AUDIT BY C. A. FIRMS ON BEHALF OF RNI & ABC

Useful links are:

http://www.auditbureau.org/audrchklst.htm

https://rni.nic.in/scheme.asp

AUDIT BY CHARTERED ACCOUNTANTS FIRMS ON BEHALF OF REGISTAR OF NEWSPAPERS FOR INDIA (RNI)

I    OBJECTIVE OF AUDIT

The Registrar of Newspapers for India (RNI) receives circulation data from the publications in the prescribed annual returns which is filed by the publishers on periodical basis.  The said circulation data is used by various Government departments, for example by DAVP for allotment of government advertisements and by RNI for allotment of quota for purchase/import of newsprint etc.  These returns/reports are to be certified by the auditors/Chartered Accountants of publisher.

RNI now intends to carry out the sample verification of the circulation data submitted by the publishers from their own panel auditors (i.e. Chartered Accountants firms) to be appointed by RNI.  The objective of the said audit shall be to reconfirm the correctness and geniuses of the circulation data/figures submitted by the publications in their returns/report.

II   SCOPE OF WORK/AUDIT

The scope of work to be followed by the RNI panel auditors while verifying these returns to ensure correctness and guineness of the data furnished by publisher is outlined in brief as under.  These are only suggestive guidelines and the auditor shall have access to all the relevant data and records maintained by the publisher.  The publisher shall extend full support to auditors.  Further, the Auditor shall maintain the confidentially of the records and data and it should not be shared with any party/ person.

A)      VERIFICATION OF PRINTING

i)                  The printing capacity of the publisher(s) and/or the printer of publication should be examined keeping in view the level of printing achieved by the publisher.

 

 ii)      Printing facility owned by the publisher:-

 a)      Print Order/ Daily Press Statement:

 The print order which contains the number of copies edition/city-wise printed for each day/ period shall be test verified by auditors.  Further, the supporting document such as indent etc. based on which the print order is prepared by publisher shall be verified and any significant variation in the number of copies be enquired so as to establish the correctness of the print order based on which the number of copies printed are mentioned in the annual statement.

 b)      Machine Room Return

 The Machine Room Return/record which contains the details of the printing is to be maintained by the publisher.

 The auditor shall test verify the Machine Room Returns/records and Print orders in original.  (These must be signed by some responsible officer of the publication).

 c)       The details given in the annual return should be in consonance with the daily print order and MRR maintained by the publisher.  Variation if any should be enquired from publisher and if required adjustment be made in the return to give the correct data.

 iii)      Printing at outside press:

 Where a publication is printed from outside press not owned by the publisher, printers bills showing number of copies printed and the rate per form maintained by the publisher shall be verified by the auditor.

 Where the printing press is an associate concern, or subsidiary company, printing records maintained by such printers shall be verified by the auditor.

 iv)     The auditors may visit the printing press of the publisher to verify the actual printing at the press where the printing is owned by the publisher or at the press of the outside printing press.

 B      DESPATCH AND DISTRIBUTION OF COPIES:

 i)      The actual dispatches of the copies shall be verified by the auditor firm at the time of visit to the press with the dispatch challans, transporters GRN etc. In the cases where the copies are dispatched through road and where the copies are dispatched through railways air and by post parcel etc. the supporting proof for such dispatch shall be verified during their morning visit to the printing press.

 Further the reconciliation of the copies printed as per MRR/PO with the number of copies dispatched should be carried out on the day of visit to the press and also for some of the earlier days based on the records available in the office of the publisher. 

 ii)      The distribution/sale of publication be physically verified by visiting the distribution centers where the copies are distributed/sold.  On visit to the centre the copies dispatched from the press and received at the centre should be verified and actual distribution being made by the agents to the hawkers/sub-agents etc. should also be verified.  Any variation in copies sold or % of commission paid be reported. If any copies are sold for which no money is received the same be enquired. 

 iii)     Where the copies are sold by the publisher through its sole/principle agent the distribution centre of the agents be visited and auditors can verify the distribution record of such agent.

