New audit reporting guidance

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CA DHRUV AGRAWAL
D 60, LAXMI NAGAR,
DELHI-92
9810425103

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New audit reporting guidance

  1. 1. REPORTING REQUIREMENTS OTHER THAN CARO,2003
  2. 2. DRAFTING OF AUDITORS’ REPORT
  3. 3. Reporting Requirements Reporting Requirements Statutory Requirements Standards On Auditing Statement of Modifications in Auditor’s Report
  4. 4. Statutory Requirements Statutory Requirements Companies Act IRDA Regulations Banking Regulations/RBI Act Others like SCRA, Electricity Act
  5. 5. Statutory Requirements - Companies Act Companies Act Section 227(1A) Section 227(4A) Section 227(2) Section 227(3) In case of negative finding Enquiry by Auditor Report by Auditor
  6. 6. Statutory Requirements- Companies Act Loans & Advances - Whether Secured - Terms & Conditions, not prejudicial Whether Transactions represented by book entries are not prejudicial In case of Company other than investment or banking Company - Securities sold below the purchase price Section 227(1A) Companies Act
  7. 7. Statutory Requirements- Companies Act Whether Loans & Advances - shown as deposits Whether personal expenses charged to revenue account Whether cash received in respect of allotment, if not, whether position in B/S not misleading Section 227(1A) Companies Act
  8. 8. True & Fair View State of Affairs Statutory Requirements - Companies Act Section 227 (2) Companies Act Profit or Loss
  9. 9. Statutory Requirement- Companies Act He has obtained necessary information & explanations B/S and P & L A/c in agreement with the books of Account etc. Proper books of account has been kept Disqualification of director u/s 274(1)(g) Report of the Branch Auditor received and how dealt with B/S and P & L A/c comply with accounting standards Cess payable u/s 441A has been paid, if not, amount not paid Adverse comment in thick type or italics Section 227(3)
  10. 10. Books of Account Section 209 of Companies Act <ul><li>Every company shall keep at its registered office proper books </li></ul><ul><li>If not at registered office, notice to RoC within 7 days in From 23AA </li></ul><ul><li>Accrual basis of accounting is mandatory </li></ul>
  11. 11. Compliance with Accounting Standards - Section 211(3C) <ul><li>Accounting Standards of accounting recommended by ICAI as may be prescribed by the Central Govt. in consultation with the National Advisory Committee on Accounting Standards </li></ul><ul><li>At present Accounting Standards issued by ICAI are the Standards referred to in section 211(3C) </li></ul><ul><li>Accrual basis of accounting is mandatory </li></ul>
  12. 12. Adverse Comments - In thick type or italics - Section 227(3)(e) <ul><li>Observations of Auditor which have any adverse effect on the functioning of the company needs to be given in bold or italics. </li></ul><ul><li>No definition of phrase ‘adverse effect on the functioning of the company’ in the Companies Act. </li></ul><ul><li>Any special comments on matter given in section 227(1A) may be given in bold or italics . </li></ul>
  13. 13. Disqualification of Directors - type or italics - Section 227(3)(f) <ul><li>Whether any director is disqualified from being appointed as a director under section 274(1)(g). </li></ul><ul><li>Disqualification to be considered ONLY at Balance Sheet date. </li></ul><ul><li>Not applicable where directors are directors in PVT. LTD. Companies ONLY </li></ul><ul><li>Auditor should obtain a written representation form the Company as well as Directors. </li></ul>
  14. 14. Cess Payable Section 441A of Companies Act <ul><li>Whether the Cess payable u/s 441A has been paid and if not, the details of amount of Cess not so paid has to be reported by the Auditor. </li></ul><ul><li>No Rules promulgated so far by the Central Govt. in relation to Cess </li></ul>
  15. 15. Statutory Requirements - Companies Act Section 227(4A) Companies Act Companies (Auditor’s Report) Order, 2003 AS AMENDED IN 2004
  16. 16. SA 700 – MEANING OF FINANCIAL STATEMENTS <ul><li>“ a complete set of general purpose financial statements, including the related notes i .e a summary of significant accounting policies and other explanatory information. </li></ul><ul><li>AFRF determine the form and content of the financial statements, and what constitutes a complete set of financial statements. </li></ul>
  17. 17. Standards ON AUDITING SA700 Forming an Opinion and Reporting on Financial   Statements WEF 1.04.2011 Report should state that Preparation/Fair Presentation of Financial Statements as per FRF/FPF are the responsibility of the entity’s management Report should describe the scope of the audit stating that audit was conducted in accordance with auditing standards
