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Showing posts from December, 2014

ICAI ON C&AG REPORT

ICAI ON C&AG REPORT                                         Attention has been drawn to certain issues raised on the certification work done by the members of the profession in the report of Comptroller and Auditor General of India (C&AG) entitled ‘Appreciation of Third Party (Chartered Accountant) Reporting in Assessment proceedings’ (Report No. 32 of 2014).The issues raised in said report were deliberated in the recent meeting of the Council held from 23rd to 25th December, 2014. The Council was of the view that:1.  Issues raised in the report be studied for initiating a structured and meaningful dialogue with the office of C&AG.2.  Necessary steps be initiated against the erring members wherever any act of professional misconduct is observed.3.  Refer details of all such members to the Disciplinary Directorate, who are said to have done Tax Audit, under section 44AB of the Income Tax Act, 1961, more than the limit prescribed by the Institute.4.  Develop an IT based syst…

5-minute test is suggested to filter out risky companies:

n5-minute test is suggested to filter out risky companies:Auditor’s Opinion: Read the Auditor’s Opinion in the 10-K to make sure that it is a “going concern” and that the financial statements “present fairly, in all material respects, … in conformity with accounting principles generally accepted…”.Lawsuits: Read footnotes for legal proceedings that can seriously harm the company. Stay away if you don’t understand the full impact of a lawsuit.Unusual losses: Check how often the company reported unusual losses (e.g. bad debt, inventory write-downs, severance payments to laid-off workers, etc.) in the last several years.Earnings restatements: Almost every major financial disaster was preceded by an earnings restatement. Make sure the company has not restated in the last several years.Intangibles assets ratio: [(Goodwill + other intangibles) / Total assets] should be < 20%. Intangibles can be impaired and quickly disappear from the balance sheet. In credit crunch times, intangibles are…

BANK AUDIT 2015

The following procedure will be followed for appointment statutory branch auditors (SBAs) in public sector banks (PSBs):(i) The list of eligible auditors/audit firms will be prepared by the Institute of Chartered Accountants of India (ICAI) as per the norms prescribed by RBI.( LIST prepared and ready to shoot to RBI)(ii) The above list will be subjected to scrutiny by RBI for identifying the continuing and rested firms and excluding audit firms against whom adverse remarks/disciplinary proceedings are pending or who have been denied audit.(iii) RBI will, thereafter, forward the final list of all eligible auditors/audit firms to PSBs for selection.(iv) The PSBs will select the required number of branch auditors/audit firms. Banks will be required to clearly advise the audit firms selected for consideration of appointment that each audit firm can take up audit assignment (branch audit) in one PSB only. The audit firm should give their consent in writing for consideration of appointment …

CAG pulls up chartered accountants for incorrect income tax information

CAG pulls up chartered accountants for incorrect income tax information Coming down heavily on chartered accountants hired by the income tax department, a CAG report on Friday said their failure to submit correct tax information resulted in levying of lower taxes by as much as Rs 2,813.11 crore in 367 cases surveyed."We found cases where the CAs failed to report full and correct information in 367 cases leading to short levy of taxes of Rs 2,813.11 crore and where the Assessment Officers failed to utilise the information available in 102 reports or certificates submitted to them leading to short levy of taxes of Rs 1,310.05 crore," said the report of the official auditor.
"We also found in another 616 cases where CAs committed mistakes viz in allowance of exemption or deductions, charging of tax on book profit under Section 115JB, adoption of arm's length price and reporting on cash payments exceeding Rs 20,000 per day," it said.The performance audit covered ass…

Revised Bank Branch Auditors' Panel for the year 2014-15

Please find placed below revised Bank Branch Auditors' Panel for the year 2014-15. To view the category, please click on the relevant interval:

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GST Bill: 10 Facts

Cabinet Clears Amendment to GST Bill: 10 FactsThe Cabinet on Wednesday cleared the Constitutional Amendment Bill on Goods and Services Tax or GST, paving the way for tabling of the new legislation in the current session of Parliament.Here's your 10-point cheat sheet on this big story:1) The revised Bill takes into account the deal reached between the Centre and states on contentious issues like including petroleum, alcohol and tobacco in GST. These items account for a major portion of states' tax revenues.2) At present, petroleum products will be not be included in the GST but will remain within the central act and will be brought in at a later stage through the GST councils. Alcohol will be exempt from GST and states would have the freedom to decide their own levy. Service tax will be subsumed within GST.3) In case of losses in the states' exchequer, the Centre will give 100 per cent compensation for the first three years, 75 per cent compensation for the fourth year and …

CBEC Circular on Service Tax Audit

CIRCULAR NO 181/7/2014-ST, Dated: December 10, 2014
Audit of the Service Tax assessees by the officers of Service Tax and Central Excise Commissionerates.

Section 94 of the Finance Act, 1994 deals with rule making powers of the Central Government in relation to service tax. Sub-section (2) of section 94, dealing with specific purposes for which rules can be made, was amended with effect from 06.08.2014, vide Section 114(J) of the Finance Act, 2014, and a new clause (k) was added to sub-section (2) of section 94, which is reproduced below –

"(k) imposition, on persons liable to pay service tax, for the proper levy and collection of tax, of duty of furnishing information, keeping records and the manner in which such records shall be verified."

2. In exercise of the rule making powers under clause (k) of sub-section (2) of section 94 of the Finance Act, 1994, the Central Government has inserted a new rule 5(A)(2) in the Service Tax Rules, 1994 vide notificatio…

Companies (Amendment) Bill, 2014 

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today approved the introduction of the Companies (Amendment) Bill, 2014 in Parliament to make certain amendments in the Companies Act, 2013. The Companies Act, 2013 (Act) was notified on 29.8.2013. Out of 470 sections in the Act, 283 sections and 22 sets of Rules corresponding to such sections have so far been brought into force. In order to address some issues raised by stakeholders such as Chartered Accountants and professionals, following amendments in the Act have been proposed: 1. Omitting requirement for minimum paid up share capital, and consequential changes. (For ease of doing business) 2. Making common seal optional, and consequential changes for authorization for execution of documents. (For ease of doing business) 3. Prescribing specific punishment for deposits accepted under the new Act. This was left out in the Act inadvertently. (To remove an omission) 4. Prohibiting public inspection of Board resoluti…