1. UNIT-5 DIVISIBLE PROFITS&DIVIDENDS INVESTIGATION
AUDIT OF COMPUTERIZED ACCOUNTING

2. INVESTIGATION
An Investigation may be defined as a close examination of accounts and records and a search for the relevant data, with a view to ascertaining any fact for some special purpose...

3. CLASSIFICATION OF INVESTGATION
Evaluations.
Reviews
Surveys
Analyses
Special Audits
Statutory Investigation

4. MODE OF INVESTIGATION General particulars of Business
No. of. Plants and their Location
No. of. Sales centers and their location.
List of share holders.
Names of directors and other executives.
Credit Repots
Area of Business
Manufacturing position
Organization structure
Financial position
Tax liability
Assets
Investments
Liabilities

5. STATUTORY INVESTIGATION
An Statutory Investigation into the affairs of the company means an Investigation of all its business affairs
Secs of the Companies act deals with the Investigation of the affairs of the company to be made by the Central government;

6. WHEN IT IS MADE On Report by The Registrar(Sec.235(1))
On application by the members of the company[Secs.235(2)(a)(b) and 236]
Investigation in other cases[Sec.237]
Where Investigation is Mandatory[Sec 237(a)]
Where investigation is discretionary[Sec.237(b)]

7. INSPECTOR AND HIS POWERS
Only an Individual can be appointed as inspector to conduct an Investigation.-Ashoka Marketing Ltd.vs.Union of India.
To investigate affairs of any other company in same group.
To require officers of the company to produce books, etc., and to assist.
To require any body corporate to give information.
To keep books papers in custody.
To examine officers on oath.
To seize books and papers

8. INSPECTOR REPORT AND IMPORTANCE OF REPORT
The Inspector may and, if so directed by the central government must, make interim report to the government.
Manner of disposal of report by the central government [Sec.241(2)]
Prosecution[Sec.242]
Application to the court for winding up of company[Sec.243]
Expenses of Investigation[Sec.245]
Investigation of ownership of company[sec.247]

9. DIVISIBLE PROFITS
All the profits of the company are not divisible profits. Only those profits which can be legally made available to share holders by the way of dividend.
It is to be noted that divisible profits do not include “profit on revaluation” of fixed assets and other profits of “capital nature”
Sec 205 of the companies act 1956 lays down the rules for computing divisible profits.

10. DETERMINANTS OF DIVISIBLE PROFITS
Memorandum & Articles of Association
The Companies act,1956.
Legal Decisions.
Principles of accountancy.
Regulations for management of companies limited by shares contained in the Table “A” of schedule1 make some provisions in the various clauses i.e. Clause of Table “A”

11. DIVIDEND
It refers to that amount of divisible profits which is distributed among the share holders of the company. A member (share holder) is entitled to receive dividend when it is declared by the board of directors as per the provisions of the Article.

12. TYPES OF DIVIDENDS Preference Dividend Unclaimed Dividend
Proposed Dividend
Final Dividend
Interim Dividend
Corporate Dividend Tax

13. LEGAL PROVISIONS RELATING TO DIVIDENDS
Sources of dividends.[Sec.205]
Dividends not to be paid out of capital
Payment of dividend in proportion of amount paid up on shares
Dividends in cash only.
Transfer to dividend bank and unclaimed dividend account

14. FACTORS DETERMINIG THE PAYMENT OF DIVIDEND
Nature of earnings
Liquidity.
Future plans
Capital Structure
Share value
Tax Implications