Hi,
i have one clint which is a partnership firm. The total turnover of that firm is 110 crore. So firm is required to do the tax audit.
Now my question is whether the firm is required to follow all accounting standards to prepare books of accounts?
If yes please quote the income tax act's section under which AS is required to follow
Section 145 states the applicability of AS----however, it says 2 follow only two AS
AS-1-----same as AS 1 issued by ICAI
AS-2---Same as AS-5 issued by ICAI.
It means if any firm or company follows just two AS then should we assume that the company/firm has no irregularity.
I have one book on tax audit, according to that book, the assessee should follow all AS ie 1-29.
i m confused whether the same is applicable for firm also.
CAclubindia