  18. 18. Standards on Auditings SA700 Forming an Opinion and Reporting on Financial   Statements WEF 1.04.2011 Report should include a statement that audit was planned and performed to obtain reasonable assurance whether financial statements are free of material misstatement Report should include a statement that the audit provides a reasonable basis for his opinion
  19. 19. <ul><li>For example in case of a company companies act requires </li></ul><ul><li>A Balance Sheet </li></ul><ul><li>A Profit and Loss account </li></ul><ul><li>A Cash Flow Statement (if required) </li></ul><ul><li>Notes to the accounts and significant accounting polices as referred in accounting standards under CASR (Company Accounting Standard Rules) 2006. </li></ul>
  20. 20. Standards ON Auditing SA - 700 The Auditor’s Report on Financial Statements Report should clearly indicate the financial reporting framework used to prepare the financial statements and state the opinion on true and fair view. Report should describe the limitation on the scope of Auditor’s work which leads to a Modified Opinion
  21. 21. Auditing & Assurance Standards SA 705 Limitation on Scope Limitation imposed by entity Limitation imposed by circumstances <ul><li>Where any “limitation on scope” requires expression of a Modified opinion or disclaimer of opinion, the auditor should: </li></ul><ul><li>describe the limitation, and </li></ul><ul><li>indicate the possible adjustments to financial statements that might have been determined to be necessary had the limitation not existed. </li></ul>
  22. 22. <ul><li>The auditor shall form an opinion on whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework. </li></ul>
  23. 23. <ul><li>For this , the auditor shall conclude as to whether the auditor has obtained reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error. </li></ul>
  24. 24. <ul><li>That conclusion shall take into account: </li></ul><ul><li>(a) The auditor’s conclusion, in accordance with SA 330, whether sufficient appropriate audit evidence has been obtained; (b) The auditor’s conclusion, in accordance with SA 450, whether uncorrected misstatements are material, individually or in aggregate; and </li></ul><ul><li>(c).In particular, the auditor shall evaluate whether, in view of the requirements of the applicable financial reporting </li></ul>
  25. 25. <ul><li>Concludes that , based on the audit evidence obtained, the financial statements as a whole are not free from material misstatement ; or is unable to obtain sufficient appropriate audit evidence to conclude that the financial statements as a whole are free from material misstatement , the auditor shall modify the opinion in the auditor’s report in accordance with SA 705. </li></ul>Situation -1
  26. 26. Situation -2 <ul><ul><ul><li>If financial statements prepared in accordance with the requirements of a fair presentation framework do not achieve fair presentation, the auditor shall discuss the matter with management and, depending on the requirements of the applicable financial reporting framework and how the matter is resolved, shall determine whether it is necessary to modify the opinion in the auditor’s report in accordance with SA 705. </li></ul></ul></ul>
  27. 27. Situation -3:- <ul><li>. </li></ul><ul><li>When the financial statements are prepared in accordance with a compliance framework , the auditor is not required to evaluate whether the financial statements achieve fair presentation. </li></ul>
  28. 28. Standards On Auditings Limitation on Scope Modified Opinion “ We did not observe the counting of the physical inventories as at 31st March, 2011 since that date was prior to the time we were appointed auditors of XYZ Ltd. Owing to the nature of the entity’s records, we were unable to satisfy ourselves as to inventory quantities by other audit procedures. In our opinion and to the best of our information and according to the explanations given to us, subject to the effects of such as to physical inventory quantities, the financial statements give a true and fair view……….” adjustments, if any, as might have been determined to be necessary had we been able to satisfy ourselves
  29. 29. Standards On Auditings Limitation on Scope Disclaimer of Opinion “………… We were not able to observe all physical inventories and confirm account receivable due to limitations placed on the scope of our work by the entity. Because of the significance of the matters discussed in the preceding paragraph, we do not express an opinion on the financial statements.”
