been derived from an aboriginal word, Bangalla, said to
mean a low hill or kind of palm tree.
These palms are still present today and are a major characteristic of the rustic towns.
It is likely that the surrounding area of Bangalow became a home for cedar cutters temporarily in
the 1840s with little development taking place here until 1881 when the town was first settled
by Thomas Robinson.
The town was known as Bangaloe until 1907, when the modernised spelling came into use. At
this time the town became the centre of the surrounding agricultural farmlands. It is only in
recent years that the charming historic streetscape of the main street, the stylish cafes and
boutique shops, the monthly markets and its proximity of being just a little above Byron Bay has
increased Bangalows appeal as a tourist destination. Fresh local produce is a feature in the
award winning cafes, restaurants and farmers markets.
Just a little above Byron Bay (just 15 minutes drive) over the picturesque rolling green hills,
Bangalow is a cosy village with a vintage feel, set up in the hills of the Byron Bay hinterland.
Yours to shop, dine, play and explore, Bangalow has many charming characteristics and unique
features that attract visitors of all tastes. A relaxed pace town, Bangalow is quickly becoming a
popular destination for visitors as a day trip across from Byron Bay, a full holiday experience
or as a place to make your home.
Bangalow is renowned for its strong feeling of community and with one of the largest
populations of families in the Shire there is a high level of care for community values. Bangalow
is also renowned for its picturesque countryside and agricultural pursuits. The surrounding green,
rolling hills are a patchwork of fruit trees, macadamia orchards, coffee plantations, dairy cattle
and other agricultural activities which offer much to visitors sampling the local produce.

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AUDITORS REPORT
Report on the Financial Report:
We have reviewed the accompanying financial report of Bangalow Bowling & Sports Club Ltd,
which comprises the statement of financial position as at 31 December 2015, the statement of
financial performance, statement of changes in equity and statement of cash flows for the year
then ended, notes comprising a summary of significant accounting policies and other explanatory
information and the directors' declaration.
Directors' Responsibility for the Financial Report:
The directors of the company are responsible for the preparation and fair presentation of the
financial report that gives a true and fair value in accordance with Australian Accounting
Standards and the Corporations Act 2001 and for such internal control as the directors determine
is necessary to enable the presentation of the financial report is free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility:
Our responsibility is to express a conclusion on the financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE
2415 Review of a Financial Report - Company Limited by Guarantee, in order to state whether,
on the basis of the procedures described, we have become aware of any matter that makes us
believe that the financial report is not in accordance with the Corporations Act 2001 including:
giving a true and fair view of the company's financial position as at 31 December 2015 and its
performance for the year ended on that date; and complying with the Australian Accounting
Standards and Corporations Regulations 2001.
ASRE 2415 requires that we comply with the ethical requirements relevant to the review of the
financial report. A review of a financial report consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance with
Australian Auditing standards and consequently does not enable us to obtain assurance that we

20

would become aware of all significant matters that might be identified as an audit. Accordingly,
we do not express an audit opinion.
Independence:
In conducting our review, we have compiled with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the
Corporations Act 2001, provided by the directors of Bangalow Bowling & Sports Club Ltd on 29
February 2016 would be in the same terms if provided to the directors as at the date of this
reviewer's report.
Basis for Qualified Conclusion:
Balance Sheet The company's underlying records for its plant and equipment is a depreciation schedule which
does not itemise individual items of plant & equipment. This therefore does not allow for a
review of any item for the purpose of considering an impairment of the assets net market value
or for assessing the appropriateness of depreciation at an itemised level.
As the information provided to us was limited, our review procedures were restricted to an
agreement of the depreciation schedule to the ledger balance only.
Income Statement Cash from the courtesy bus, raffles, entertainment, donations and juke box are significant
sources of revenue for the company. Although the company has implemented systems of control
to ensure that monies received at its office are properly recorded in the financial records, controls
over collection of revenue from these sources prior to receipt require improvement. Controls
include suitable assessments and reconciliation procedures thereof to cash collected.
Accordingly, as the evidence available to us was limited, our review procedures with respect to
revenue from these sources had to be restricted to the amounts recorded in the financial records.

21

Conclusion:
Based on our review, which is not an audit, we have not, except for the effects of those described
in the Basis for Qualified Conclusion paragraph, become aware of any matter that makes us
believe that the financial report of Bangalow Bowling & Sports Club Ltd is not in accordance
with the Corporations Act 2001 including:
(i)

giving a true and fair view of the company's and consolidated entity's financial
position as at 31 December 2015 of its performance for the year ended on that date,

(ii)

and
(ii) complying with Australian Accounting Standards and the Corporations
Regulations 2001.

Emphasis of Matters:
Without further qualification to the conclusion expressed above, attention is drawn to the
following:
(1) Events after the reporting period:
Attention is drawn to note 14 which deals with the sale of land.
(2) Going concern:
The company's cashflow statement on shows that the company's operations have improved in the
2015 financial year. The company's cashflow from operations has improved as a result of the
contracting out of the kitchen and improved bar sales in the second half of the year, which
resulted in the club generating positive net cash flow from operations.
While the company's Board is confident that the club has turned the corner and will continue to
trade profitably in the future, the ongoing support of ANZ Bank or another lender will be crucial
to their future viability.
It is our opinion that the reliance on future support from their current lender, ANZ or another
alternative lender will affect the company's ability to continue as a going concern.

