Compliance Assurance & Financial Reporting
Helps Audit Professionals in ensuring compliance with accounting standards like AS -15 (R), Ind AS 19 | IAS 19 | US GAAP which mandate the use of Actuarial Valuation methods for provisioning for Long Term Employee Benefits.
Transparent and Accurate Provisioning helps build the trust of the Stakeholders
Risk Management
Since Gratuity is a Statutory obligation, providing it on a periodic basis helps the Financial Controller in aligning cashflows for expected pay-outs and avoiding surprise outlays
Employee Retention
Although securing gratuity compliance may look like a small step, but when employees are aware of the benefits (both short-term and long-term) provided by the organization, they develop a natural emotional connection towards the management and the brand. This helps boost productivity and a feeling of security among employees
Benefits outweigh costs in Financial Terms up to 10 times
An Average Actuarial Report cost for a 500-employee entity would be around INR 15,000. Assuming that an entity has a Gratuity liability of around 1.5 Crores and decides to Fund it basis actuarial valuation, the company can benefit from Tax Deductions and Prudent Asset Management Advisory provided by the Actuarial Firm which can easily save more than INR 1.5 lakhs.
Corporate Governance
Lucid obligation disclosures, fostering trust, and establishing commitment clarity bring an all-round looking WOW factor to the organization.
Mitigating Audit Qualifications
Regulatory compliance & reliable data, minimize the likelihood of audit qualification
The author can also be raeched at radhika@kapadiaglobal.com.
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