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Tax audit and companies audit

ravi (senior accountant) (507 Points)

16 December 2011

If tax audit is done by one auditor ; can company audit for that year can be done by another auditor? or should both audits has to be done by same auditor (ie.one auditor) pls remove this confusion and pls suggest?

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7 Replies

(Guest)

only one CA of a single Firm of CA's can audit an Company in an asseament year.

(Guest)

Company audit can be done by another auditor or the same tax auditor.

CA Kiran Sutrave (CA) (428 Points)
Replied 16 December 2011

There is no such requirement. Both the audits can be done by single person.

If the Company wishes to have different person or Audit firm to do different audit then that can be done.

sagar (Chartered Accountant) (131 Points)
Replied 17 December 2011

There Can Be 2 Different Auditors....As Both Audits Are Carried as Per Different Acts (i.e. Co'Act, IT Act )

Arijit Bhattacharjee (ACA, M.COM) (407 Points)
Replied 18 December 2011

Raviji,

Firstly there can be two aspects:

a)Bookish interpretation( with a slight paractical aspect too)

b)Veracity and Feasibility

As far as (a) is concerned yes, the both Acts have no straight forward consus between them.

But let me clarify, the intension of the Statues as far as Audit is concerned.

Companies Act '56 is the elder peer to Taxation Act'61, so the draft committe was literally in a much wider disposition to state their "ifs and buts".

Further audit i a "compulsion" under Co. Act. Nothing precludes one from getting the Cos Accounts annually audited. However, as you are well aware that "Audit" is phenomenon of progressive income
"Assessment" which in the view of the exchequer is legitimate.

Thus, a when a Co cant escape Co Audit and whether is held in the clutches of Tax Audit, it shall resort to the recourse of sticking to the "Same Auditor".

In fact the "In. Tax Act" well comprehended this problem and prrovided clearly that "where an assess has already got his accounts audited under any other statue" he has only he supposed to attach only Form 3CA or 3 CB.

@ (b) No logic of getting audit done from two different persons since "Double Cost Burden"/Twice Audit Fees.

ABIPRAY/TATPARYA= Audit from two Auditors is not only feasible but also not Technically possible.

Because if Tax auditor is different, he expresses his opinion on account already Audited, and nothing "Exonarates one Auditor" by relying prima facie on the "Work of another auditor" with whome even he is not averse too.

Regards ...cheers..

srinu (student) (24 Points)
Replied 19 December 2011

tax audit and company audit are two different audits, to be done by different statutes. there is no statutory requirement to perform these audits by single auditor or different auditors.generally as a cost benifit analysis both audits are done by single auditor

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Ashish Trivedil (CA Final) (37 Points)
Replied 20 December 2011

Company Audit & Tax Audit Both done by the singal Auditor no restriction regards this,but however if these two audit done on same date then both is done on the basis of mercantile system and this date is 31st march for relevenr Previous Year.