DURING MY COURSE OF INTERNAL AUDIT I FOUND THAT A COMPANY HAS NOT RECOCILED ITS SERVICE TAX LEDGER.I.E. THE MONTHLY BREAKUP OF SERVICE TAX COLLECTION AND LIABILTY TO PAY SERVICE TAX THEREON AFTER CENVAT CREDIT ISNOT RECONCILED WITH THE SERVICE TAX RETURN.. ON DETAILED ENQUIREY I FOUND THAT THEY DIDNT MAKE PROPER ENTRIES FOR SERVICE TAX DUE. THEY MADE SERVICE TAX DUE ON THE DATE OF PAYMENT TO THE CENTRAL GOVT. A/C INSTEAD OF ON THE DATE OF RECEIPT FROM CLIENTS..BUT THEY HAVE PAID SERVICE TAX TOGETHER WITH INTREST THEREON IF ANY REGULARLY.. THE REASON AS THEY STATED FOR IT WAS THAT THE BILLING WAS CENTRALISED FROM CANADA WHICH IS ACTUALLY ITS HOLDING COMPANY AND THE RECEIPTS WERE FROM LOCAL BANKS FROM WHICH THEY TFD. IT
IS THAT A MATTER OF NON COMPLIANCE WITH ANY OF THE ACCOUNTING STANDARDS/ SERVICE TAX RULES.WHAT SOULD WE DO AS INTERNAL AUDITORS???
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