What are Impersonal ledgers?
Impersonal ledgers are also called General Ledgers or Nominal Ledgers. They are of two types such as Nominal Accounts and Real Accounts. Nominal accounts are related to Trading and Profit A Loss Accounts whereas real accounts record assets. If these accounts are not correct, they will affect the Profit and Loss Account and the Balance Sheet. Therefore, the auditor should vouch the items appearing in the impersonal ledgers thoroughly so that the chances of manipulation by fictitious entries of expenses can be eliminated.
The transactions in the Impersonal Ledger relate to Profit and Loss Account. These transactions will be recorded either from the Cash Book or the Journal or the totals of the subsidiary books of prime entry. The Impersonal Ledger, therefore, will be vouched as follows:
How are Impersonal ledger vouched?
1. The postings of cash transactions to the Impersonal Ledger should be carefully checked.
2. The Journal should be carefully vouched to ensure that each entry is supported by sufficient evidence.
3. The auditor should carefully check the totals of the various other books of original entry and the postings thereof to the Impersonal Ledger.
4. Sometimes direct entries are passed from one account to another in the Impersonal Ledger. In such a case the auditor should vouch them in the manner in which he examines those items, which pass through the Journal.
5. He should check very carefully the adjustments, which are usually done at the end of the year when the final accounts are prepared. Such adjustments include outstanding assets and liabilities, depreciation, etc. As these adjustments pass through the Journal, their postings to the Impersonal Ledger should be checked. Special attention should be paid to these adjustments because they ultimately affect the position reflected by the final accounts.
6. The total of the subsidiary books should be checked.
7. The balances in the Impersonal Ledger should be checked and verified with the Trial Balance.