Avoid these common mistakes for a smooth audit: Expert tips from a top Mumbai auditor

Mr. Vasudev Manjrekar, Founder of Shashank Consultancy Services LLP
Mr. Vasudev Manjrekar, Founder of Shashank Consultancy Services LLP

As your housing society prepares for the annual audit, we are pleased to present an insightful interview with Mr. Vasudev Manjrekar of Shashank Consultancy Services. With nearly three decades of experience in society accounting and auditing, he has been a pivotal figure in the industry since establishing Shashank Consultancy Services in 1997. We asked him about the common concerns of RWA members, providing valuable insights to ensure a smooth audit process for your society.

Q. For how long have you and your team been conducting audits for societies?

I’ve got over 25 years of experience in accounting, specializing in billing, audit, and taxation for housing, commercial, and industrial societies. I began my career at Tata Motors and Hindustan Unilever, then started my consultancy firm in 1997. As a certified auditor on the Co-op department’s panel, I’ve worked with many top societies in Mumbai. Since 2013, I’ve been fully dedicated to Shashank Consultancy Services, focusing on audits for gated communities.

Q. From your experience, what are the common pitfalls or mistakes treasurers and accountants make that can complicate the audit process?

The most common mistakes often found include:

  1. Delays in providing documentation: This usually occurs when supporting vouchers are not organised efficiently, making it difficult to match expenses with the vouchers presented.
  2. Discrepancies in bank balances: Treasurers and accountants must ensure that the balances recorded in the society’s books match the actual balances reported by the bank. Failure to reconcile these balances can raise questions about the accuracy and integrity of the financial statements.

Q. What advice would you give RWA members to make an auditor’s job easier? Please provide a 5-6 point checklist for the same?

To ensure a smooth audit:

  1. Adhere to sanctioned expense slabs to prevent disputes.
  2. Validate all expenses to ensure every expense has vouchers and proper billing.
  3. Monitor costs to prevent excessive spending.
  4. Organise vouchers chronologically to facilitate efficient audit.
  5. Reconcile bank statements monthly to detect discrepancies or fictitious entries.
  6. Match received payments with transactions to ensure accuracy.

Q. What should a newly elected treasurer do in the first 30 days on the job to set up for a successful term?

In the first 30 days, a newly elected treasurer should:

  1. Visit the bank to update signatures, ensuring operational continuity.
  2. Check all cash and bank vouchers from the accountant for accuracy.
  3. Compare the cash book balance with actual cash on hand and report any discrepancies to the committee immediately.
  4. Prioritise the annual maintenance contracts (AMC) and collaborate with the committee to establish clear payment guidelines.
  5. Define the levels of committee involvement required for sanctioning expenses and the extent of general body involvement in decision-making.
  6. Instruct the accountant to provide monthly income and expenditure accounts within five days of the month’s end, along with cumulative year figures within five days of the closing month.

Q. How should RWA members with no finance background keep up with new accounting standards?

Managing audits without a finance background can be challenging, making professional help essential. Professional assistance ensures compliance with practices such as filing GST returns and income tax returns accurately and punctually, offering guidance and assurance that financial matters are handled correctly and following regulations.

Q. Lastly, what do you enjoy most about working with societies and RWAs? Do you have any memorable experiences or success stories you’d like to share?

Working with societies and RWAs is fulfilling due to the community engagement and the variety of challenges we face. One memorable incident was managing a society in Worli during an attempted robbery. The situation became chaotic when the police mistook the night watchmen for the culprits and even beat them up. I intervened to support the watchmen and ensured they were not unjustly punished. Eventually, the real robber was caught, and I’m glad I was able to prevent further injustice.

For further inquiries or consultations, Mr Vasudev Manjrekar can be reached at [email protected].

What do you think?