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Can a CA doing tax audits conduct internal audits?

purvi (some) (240 Points)

10 June 2010

HELLO FRIENDS!!! I WOULD LIKE TO KNOW SOMETHING INTERESTING

RECENTLY I WAS SURFING WEB AND I CAME ACCROSS THIS NAME -

"THE INSTITUTE OF CERTIFIED INTERNAL AUDITORS!"

HEY EXPERTS OUT THERE - PLEASE SHARE YOUR KNOWLEDGE AND TELL ME...

1) WHO IS A CIA?

2) IS A CHARTERED ACCOUNTANT, A CIA BY DEFAULT? IF NO CAN HE GIVE THIS CERTIFICATION EXAM?

3) IF ANS TO ABOVE IS NO, THEN PLS TELL ME - ARE THE BIG FOUR FIRMS ONLY INTERNAL AUDITORS OR THEY ALSO CONDUCT EXTERNAL AUDITS?

4) DO THE BIG 4 FIRMS CONDUCT TAX AUDITS AND STATUTORY AUDITS? IF NO WHAT IS THE REASON PLS TELL ME????

THANKING YOU AND REGARDS IN ADVANCE... PLS PLS PLS HELP ME TO LEARN ABOUT THESE AND SHARE YOUR KNOWLEDGE... IT WILL BE HIGHLY APPRECIATED...

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3 Replies

Ankit CA and CS (Manager - Accounts) (204 Points)
Replied 11 June 2010

A firm can be tax auditors and statutory auditors for the same client but can b internal auditor and statutory auditor nor internal and tax auditor

1 Like

Neha Popat (CA in Practice- Direct Taxation) (94 Points)
Replied 11 June 2010

A CA cannot be the Internal Auditor and the Tax Auditor of the same Company/Firm. This is as per the Council's Decision dated 12/12/2008 in the link :

https://www.icai.org/post.html?post_id=3787&c_id=219

Internal Auditor cannot be appointed as a Tax Auditor - (12-12-2008)

The Council in its 281st meeting held from 3rd October, 2008 to 5th October 2008 at New Delhi considered an issue arising from the Guidance Note on Tax audit under section 44AB of the Income-tax Act,1961 as to "Whether the internal auditor of an assessee, being an individual chartered accountant or a firm of chartered accountants can be appointed as his tax auditor".

The Council decided that an internal auditor of an assessee, whether working with the organisation or independently practising chartered accountant or a firm of chartered accountants, cannot be appointed as his tax auditor

1 Like

CA SURENDRA KUMAR RAKHECHA (Practising CA at Surat) (26258 Points)
Replied 04 July 2010

1. The concept of internal audit has come from US where it exists from more than 30 years. No such recognized Internal Auditor qualification is there In India.

2. A CA can conduct Internal Audit also by default.

3. Not Applicable.

4. In majority of cases all practising CA firms conduct Tax Audit and Statutory Audits simultaneously.