What is audit of share capital?

SEBI authorises practising Company Secretaries to undertake Reconciliation of Share Capital Audit to certify reconciliation of total shares of a company held in NSDL, CDSL and in physical form by the shareholders with the total admitted, issued and listed capital.

What is audit of share capital is important in auditing?

The share capital of the company is of two kinds, namely, Equity share capital and Preference share capital. Share capital means capital raised by the company by issue of shares. This issue of share capital should be audited to verify the compliance of requirements and provisions of Companies Act.

How do you conduct the audit of share capital?

Audit Procedures for Share Capital

  1. Obtain the client’s articles of incorporation, bylaws and board meeting minutes.
  2. Agree the authorized share capital to the supporting documents above.
  3. Reconcile the authorized share capital with the general ledger.

What are the four types of share capital?

Below given are the different types of share capital:

  • Authorized Share Capital.
  • Issued Share Capital.
  • Unissued Share Capital.
  • Subscribed Capital.
  • Called-Up Capital.
  • Paid-Up Capital.
  • Uncalled Share Capital.
  • Reserve Share Capital.

How many types of audits are there?

There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits. External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor’s opinion which is included in the audit report.

How an auditor do the verification of share capital?

The auditor’s role in verifying the Share Capital is listed below: 1. Verify Memorandum of Association and Register of Members: In case of first audit the auditor should check the Memorandum of Association, list of share holders and register of members for verification of share capital.

What are the classification of share capital?

Share capital can be classified as authorised, issued, subscribed, called up and paid-up share capital.

How is share capital calculated?

Formula 1: Share capital equals the issue price per share times the number of outstanding shares. Formula 2: Share capital equals the number of shares times the par value of stock plus the paid in capital in excess of par value.