(1) The cash balances (including the amount of permanent advance), valuable stores, investments, securities in favour of Local Authorities, postage stamps, revenue stamps, court stamps and monetary and saleable forms, shall be physically verified by the auditor in the presence of the Principal Officer or officer authorised by him in this behalf during the course of audit and result of such verification shall be recorded in the cash book or the Stock Book concerned as the case may be, under the dated signature of the auditor.
(2) In case, the Principal Officer or the officer authorised by him in this behalf refuses or fails to get the physical verification, done by the auditor, it will be treated wilful non compliance of the requisition for the purpose of sub-section (1) of section 7 of the Act. Any discrepancy detected as a result of physical verification will also be incorporated in the relevant paragraphs of the audit report.