  30. 30. Standards On Auditings SA 705 Disagreement with Management Inappropriate Accounting Method INCONSISTENT WITH FRF Inadequate Disclosures AS PER FRF Disagreement on Accounting Policies
  31. 31. <ul><li>Special Note :- . If the auditor addresses other reporting responsibilities in the auditor’s report on the financial statements </li></ul><ul><li>that are in addition to the auditor’s responsibility under the SAs to report on the financial statements 9Like in company 227(1A),(2) (3) (4)(4A CARO), these other reporting responsibilities shall be addressed in a separate section in the auditor’s report that shall be sub- titled “Report on Other Legal and Regulatory Requirements,” </li></ul>
  32. 32. “ As stated in Note X of schedule …. to the financial statements, hire purchase sales have been treated as outright sales by the entity and contrary to accepted accounting practice, the entire profit thereon has been taken into account. This has resulted in the profit for the year, inventories and reserve and surplus being overstated by Rs….. In our opinion and to the best of our information and according to the explanations given to us, subject to the effect on the financial statements of the mater referred to in the preceding paragraph, the financial statements give a true & fair view .” Disagreement on Accounting Policies - Inappropriate Accounting Method -MODIFIEDOpinion
  33. 33. Standards On Auditings “ On 20th December, 2010, ABC Ltd.issued debentures worth Rs. 50 crores for the purpose of financing plant expansion. The debentures agreement restricts the payment of future cash dividends to earnings after 31st March, 2007. In our opinion, disclosure of this information is required by…… In our opinion and to the best of our information and according to the explanations given to us, subject to the omission of the information included in the preceding paragraph, the financial statements give a true and fair view…..” Disagreement on Accounting Policies - Inadequate Disclosure – MODIFIED Opinion
  34. 34. Standards ON AUDITINGD - Other Important Requirements As per SA700, an auditor report should : - bear an appropriate title - be appropriately addressed (usually to the appointing authority) - bear the date on which the report expressing opinion is expressed - bear name specific location, where the report has been signed
  35. 35. - signed by auditor in personal name - in case of firm's appointment , sign to be in personal name of the auditor and in the name of the firm - mandatory to mention Membership No. & Also Firm Registration Number
  36. 36. Modification in Auditor’s Report <ul><li>In case opinion is other than unmodiified, following to be included in the report: </li></ul><ul><ul><li>Clear description of all the substantive reasons for such opinion </li></ul></ul><ul><ul><li>Quantification of all possible effects individually and in aggregate , on the financial statements, unless impracticable to do so </li></ul></ul><ul><ul><li>Note: Any modifications are to form part of the main body of the report </li></ul></ul>
  37. 37. Modification in Auditor’s Report Subject matter of Qualification NOT SO MATERIAL to affect the truth and fairness of whole of accounts SO MATERIAL that affects the overall truth and fairness It is appropriate for the Auditor to express true and fair view SUBJECT to the qualifications It would not be appropriate for the Auditor to express true and fair view SUBJECT to the qualifications
  38. 38. Qualification in Auditor’s Report MATERIALITY NOT SO MATERIAL to affect the truth and fairness of whole of accounts SO MATERIAL that affects the overall truth and fairness Issue Audit Report SUBJECT to qualifications Either Adverion OR Disclaimer of Opinionse Opin
  39. 39. Information is Material IF Its Misstatement (I.e. Omission or Erroneous Statement) Could influence the economic decisions of users, taken on the basis of the Financial Information AUDIT MATERIALITY
  40. 40. Don’ts in relation to Qualification in Auditor’s Report <ul><li>Qualifying Report by reference to a report made in an earlier year because all the shareholders may not have access to such reports. </li></ul><ul><li>“ The position of advance to M/s PQ Ltd. to Rs. 5 crores remain the same as explained in our last Report.” </li></ul>
  41. 41. Don’ts in relation to Qualification in Auditor’s Report <ul><li>Vague statements, the effect of which upon the </li></ul><ul><li>accounts is not ascertainable </li></ul><ul><li>“ The debit balances are subject to confirmation” </li></ul><ul><li>OR </li></ul><ul><li>“ We have accepted the certificate signed by the </li></ul><ul><li>Managing Director that stocks are realisable at the </li></ul><ul><li>Value stated in the balance sheet.” </li></ul>
  42. 42. Don’ts in relation to Qualification in Auditor’s Report <ul><li>Qualification in the Report which do not contain </li></ul><ul><li>any real objection on the part of the Auditor. </li></ul><ul><li>“ No provision for taxation has been made in view </li></ul><ul><li>of the net loss shown in the profit & loss account.” </li></ul><ul><li>OR </li></ul><ul><li>“ No depreciation has been provided as the factory </li></ul><ul><li>has not yet gone into production.” </li></ul><ul><li>The above statements are statements of facts only </li></ul><ul><li>and may be given in notes to accounts. </li></ul>
  43. 43. QUALIFICATIONS IN AUDITOR’S REPORT of CORPORATE INDIA
  44. 44. DABUR INDIA LIMITED 2004-2005 AUDITORS: G. BASU & CO. Notes to Accounts - Schedule P (Note B4) “ The Company’s investments in the joint venture, M/s Dabon International Pvt. Ltd. have not been accounted for in accordance with AS-27 as the same is being held for disposal in the foreseeable future. Consequently, no provision is deemed necessary for diminution in the value of investments under AS-13.” Auditor’s Report “… .subject to Note No. B(4) in Schedule P , Balance Sheet and Profit & Loss Account have been prepared in due compliances of Accounting Standards referred to in sub section (3C) of Section 211 of Companies Act, 1956.”
