EM3682 - Recalculating Profits: Private Expenditure: Cheque Drawings

Personal cheques drawn on business and private accounts may represent recurring items of expenditure, moneys invested elsewhere, or expenditure of an exceptional character. You should watch for gaps in the established pattern of recurring expenditure. The absence in a particular year of a cheque payment for school fees or insurance premiums where such payments regularly appear in the preceding and succeeding years may point to the existence of undisclosed bank accounts or to exceptional payments in cash requiring inclusion in the cash section of the schedule of personal and private expenditure.

In substantial cases where a detailed schedule is being compiled, you may find it useful to prepare a spreadsheet for each year and enter items paid by cheque and cashin separately headed columns. These methods will help to focus attention on any gaps in the normal pattern. (The text at this point has been withheld under the Code of Practice on Access to Government Information)

If only the yearly balances on private accounts, savings accounts, credit card accounts etc are considered you may well miss items of personal expenditure. Examination of such accounts should include an investigation of withdrawals during the year.