## Audit of Club

### Key Revenue Streams to Verify

Revenue Head	Audit Procedure
Entrance Fees	Verify against register of new members; confirm amount credited to Capital Fund
Subscriptions	Check for arrears; identify irrecoverable dues; verify proper write-off approval
Facilities (Food/Drinks)	Examine pricing policy; verify margin
Services	Check service pricing for reasonableness

### Entry of New Members

Verify the register of new members for completeness
Trace each new member to entrance fees received
Confirm entrance fees are credited to Capital Fund, not revenue

### Subscription Income

Check the subscription register for each member
Identify arrears of subscription — are they recoverable?
Irrecoverable dues must be written off with proper authorisation
Verify no double-counting of subscription income across periods

### Facilities and Services

Examine pricing of club facilities (drinks, food, sports, etc.)
Check purchases are supported by proper bills and invoices
Verify inventory records for consumables
Scrutinise miscellaneous income (e.g., investment income, grants) — note these are non-financial-power receipts and need separate treatment

### Arithmetic Accuracy

Cast (total) all registers — subscription register, fees register
Verify trial balance agrees with ledger
Trace postings for completeness

Worked example

### Example 1

Example 1 — Subscription Arrears Write-off

A club shows Rs 1,20,000 as arrear subscriptions on the balance sheet. The auditor checks: (a) whether each arrear is more than 2 years old, (b) whether the management committee has passed a resolution to write off, and (c) whether the amount was never included in income if it was always doubtful. If no resolution exists, the auditor considers whether the asset is overstated.

### Example 2

Example 2 — Entrance Fees Classification

A club collects Rs 50,000 as entrance fees from 10 new members. The auditor checks the new-members register and confirms all 10 entries exist with signed applications, then traces the Rs 50,000 to the Capital Fund account — NOT to the Income & Expenditure account — because entrance fees are capital receipts for a club.

⚠️ Common exam mistakes

Treating entrance fees as revenue income instead of crediting them to Capital Fund
Failing to check whether irrecoverable subscription arrears have been written off with proper committee approval
Ignoring inventory of consumables (drinks, stationery) — pilferage is common in club settings
Not verifying that investment income (dividends, interest) is correctly classified as non-operational/miscellaneous income

Reference:

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