  45. 45. SALORA INTERNATIONAL LTD 2004-2005 AUDITORS: K. PRASAD & COMPANY Notes to Accounts - Schedule U (Note No. 7) “ The process for ascertainment of impairment of assets pursuant to AS-28 which is applicable first time w.e.f. 1.4.2004 is underway. This being the first year and process requires a lot of exercise and technical evaluation to arrive at conclusion as to which asset that may be impaired. No effect has been given for impairment loss, in the accounts which will not be material according to view of technical experts and management also.” Auditor’s Report “… .In our opinion the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with accounting Standards as referred to in sub section (3C) of Section 211 of Companies Act, 1956 except of AS-28 of Impairment of Assets as given in Note No. 7 in Schedule U of Notes to Account.”
  46. 46. ASSAM COTTON MILLS LTD 2004-2005 AUDITORS: SINGHI & CO. Notes to Accounts - Schedule 14 [Note No. IIA (viii)] “ The Company has not provided interest of Rs. 510000/- (till date Rs. 1050000/-) on loan taken from its holding company, Kesoram Industries Ltd. for the year ended 31st March, 2005.”
  47. 47. ASSAM COTTON MILLS LTD 2004-2005 AUDITORS: SINGHI & CO. Auditor’s Report “… .Attention is invited to Note No. IIA(viii) of Schedule 14 of Note on Accounts regarding non provision of interest amounting to Rs. 1050000/- upto 31st March, 2005 (for the year Rs. 510000/-) on loan taken from Kesoram Industries Ltd., had the provision been made in the accounts, loss for the year would have been Rs. 2771967/- (as against Rs. 1721967/- shown in the accounts) debit balance in the Profit & Loss Account would have been Rs. 11767705/- (as against Rs. 10717705/- shown in the accounts) and interest accrued and due would have been Rs. 1055688/- (as against Rs. 5688/- shown in the accounts) .” We report that in our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to para ------above, give the information……………………………………….
  48. 48. JADOONET LTD. 2004-2005 AUDITORS: S.S. KOTHARI & COMPANY Notes to Accounts - Schedule P (Note No. 4) “ Valuation in respect of accessories has been made based solely on management estimates, since, no active market exists for such inventory.” Auditor’s Report “ In view of the absence of active market of inventory, the valuation of the inventories has solely been made on the management estimates and hence we are unable to verify its responsibility (refer to Note 4 of Schedule P).”