 (Agent who are selling more than 10% of the total supply of the publisher subject to minimum of 15,000 copies per day should be considered as the principle/sole agent for this purpose)

 C)      NEWSPRINT CONSUMPTION:

 i)       Receipt of Newsprint

 The purchase/receipt of newsprint be verified by auditor with reference to invoice, transporter GRN, delivery/dispatch documents, packing list, bank statement and correspondence of suppliers etc.  If required direct confirmations from the newsprint suppliers may also be obtained by the auditor.

 ii)       In case a publication has been issued Eligibility Certificate for import of newspaper, the relevant vouchers/bills and receipts in original be verified and quantity purchased should tallied with consumption.

 iii)       Physical verification of newsprint stocks may be carried out to ensure its conformity with the records at the time of visit to publisher's office.

 iv)      The summary reconciling acquisition with consumption of newsprint and other paper with reference to the copies printed be carried out to ensure the consumption of newsprint vis-à­¶is the actual copies printed.

 v)       Verification of newsprint consumption with reference to Print Orders, Machine Room returns, stock Register and/ or periodic newsprint consumption statements received from outside press.

 vi)      Verify the quantitative records of newsprint stock, receipt and issue etc.  in respect of newsprint consumption and wastage to facilitate reconciliation of newsprint issued for printing and consumed.

 D)      COPIES SOLD THROUGH AGENTS/ SUBSCRIBERS:

 Copies sold through agents/ subscribers to be verified with the following:-

 i)        The sale to agents should be verified with the agents bills/ sale register, railway/ road/ air / posted delivery book etc.

 ii)       The unsold copies received from the agents be verified with the credit notes issued by the publisher.  Further, the accounts of the agents be received to ascertain the cases of unsold copies as these shall not be included in sold copies column.

 iii)       Copies sold through subscriptions be verified with the subscribers register, postage book and delivery book etc.  The records should be maintained in such a manner that the subscriber-wise and dispatch details thereof is verified.

 iv)      In the return submitted to 'RNI' by publisher the average number of copies 'sold' per publishing day is to be disclosed.  The sold copies here shall imply those copies for which the payment has been received within a period of two months.  In case the payment is not received from agent within 2 months the copies equivalent thereto shall be reduced from sold copies however the publisher can take the benefit of such copies deducted in the next period when actual payment is received from agent.  Further the concept of Net Paid Sales as formulated by Audit Bureau of Circulation shall be applied to sold copies figures being submitted by the publisher.

 v)       The billing of the copies of the agents is normally carried out at the net amount after deduction of commission.  The billing be verified to ascertain the cases where the commission being allowed appears to be unreasonable and which loses the significance of paid copies.  The copies sold at the commission in excess of 40% shall not be included in sold copies.

 E)      OTHER FINANCIAL RECORDS:

 Financial and other records connected with printing, distribution and sale etc. of the publication will be reviewed by the auditors.

 F)      REPORT/ CONCLUSION:

 Based on the verification of printing, distribution and circulation records of the publication as detailed above the auditor shall draw a conclusion keeping in view the materiality of observation, whether the circulation figures as reported in the returns submitted by the publishers to RBI are correct or not.  Wherever variations or inconsistency is observed with respect to printing, distribution and circulation etc, the auditors shall carry out adjustments in the circulation figures as reported by publishers in their returns and the returns will be revised and signed by the auditor and sent to RNI along with their report.

 III       AUDIT PLAN:

 The RNI will issue the appointment letter to the auditors along with the authority letter or the concerned publisher authorizing them to visit to their press, distribution center and office.  As per the appointment letter the time period will be specified during which the audit is to be completed and report submitted normally a time frame of 4-6 weeks will be allowed.  Based on this appointment letter the audit will be carried out by the auditor at any time in a surprise manner by visit to printing press, distribution centers and office of the publisher.

 The audit team will be formed keeping in view the number of copies printed by the publisher e.g. in case the number of copies are upto 75,000 the audit team will consist to two persons (one qualified/ senior assistant and one articled clerk) and in case the copies are more than 75,000 the team will consist of three persons (one qualified/ senior assistant and two articles/ paid assistants).  The audit will be monitored and finalized by one partner/ Senior consultant, who will be visiting the office of the publisher for one or two days depending on the copies printed and volume of transactions.

