CA Naveen Kumar (PROPRIETOR) 24 July 2019
Can a CA sign project report for bank finance after considering Culcutta High Court Judgement of Binod Kumar Agarwala, also there is no option for generating UDIN for signing project report. Please guide.
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Deepak Gupta (CA Student) 24 July 2019
“The audited balance sheet and profit and loss account no where state that these are on the basis of estimate.”
The CA shall be guilty if he permits his name or the name of his firm to be used in connection with an estimate of earnings which may lead to belief that he vouches for the accuracy of the forecast.
Clause (3) of Part I of the Second Schedule to the Chartered Accountants Act, 1949
However, this clause does not prevent a CA from participating in the preparation and review of financial forecasts/projections provided he indicates clearly in the report the source of information, the basis of forecasts and also the major assumptions made in arriving at the forecast.
Opinion of the Council at its 100th meeting held on 22nd-24th July 1982.
The Council has further opined that the same opinion would also apply to projections made on the basis of hypothetical assumptions about future events and management actions which are not necessarily expected to take place so long as the auditor does not vouch for the accuracy of the projection.
(Refer SAE 3400)
Illustrative Format of an Unmodified Report on a Forecast
Report on Examination of Prospective Financial Information
To the ……(addressee)……….
We have examined the forecast of _________(project)___________of the__________ (name of the entity) for the period from ___ to ___ as given in ____ to ____ of the prospective financial information in accordance with Standard on Assurance Engagements (SAE) 3400, The Examination of Prospective Financial Information, issued by the Institute of Chartered Accountants of India. The preparation and presentation of the forecast including the underlying assumptions, set out in Note _____ to the Prospective Financial Information, is the responsibility of the management and has been approved by the Board of Directors of the company. The sources of information are set out in Annexure____ to the prospective financial information. Our responsibility is to examine the evidence supporting the forecast. Our responsibility does not include verification of the forecasts. Therefore, we do not vouch for the accuracy of the same.
This forecast has been prepared for _________________ (intended use). The forecast has been prepared using a set of assumptions as set out in Note ____to the prospective financial information.
We have carried out our examination of the prospective financial information on a test basis.
Based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that assumptions do not provide a reasonable basis for the forecast. Further, in our opinion the forecast, read with the notes thereon, is properly prepared on the basis of the assumptions as set out in Note ______ and on a consistent basis with the historical financial statements, using appropriate accounting principles.
Actual results are likely to be different from the forecast since anticipated events might not occur as expected and the variation might be material.
For ABC & Co.,
(Name of the member signing the report)