  49. 49. <ul><li>Reporting Considerations </li></ul><ul><li>When the Principal Auditor Concludes: </li></ul><ul><ul><li>that work of another can’t be used, and </li></ul></ul><ul><ul><li>Principal auditor couldn’t perform sufficient additional procedures of the work audited by another auditor, </li></ul></ul><ul><li>a qualified or disclaimer of opinion should be given. </li></ul>USING WORK Of ANOTHER AUDITOR
  50. 50. <ul><li>Reporting Considerations & Inclusions: </li></ul><ul><li>Strict compliance with “Code of Ethics” issued by the ICAI </li></ul><ul><li>Status of Accountant – whether independent? </li></ul><ul><li>Title: Accountants’ Report on compilation of </li></ul><ul><li> Unaudited Financial statements” </li></ul><ul><li> (and not Auditors’ Report) </li></ul><ul><li>Addressee – Appointing Authority </li></ul><ul><li>Identification of financial information indicating it is provided by </li></ul><ul><li>the management </li></ul>STANDARD ON AUDITING – 4410 ENGAGEMENTS TO COMPILE FINANCIAL INFORMATION
  51. 51. <ul><li>6. Management responsibility as to: </li></ul><ul><ul><li>- completeness & accuracy of data </li></ul></ul><ul><ul><li>- maintaining adequate books of accounts & internal control </li></ul></ul><ul><ul><li>- compliance to applicable laws in preparation & presentation of financial information </li></ul></ul><ul><ul><li>- establishing controls to safeguard the assets </li></ul></ul><ul><li>Compliance with Auditing & Assurance Standards in engagement </li></ul><ul><li>Material non- compliances with Accounting Standards to which management disagrees (during normal course of engagement) </li></ul>ENGAGEMENTS TO COMPILE FINANCIAL INFORMATION
  52. 52. <ul><li>9. Statement that neither an audit nor review has been made </li></ul><ul><li>Material departure from identified reporting framework, if any </li></ul><ul><li>Date of Report / Place of Signature / Accountant’s Signature </li></ul><ul><li>Client to be asked to sign statement of accounts on face of it </li></ul><ul><li>Report so compiled to NOT to be prepared on letterhead – else liable for misinterpretation as assurance </li></ul><ul><li>Fees NOT to be defined as Auditors’ Fee </li></ul>ENGAGEMENTS TO COMPILE FINANCIAL INFORMATION
  53. 53. <ul><li>Reporting Considerations & Inclusions: </li></ul><ul><li>Procedures performed were those agreed- upon with the recipient </li></ul><ul><li>Identification of the purpose for which such procedures were performed </li></ul><ul><li>3. A listing of specific procedures performed </li></ul><ul><li>4. That had the auditor performed additional procedures, audit or review, matters which came to light would have been reported </li></ul>STANDARD ON AUDITING –4400 ENGAGEMENTS TO PERFORM AGREED UPON PROCEDURES REGARDING FINANCIAL INFORMATION
  54. 54. <ul><li>Reporting Considerations & Inclusions: </li></ul><ul><li>Note: On same lines as AAS – 32 including following Statements : </li></ul><ul><li>Report is restricted to parties who agreed upon the procedures </li></ul><ul><li>6. Where applicable, that the report relates to only elements, accounts, items and information agreed upon and not the entire financial statements </li></ul>ENGAGEMENTS TO PERFORM AGREED UPON PROCEDURES REGARDING FINANCIAL INFORMATION
  55. 55. <ul><li>Reporting Considerations & Inclusions: </li></ul><ul><li>1. Opening / Introductory Paragraph including: </li></ul><ul><ul><li>- Identification of Financial Statements </li></ul></ul><ul><ul><li>- Management & Auditor responsibility Statement </li></ul></ul><ul><li>2. Scope Paragraph – Statement w.r.t.: </li></ul><ul><ul><li>- Reference to AAS – 33 and relevant laws & regulations </li></ul></ul><ul><ul><li>- Review being limited to inquiries & analytical procedures </li></ul></ul><ul><ul><li>- Procedures provide less assurance than audit </li></ul></ul>ENGAGEMENTS TO REVIEW FINANCIAL STATEMENTS
  56. 56. <ul><li>Reporting Considerations & Inclusions: </li></ul><ul><li>Negative Assurance I.e., the auditor’s review did not lead to the believing that financial statements do not give true and fair view </li></ul><ul><li>Matters that impair true and fair view, and if possible quantifications thereof </li></ul><ul><li>Material Scope on limitations, if any </li></ul><ul><li>Date of report not to be earlier than date on which financial statements signed or approved by management </li></ul>ENGAGEMENTS TO REVIEW FINANCIAL STATEMENTS
  57. 57. STANDARD ON ASSURANCE ENGAGEMENT 3400 EXAMINATION OF PROSPECTIVE FINANCIAL INFORMATION <ul><li>Auditors Report to include: </li></ul><ul><li>Reference to the intended purpose/use and/or restricted distribution of prospective financial information. </li></ul><ul><li>Statement that examination included examination of evidence supporting assumptions, amounts & other disclosures. </li></ul><ul><li>Negative assurance that whether assumptions provide reasonable basis for prospective financial information. </li></ul><ul><li>Opinion as to whether prospective financial information is properly prepared on basis of assumptions and presented in accordance with relevant financial reporting framework. </li></ul>