 IV       AUDIT REPORTS:

 Audit observations arising from the audit will be initially discussed by the partner with the publisher during his visit to the office of the publisher at the time of finalization of the audit.Based on these discussions the audit reports along with the annual return duly signed by the auditors will be finalized and sent to the concerned officials of the RNI.  The necessary discussions if any required. 

 V)      FEES AND REIMBURSEMENT OF EXPENSES TO AUDITORS:

 A)      FEES PAYABLE TO AUDITORS

 The fees to the Chartered Accountant firms will be paid based on the number of copies printed by the publisher in the same manner as the fees is pain the Audit Bureau of Circulations (ABC) to their surprise/ recheck auditors.  The fees prescribed by ABC for surprise/ recheck audit is based on the parameter that the audit of publisher is also carried out by their own empanelled auditor who are to certify the figures based on the detailed audit programme laid down by ABC.  The fees for publisher Audit is not prescribed by ABC but fixed between the auditors and publisher.  The fees for Surprise/ recheck audit has been kept considering that substantial procedures are followed by publisher's auditors who also issue a separate report confirming that all the prescribed guidelines of ABC have been followed.

Considering the above the auditors have represented that their fees may be increased at least by 100% of the prescribed fees by ABC as detailed below since RNI has not have a established procedure which the auditors is to follow while certifying the Annual Report of RNI.

 

No. of copies printed	Audit fees as per ABC	Audit fees suggested for RNI keeping in view the 100% increase in the fees offered by ABC
Upto - 25,000	6,500	13,000
25,001 - 75,000	7,500	15,000
75,001 - 1,50,000	8,600	17,200
1,50,001 - 2,50,000	9,700	19,400
2,50,001 - 3,50,000	10,800	21,600
3,50,001 - 4,50,000	12,100	24,200
4,50,001 -  5,50,000	13,500	27,000
5,50,001 - 10,00,000	15,000	30,000
10,00,001 - above	18,000	36,000

 

The above level of fees suggested for carrying out the audit on behalf of RNI is substantially lower as compared to level of fee as recommended by the ICAI for carrying out such special assignment. 

 B)      REIMBURSEMENT OF EXPENSES TO AUDITORS BY PUBLISHERS:

 The auditors are reimbursed traveling, halting and other out of pocket expenses as actually incurred and supported by original bills by ABC for carrying out surprise/ recheck audits.  Further, in the case of appointment of bank Auditors by 'Reserve Bank of India' the level of traveling lodging and boarding expenses has been fixed. Keeping in view the expenses being reimbursed by 'ABC' and Reserve Bank of India the expenses may be reimbursed to the Chartered accountant fir4ms as under:

 i.                    Traveling Expenses:

Partner / Assistant	Class of Travel
Partner	First Air-conditioned Railway, Air (economy class) where the distance of place to be visited is reasonably more or by A/c Taxi if the route is not served by Rail/ Air
Qualified Assistant	A/C II Tier Railway Fare or by Non-A/C Taxi if the route is not served by Rail/Air
Unqualified Assistant	A/C II Tier Railway Fare or by Non-A/C Taxi if the route is not served by Rail/Air.

 The daily conveyance expenses for residence/ hotel to/fro railway station/ airport and hotel to/fro office/ press of the publisher will be paid at actual by Taxi in the case of partners and by Auto in the case of assistants.

 ii.       Lodging and boarding expenses (Lump Sum)

Particulars	Lodging/ boarding expenses to be paid in lump-sum per day of stay (Rs. Per day)
	Major 'A' Class cities	Other places
Partners	5000	4000
Qualified Assistant	4000	3000
Unqualified Assistant	2500	2000

 Note:          'A' cities to include Metro Cities and State Capitals.

 LIST OF CHARTERED ACCOUNTANT FIRMS EMPANLLED WITH O/O RNI