Other Income Audit Working Paper — ICAI Audit Working Paper
(Following draft may be used as an example)
Background:
Other Income of {{client_name}} comprises interest income (on FDs, intercompany loans, investments), dividend income, foreign exchange gains, gain on sale of investments / fixed assets, lease rental income, scrap sales and miscellaneous income that does not arise from the principal revenue-generating activities.
Purpose:
To document the audit work on the completeness, accuracy, cut-off and classification of Other Income recognised in the financial statements of {{client_name}} for the year ended {{period_end}}.
Work Done:
1. Schedule Build-up and Reconciliation
- Obtained the breakup of Other Income from management and reconciled to the trial balance and Schedule III line items.
- Verified mapping of each component to the correct sub-line under 'Other Income' as per Schedule III, Part II.
- Reviewed prior-year disclosures and compared with current year for new / dropped income heads.
2. Interest Income
- Recomputed interest income on fixed deposits using bank-issued interest certificates and Form 26AS.
- For interest on intercompany loans / debt instruments, recomputed using the EIR method under Ind AS 109.
- Verified TDS deducted on interest is reconciled with Form 26AS and the receivable / advance tax balance.
3. Dividend Income
- Cross-checked dividend received with demat statements and bank credits.
- Verified that dividend income is recognised when the right to receive payment is established (record date), per Ind AS 109.
4. Foreign Exchange Gains / (Losses)
- For monetary items, verified restatement at closing exchange rate per Ind AS 21 / AS 11.
- Reviewed netting of realised vs unrealised FX gains and losses; ensured no netting where individually material.
- For derivative-related FX gains, verified consistency with the hedge accounting policy if applicable.
5. Gain on Sale of Investments / Assets
- Tied to the disposal working paper for fixed assets and investments.
- Recomputed gain/loss on a sample basis.
6. Other / Miscellaneous Income
- For lease rental, scrap sales and other miscellaneous income, obtained the underlying contracts and invoices on a sample basis.
- Verified GST applicability and reconciliation with GSTR-1.
- Reviewed any item > materiality threshold for the right accounting treatment (revenue under Ind AS 115 vs other income).
7. Cut-off
- Selected entries from the last week before and the first week after the year-end; verified period of accrual and supporting documents.
- Identified any income recognised against next year's services / interest accruals.
8. Analytical Procedures
- Performed reasonableness check on interest income vs average FD / investment balances and prevailing yield.
- Compared each Other Income head as a percentage of total Other Income year-on-year; investigated variances > 25%.
Variance Analysis
| Particulars | Previous Year (₹) | Current Year (₹) | Variance (%) | Remarks |
|---|
| Interest income on FDs | | | | |
| Interest income on investments / loans | | | | |
| Dividend income | | | | |
| Net foreign-exchange gain | | | | |
| Gain on sale of fixed assets | | | | |
| Gain on sale of investments | | | | |
| Lease rental income | | | | |
| Scrap / Miscellaneous | | | | |
| Total Other Income | | | | |
Conclusion:
Based on the procedures performed, Other Income recognised by {{client_name}} for the year ended {{period_end}} is complete, accurate, recognised in the correct period and classified in line with Schedule III, Ind AS 109 / 115 and AS 9 / AS 13 as applicable. No material misstatements were identified.