22

(3) Property valuation:

The company's balance sheet shows that the company's liabilities exceed its assets by $195,055.
A major component of the company's asset base is its property. However it should be noted that
the company applies the cost method as its accounting policy for this property. The cost as
disclosed is $8,000, whereas the land valuation as undertaken by the NSW Government
department is stated in note 8(a) as $600,000.
Other Matters:
(i) Matters relating to the Electronic Publication of the reviewed:
Financial Report This auditor's report relates to the financial report of Bangalow Bowling &
Sports Club Ltd for the year ended 31 December 2015 included on the Bangalow Bowling &
Sports Club Ltd website. The Club's directors are responsible for the integrity of the Bangalow
Bowling & Sports Club Ltd website. We have not been engaged to report on the integrity of the
Bangalow Bowling & Sports Club Ltd website. The auditor's report refers only to the subject
matter described above. It does not provide an opinion on any other information which may have
been hyperlinked to/from these statements. If users of the financial report are concerned with the
inherent risks arising from publication on a website, they are advised to refer to the hard copy of
the reviewed financial report to confirm the information contained in this website version of the
financial report.

23

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER, 2015

Particulars

Note

2015

2014

ASSETS
CURRENT ASSETS
Cash and Cash Equivalents

10,473

11,940

Receivables

193

1,280

Inventories on Hand

13,658
24,324

12,665
25,875

TOTAL CURRENT ASSETS

NON-CURRENT ASSETS

750

Shares in Independent Liquor Group

Property, Plant and Equipment

7(b)

750

1,94,475
1,95,225

2,10,159
2,10,909

2,19,549

2,36,784

TOTAL NON-CURRENT ASSETS

TOTAL ASSETS
CURRENT LIABILITIES

9,804

8,344
66,995

Bank Overdraft

40,085

Accounts Payable

1,27,822

Borrowings

10

Provisions

11

5,634
1,83,345

10

2,31,259
2,31,259

1,89,178
1,89,178

4,14,604

4,50,180

(1,95,055)

(2,13,396)

1,78,020
7,643
2,61,002

TOTAL CURRENT LIABILITIES

NON-CURRENT LIABILITIES
Borrowings
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET (LIABILITIES)/ASSETS

24

MEMBERS EQUITY
Retained Profits/(Deficit)

(1,95,055)

TOTAL MEMBERS EQUITY

(2,13,396)

(1,95,055)

(2,13,396)

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED

31 DECEMBER, 2015
Particulars

Note

2015

2014

REVENUE

4,67,875

5,70,593

OTHER INCOME

41,450

85,046

EMPLOYEE BENEFITS EXPENSE

(99,094)

(2,35,059)

BORROWING COSTS

(10,451)

(10,344)

(1,48,910)

(1,75,566)

PURCHASES
DEPRECIATION EXPENSE

(26,210)

(26,180)

OTHER EXPENSES

(2,06,319)

(2,11,687)

18,341

(3,197)

18,341

(3,197)

PROFIT/(LOSS) BEFORE INCOME TAX

INCOME TAX EXPENSE

1(g)

PROFIT/(LOSS) AFTER INCOME TAX

EXPENSE

25

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31

DECEMBER, 2015
Particulars

2015

2014

(2,13,396)

(2,05,098)

2,000

(7,101)

18,341

(3,197)

(1,95,055)

(2,13,396)

RETAINED PROFITS/(LOSS) AT THE BEGINNING OF

THE YEAR
EXTRAORDINARY ITEMS
PRIOR YEAR ADJUSTMENT TO UNIT HOLDERS
LOAN
ADJUSTMENT FOR EXCLUSION OF SUB - CLUBS
NET PROFIT/(LOSS)
RETAINED PROFITS/(LOSS) AT THE END OF THE
FINANCIAL YEAR

26

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER

2015
Particulars

Note

2015

2014

i. CASH FLOWS FROM OPERATING

ACTIVITIES
Receipt from Option Free Land

35,000

Receipt from members and customers

4,67,875

Payments to suppliers/ employees

(4,75,231)

Interest paid

80,000
5,75,639
(6,58,200)

(10,451)

(10,344)

17,193

(12,905)

(4,706)

(30,022)

(4,706)

(30,022)

Net cash provided from/(used in) operating

activities

3b

ii. CASH FLOWS FROM INVESTING

ACTIVITIES
Payment for property, plant and equipment
Net cash provided from/(used in) investing
activities
iii. CASH FLOWS FROM FINANCING
ACTIVITIES
Repayment of borrowings Gaming Machine Loan

(10,585)
52,666
(48,150)

Proceeds for borrowings Unit Trust

(8,515)

(5,292)

Repayment of borrowings Directors

(14584)

Repayment of borrowings ANZ Loan

Net cash provided from financing activities
Net increase/(decrease) in cash held

(1,467)

36,950
(4,735)
26,923
(16,004)

27

Cash at the beginning of the financial year (ex sub-

11,940

27,944

10,473

11,940

clubs)
Cash at the end of financial year

13a

28

CONCLUSION
This project gives the correct ideas about how the major areas can be found by way of effective
auditing system i.e. errors, frauds, manipulations etc. form this auditor get the clear idea. Project
also contain that how to conduct audit of the clubs, what are the various procedure through
which audit of clubs should be done.
Form auditing point of view, there is proper follow up of work done in every organization
whether it is club or any other company there is no misconduct of transactions is taken places for
that purpose the auditing is very important aspect in todays scenario form companys point of
view.
Non- profit organizations play a vital role in strengthening democracy promoting civil liberties
and adding richness and diversity to community life. Over the course of its history, Bangalow
Bowling and Sports Club has provided a strong, collective voice to inform and influence public
policy at local, state and national level.

29

BIBLIOGRAPHY
www.wikipedia.com
www.slideshare.net
Advanced Auditing Book MCOM Part II (Author - Ainapure)
www.bangalowbowlo.com.au
www.scribd.com

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