  58. 58. <ul><li>Appropriate caveats concerning achievability of prospective results. </li></ul><ul><li>Statement that actual results are likely to be different from prospective financial information and variation could be material. </li></ul><ul><li>In case of Projection, a statement that prospective financial information has been prepared using set of assumptions that include hypothetical assumptions about future events and management actions that not necessarily occur. </li></ul>EXAMINATION OF PROSPECTIVE FINANCIAL INFORMATION
  59. 59. Guidance Note on Auditor’s Report on Revised Accounts of Companies before Circulation to Shareholders <ul><li>Whether : </li></ul><ul><li>All copies of the original accounts are returned </li></ul><ul><li>to the auditor? </li></ul><ul><li>2. Adequate disclosure of the fact of revision on the </li></ul><ul><li>accounts already approved by the Board & </li></ul><ul><li>reported by the Auditor appears as a specific </li></ul><ul><li>note or not? </li></ul>YES NO No further disclosure is required in the Report Refer the fact of revision in the Report
  60. 60. Guidance Note on Audit Reports and Certificates for Special Purposes <ul><li>Reporting Considerations: </li></ul><ul><li>Specific elements, accounts or items considered. </li></ul><ul><li>Manner of conducting the audit </li></ul><ul><li>Limitations on scope, if any, to be mentioned </li></ul><ul><li>Assumptions made, to be stated </li></ul><ul><li>Reference to specific information or explanations relied upon </li></ul><ul><li>Title, whether certificate or report, to be clearly indicated </li></ul><ul><li>Choice of appropriate words whether an opinion or confirmation has been made </li></ul>
  61. 61. Guidance Note on Audit Reports and Certificates for Special Purposes <ul><li>Reference to general purpose financial statements, if relied upon </li></ul><ul><li>In case of interpretation of statute, auditor to mention that an opinion has been expressed. </li></ul><ul><li>Report / Certificate to be a self contained document </li></ul><ul><li>Extent of responsibility assumed </li></ul><ul><li>In case of audited financial statements, auditor to indicate </li></ul><ul><ul><li>- Figures from audited general purpose statement has been used </li></ul></ul><ul><ul><li>- Reconciliation of figures between general purpose financial statement and his report/certificate. </li></ul></ul>
  62. 62. Guidance Note on Profit Forecasts and / or Financial Forecasts Accountants’ Report - Inclusions Sources of Information Basis of Forecasts Assumptions Made NOTE: Accountant not to give any impression as if vouching for accuracy of forecasts
  63. 63. Guidance Note on Profit Forecasts and / or Financial Forecasts Addressed to Board, unless circumstances Require otherwise Specify Limitation of Scope, if any Accountants’ Report - Requisitions Specify Nature, Scope, and Objectives as agreed Qualification in report on: 1. Disagreement With Management 2. Material Reservation Forewarning Signals, if any, For profit forecasts
  64. 64. Guidance Note on Reports in Company Prospectuses S.No Issue / Query Answer 1. Eligibility to make Report Statutory Auditor / Joint Auditors considering Sec. 226(3) 2. Signing of the Report As per SA – 3. Addressee of the Report Board of directors
  65. 65. Guidance Note on Reports in Company Prospectuses <ul><li>Auditor’s Report - Inclusions </li></ul><ul><li>Figures of profit & loss for the preceding 5 years or actual whichever is higher </li></ul><ul><li>Statement of assets and liabilities as on last date of latest financial year </li></ul><ul><li>The rates of dividends, if any, paid in respect of each class of shares for each of 5 preceding years. </li></ul><ul><li>Disclosure in form of note for adjustments to assets, liabilities, profit & loss dealt with by the report OR Making of adjustments & indication thereof </li></ul><ul><li>Fact if any part of accounts for five years before three months from date of issue being incomplete. </li></ul><ul><li>In such a case, accounts upto a date not earlier than six months from date of issue to be included </li></ul>
  66. 66. DRAFTING OF NOTES TO ACCOUNTS
  67. 67. DRAFTING OF NOTES TO ACCOUNTS <ul><li>Issues: </li></ul><ul><li>Notes to Accounts – What to include? </li></ul><ul><li>Accounting Policies – Accounting Standards (AS) 1 </li></ul><ul><li>Disclosure under various Accounting Standards </li></ul><ul><li>Changes in Accounting Policies, financial impact </li></ul><ul><li>Unusual Items / transactions </li></ul><ul><li>Prior period items </li></ul><ul><li>Standards ON Auditing –570 Going Concern </li></ul>
  68. 68. CA DHRUV AGRAWAL , FCA, CS, LLB 9810425103 Thank You

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