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Step 8 D:- Auditing and Assurance

Auditing and Assurance

What is Audit?

The audit is a systematic examination of the books of accounts of a business. The audit is a critical review of the system of accounting and internal control. The audit is a verification of the results shown by the profit and loss account and the state of affairs as shown by the balance sheet.

What are the main Objectives of Auditing?

  • To report to the owners and other stakeholders whether the Financial Statements give a true and fair view of the company’s state of affairs
  • Providing a level of assurance that books of accounts are free from any material error or misreporting
  • Detection and Prevention of Frauds and Error.
  • Meeting compliance & reporting requirement as provided in various statutes.

Type of Audits

Statutory Audit:- The statutory audit is carried in accordance with the provisions of the Indian Companies Act, 2013. It is mandatory for Pvt / Public Ltd Co. It is carried out in accordance with applicable Indian Accounting and Auditing Standards and in accordance with the guidelines issued.

Tax Audit

Tax Audit is carried in accordance with the specified provisions of the Income-tax laws. Every person is required to get his accounts audited under Income Tax Act, (Tax Audit) if the Sales cross the below-mentioned limits:-

 In the case of business:- 1 Crore

In the case of Profession:- 25 lacs

The due date for filing Income Tax Return of an Assessee liable to get his accounts audited for a Tax audit is 30th September.

Internal Audit

Internal audit to help to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

VAT Audit

It is applicable under the MVAT Act, 2002. It’s applicable to a dealer who is liable to pay tax and his turnover, either of sales or purchases, exceeds Rs.60 lacs during the F.Y.

Forensic Audit: – It is conducted to check intentional frauds and white color scams. It is used to check the scam along with preparing case papers and evidence to confront accused in court.

Technical Audit:-There are various audits which can be carried down with a specific purpose, like structural audit, Efficiency Audit, Performance Audit, Environment Impact audit, etc.

Others Audits:-

Transfer Pricing Audit

Due Diligence

Does an Audit can be done only by a Chartered Accountant?

This is one of the biggest myth that audit means a CA; It is true up to a certain extent however it is not the complete fact. An audit is basically a systematic checking and cross-checking of various transactions and events. Generally, the audit is conducted by any experts in that particular field.

As CAs is Expert in Financial and accounting matter and there is a specific provision in Companies Act, Income Tax Act, and VAT to get the audit done by a Practicing CA.

However, in case of other audits which are not in nature of Compliance auditor which relate to other expert matters may be conducted by an experienced and duly qualified auditor.

For Example, for Structural audit generally, civil engineers are preferred.

Further, In the case of Forensic audit, internal audit and other technical audits any subject Expert can be appointed including CA and other experts.

Services provided by our AKT Expert team:-

Internal Audit

Branch Audit

Forensic Audit

Other Special Purpose Audit

              

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