Amendments in Tax Audit Report Purpose of Rule 6G: This rule tells about the name of the forms applicable in the case of 44AB Audit and from 1st April 2021 sub-rule (3) is inserted. Rule 6G (1) The report of audit of the accounts of a person required to be furnished under section 44AB shall,- (a) In the case of a person who carries on business or profession and who is required by or under any other law to get his accounts audited, be in Form No. 3CA; (b) In the case of a person wh..
A. Diversion of Short Term (Cash Credit Limits) Loans Whenever an Auditor finds any new investments of either long term or short term of unrelated assets on the face of company Balance Sheet during audit, there is a need to verify and confirm the source for the investment. In case new investment is not supported by long term source then there is a need to verify whether any short-term funds of bank Cash Credit limits or any other short-term funds are diverted and used for long term purpose..
Auditing and Assurance Standards Board The Institute of Chartered Accountants of India 31st March, 2021 AUDITING AND ASSURANCE STANDARDS BOARD CONSTITUTES ONLINE PANEL OF EXPERTS FOR ADDRESSING BANK BRANCH AUDIT RELATED QUERIES FOR THE FINANCIAL YEAR 2020-21 Dear Members, The bank audit season is around the corner. Given the fact that the banking industry is typical in terms of its geographical and customer spread, the volume and varied nature of products and services offered, coupl..
The importance of cyber security cannot be ignored in banks as banks functions in an environment where the delivery of most of the services are technology dependent. It is imperative that the bank assess the impact of technology failure and cyber security risk it possesses. Cyber security risks and controls are within the scope of auditor's concern only to the extent that it could impact the financial statement. For this purpose, the auditor needs to have an understanding of impact of ..
Auditor's reporting on internal controls is not a new requirement in India. The Companies Act, 2013 introduced section 143(3)(i) which required the auditors of companies, other than specified class of companies, to report whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls. In the case of Banks, the guiding principles on objectives, strategy, scope and coverage of Long Form Audit Repo..
Introduction Accounting or book-keeping is undoubtedly one of the critical functions of any business. The history of accounting systems dates back to more than 7000 years, when accounting records were merely stone carvings or writings on a wall. We had come a long way from then, where the accounting records were maintained in hard-bound ledger books using the double-entry accounting system. But, the 21st century digital revolution has transformed the accounting process completely with the adv..
MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 24th March, 2021 G.S.R. 206(E). - In exercise of the powers conferred by sections 139, 143, 147 and 148 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Audit and Auditors) Rules, 2014, namely: 1. Short title and commencement.- (1) These rules may be called the Companies (Audit and Auditors) Amendmen..
Internal Audit Standards Board The Institute of Chartered Accountants of India 17th March 2021 ANNOUNCEMENT Expression of Interest in Projects of the Internal Audit Standards Board, ICAI The Internal Audit Standards Board (IASB or the Board) is one of the Non-Standing Committee of the Institute of Chartered Accountant of India (ICAI) and was constituted on February 5, 2004 as Committee on Internal Audit. The main objective of the Board is to issue Standards on Internal Audit, strengt..
Introduction The Companies Act, 2013 (the '2013 Act') has imposed specific responsibilities of Company's internal financial controls on the Board of Directors ('Board'), Audit Committee as well as auditors. It requires the stakeholders to specifically state that internal financial controls are adequate and are operating effectively. Consequent to the formal responsibility introduced under the 2013 Act, the role of the Audit Committee in the oversight of internal cont..
The general purpose financial statements of an entity are prepared using the going concern basis of accounting unless the management intends to liquidate or to cease the operations or there is no realistic alternative to do so. It is the fundamental accounting assumption followed by the enterprise and no specific disclosure is required to be made. Responsibility for Assessment of the Entity's Ability to continue as Going Concern The preparation of financial statements requires manag..
Background The role of auditor has evolved over a period of time. I had a good opportunity to look at some of the audit reports going back even more than 100 years. Those were the days where the auditor used to mention that they have verified the accounts and it shows true and correct view. Just couple of sentences, at best a paragraph. Now, we have a very detailed audit report with specific paragraphs and guidelines on reporting under each paragraph, besides we also have reporting under Sec...
What is an audit risk? Audit risk is a risk that an auditor will not detect errors or fraud while examining the information collected and a material misstatement may go undetected. This means that it is possible that despite all the checks and detailed review, certain misstatement sweeps through the leakage. Following are the types of audits risks Control risk It is possible that the material error goes undetected by the existing controls. Eg: - An unidentified person..