Assurance

• Statutory Audit Under Indian Companies Act

Audit as per the provisions contained in Sections 139 to 147 under chapter X of the Indian Companies Act. Section 139 saysx that at the first annual general meeting every company shall appoint an individual or firm as it auditor who will hold office from the conclusion of that meeting till the conclusion of the sixth annual general meeting. Section 141 contains that a person shall be eligible for appointment as an auditor of a company only if he is a chartered accountant and in case of a firm whereof majority of partners practicing in India are qualified for appointment as aforesaid may be appointed by its firm name to be auditor of a company. Section 143 which contains provisions regarding powers and duties of auditors contains that the statutory auditor shall make a report to the members of the company on the accounts and financial statements examined by him. The main provisions regarding statutory audit are:

• Auditor will have access to books of accounts and vouchers etc. at all times and he can seek information from officers of the company as he may deem necessary.
• In his report he must state, besides other things, whether the financial statements represent a true and fair view of the state of company's affairs as at the end of the financial year.
• In case of any qualifications in the audit report, the reason for same must be stated in the report.
• Auditor is required to comply with Auditing Standards.
• In case auditor suspects any fraud, he must immediately report the same to the Central Government.
• Internal Audit Under Indian Companies Act

Section 138 read with Rule 13 of Companies (Accounts) Rules, 2014 of the Indian Companies Act contains provisions regarding internal audit.

"13. Companies required to appoint internal auditor.
(1) The following class of companies shall be required to appoint an internal auditor or a firm of internal auditors, namely:-
(a) every listed company; Always applicable
(b) every unlisted public company having–
(i) paid up share capital of fifty crore rupees or more during the preceding financial year; or
(ii) turnover(income) of two hundred crore rupees or more during the preceding financial year; or
(iii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or
(iv) outstanding deposits of twenty five crore rupees or more at any point of time during the preceding financial year; and
(c) every private company having–
(i) turnover of two hundred crore rupees or more during the preceding financial year; or
(ii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year:
Provided that an existing company covered under any of the above criteria shall comply with the requirements of section 138 and this rule within six months of commencement of such section.
Explanation.- For the purposes of this rule – The internal auditor may or may not be an employee of the company; The Audit Committee of the company or the Board shall, in consultation with the Internal Auditor, formulate the scope, functioning, periodicity and methodology for conducting the internal audit. However, the rule specifies that an internal auditor may or may not be an employee of the company. The Internal auditor may be a CA/CWA or any other professional.

• Internal Audit Others

Internal auditors deal with issues that are fundamentally important to the survival and prosperity of any organisation and Reports to Board of Directors and senior management people. They look beyond financial risks and statements to consider wider issues such as the organisation's reputation, business risks, management risk, growth, supplier failure, customer dependency, process risks, technological risks, safety and security risks, its impact on the environment and the way it treats its employees etc. Evaluate and improve the effectiveness of governance, risk management and control processes. This provides members of the boards and senior management with assurance that helps them fulfil their duties to the organisation and its stakeholders.

In sum, internal auditors help organisations to succeed through a combination of assurance and consulting. The assurance part of our work involves telling managers and governors how well the systems and processes designed to keep the organisation on track are working.

• Asset Audit

Verifying the Fixed Assets from records for description, classification, location, quantity, original cost, date of purchase, useful life, details of revaluation, rate of depreciation, accumulated depreciation, residual value and by physical verification and reconciliation between books quantity and physical quantity.

• Stock Audit

Verifying the Inventory held by business

Assessing company’s inventory book keeping System, systems of purchases. Procurements and receipts, storage and maintenance, aging of stock, risk cover, internal control on issues and consumption, physical verification of Inventory, work in progress and Finished Goods, reconciliation between book stock and physical stock, write off and system improvement recommendations.

• Tax Audit

Section 44AB gives the provisions relating to the class of taxpayers who are required to get their accounts audited from a chartered accountant. The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB is called tax audit. The chartered accountant conducting the tax audit is required to give his findings, observation, etc., in the form of audit report.

• Annual Audit Under Goods and Service Tax(GST)

Under Section 53 (4) of GST Law

Every registered taxable person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit to the proper officer a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 39 and such other documents in the form and manner as may be prescribed in this behalf.

• Audit of Trust under Income Tax Law

Sections 11 to 13 of the Income-tax Act, 1961 contain the provisions for taxation and regulation of charitable institutions. Section 12A(b) of the said Act requires that where the total income of any charitable institution as computed under this Act, without giving effect to the provisions of section 11 and 12, exceeds Rs.50,000/- in any previous year, then the institution is required to get the accounts audited by a Chartered Accountant and furnish the audit report along with return of income. The law relating to charity has become very complex since its evolution and many controversial/debatable issues have arisen.

• Transfer Pricing Certification

Indian Taxpayers with International or Indian business transaction with related parties are required to obtain and file an annual transfer pricing certification in Form 3CEB for transaction’s Arm’s Length Pricing.