Regular checking of all the daily transactions is known as Routine Checking. Routine checking incorporates the following tasks:
* Checking of record in primary books, costing, transfer etc.
* Checking transfer of transactions from original books of accounts to ledger account.
* Checking debit and credit side of various accounts.
* Checking transfer of balances of various accounts to other pages or accounts or statements.
Various signs are used while conducting routine check. Such signs provides the proof of routine checking of transactions.
Signs which are used in audit should be small and clear. Generally red or pink color is used while conducting routine check. But green color is used while conducting final audit.
Advantages Of Routine Checking
Following benefits can be obtained from the routine checking:
1. All the original entries will be checked; so all the errors and frauds can be detected easily.
2. All the entries and posting will be tested.
3. Routine checking helps to conduct final audit because all the balancing and totals have already been checked.
4. Separate and specific staffs are not needed because it is a regular process.
Disadvantages Of Routine Checking
Followings are the limitations of routine checking:
1. Routine checking is a mechanical test, so the staff who performs this work does not have inspiration. So, there are chances of leaving errors and frauds.
2. Routine checking can only detect small errors and frauds but not the planned frauds.
3. Routine checking is not needed where self balancing system is applied.
4. Routine checking cannot detect principle and compensating errors.