Audit I - Chapter 2, Pt. I, The Auditing Profession (1).pptxKalkaye
The document discusses the auditing profession and the need for its regulation. It covers several topics:
- The regulatory framework for auditing including international and national standard setters like the PCAOB which was established in response to accounting scandals.
- The rights and responsibilities of auditors including their appointment, access to company records, duties to report to shareholders.
- Reasons for regulation including restoring public trust after events like Enron, and the need for harmonized standards, quality control, and ethics.
Secretarial Audit has been mandated by Section 204 of the Indian Companies Act, 2013 for every listed company and other class of companies.
This presentation talks about, introduction, historical background, Objective and Purpose, Scope, Benefits and Beneficiaries of Secretarial Audit. This presentation also talks about offences and penalties as prescribed in Section 204 and 143 of the Companies Act, 2013 for any default committed.
‘Secretarial Audit’ is introduced by recently enacted Companies Act, 2013. It is a process to check compliances made by the Company under Corporate Law & other laws, rules, regulations, procedures etc.
This document discusses various types of legal audits that companies may need to undergo. It describes compliance certificate audits required under Section 383A of the Companies Act for companies with capital between 10 lacs to 5 crores. It outlines corporate governance audits per Clause 49 that are mandatory for listed companies. Diligence reports required for banks with consortium or syndicate lending arrangements are also covered. The document also discusses the need for labour law audits and FEMA (foreign exchange management act) audits. While legal audits require costs, the benefits of risk reduction and mitigation of issues typically outweigh the expenses. Legal audits are presented as a form of preventative law that can limit liability and improve compliance.
This document discusses key changes to the Companies Act introduced in 2013 relating to auditors, directors, and financial reporting. Some key points include:
- Auditor tenure is increased to 6 years from 5 years and mandatory rotation of auditors is introduced for listed companies every 10 years.
- Restrictions are placed on non-audit services provided by auditors to clients.
- A minimum of one woman director is required for certain prescribed classes of companies.
- The maximum number of directorships an individual can hold is increased to 20 companies from 15.
- Consolidated financial statements are now mandatory for companies with subsidiaries/associates. Significant influence is redefined.
- Restate
Corporate governance and the role of professionals under the Companies Act, 2...D Murali ☆
Corporate governance and the role of professionals under the Companies Act, 2013- Dr S. Chandrasekaran - Article published in Business Advisor, dated July 25, 2016 - http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
Audit I - Chapter 2, Pt. I, The Auditing Profession (1).pptxKalkaye
The document discusses the auditing profession and the need for its regulation. It covers several topics:
- The regulatory framework for auditing including international and national standard setters like the PCAOB which was established in response to accounting scandals.
- The rights and responsibilities of auditors including their appointment, access to company records, duties to report to shareholders.
- Reasons for regulation including restoring public trust after events like Enron, and the need for harmonized standards, quality control, and ethics.
Secretarial Audit has been mandated by Section 204 of the Indian Companies Act, 2013 for every listed company and other class of companies.
This presentation talks about, introduction, historical background, Objective and Purpose, Scope, Benefits and Beneficiaries of Secretarial Audit. This presentation also talks about offences and penalties as prescribed in Section 204 and 143 of the Companies Act, 2013 for any default committed.
‘Secretarial Audit’ is introduced by recently enacted Companies Act, 2013. It is a process to check compliances made by the Company under Corporate Law & other laws, rules, regulations, procedures etc.
This document discusses various types of legal audits that companies may need to undergo. It describes compliance certificate audits required under Section 383A of the Companies Act for companies with capital between 10 lacs to 5 crores. It outlines corporate governance audits per Clause 49 that are mandatory for listed companies. Diligence reports required for banks with consortium or syndicate lending arrangements are also covered. The document also discusses the need for labour law audits and FEMA (foreign exchange management act) audits. While legal audits require costs, the benefits of risk reduction and mitigation of issues typically outweigh the expenses. Legal audits are presented as a form of preventative law that can limit liability and improve compliance.
This document discusses key changes to the Companies Act introduced in 2013 relating to auditors, directors, and financial reporting. Some key points include:
- Auditor tenure is increased to 6 years from 5 years and mandatory rotation of auditors is introduced for listed companies every 10 years.
- Restrictions are placed on non-audit services provided by auditors to clients.
- A minimum of one woman director is required for certain prescribed classes of companies.
- The maximum number of directorships an individual can hold is increased to 20 companies from 15.
- Consolidated financial statements are now mandatory for companies with subsidiaries/associates. Significant influence is redefined.
- Restate
Corporate governance and the role of professionals under the Companies Act, 2...D Murali ☆
Corporate governance and the role of professionals under the Companies Act, 2013- Dr S. Chandrasekaran - Article published in Business Advisor, dated July 25, 2016 - http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
Concept of Auditing B.Com(Hons)/B.Com .pdfUmakantAnnand
Concept of Auditing
The term audit is derived from a Latin word “audire” which means to hear authenticity of accounts is assured with the help of the independent review. Audit is performed to ascertain the validity and reliability of information. Examination of books and accounts with supporting vouchers and documents to detect and prevent error, fraud is the primary function of auditing. Auditor has to check the effectiveness of internal control systems for determining the extent of checking out the audit.Initially its meaning and use were confined merely to cash audit, and the auditor has to ascertain whether the persons are responsible for the maintenance of accounts had adequately accounted for all the cash receipts and the payment on behalf of this principle.
But the word audit has an extensive usage, and it now means a thorough scrutiny of the books of accounts and its ultimate aim is to verify the financial position disclosed by the balance sheet and profit and loss accounts of a company. In short, an audit implies an investigation and a report. The process of checking and vouching continues until the study is completed and the auditor enables himself to report under the terms of his appointment
Definition of Auditing
“An audit is an examination of accounting records undertaken with a view of establishing whether they correctly and completely reflect the transactions to which the purport to relate.” –Lawrence R. Dickey
“Audit is defined as an investigation of some statements of figures involving examination of certain evidence, so as to enable an auditor to make a report on the statement.” –Taylor and Perry
Classification of Auditors
Auditors of financial statements & non-financial information (including compliance audit) can be classified into three categories:
1) External auditor/Statutory auditor is an independent firm engaged by the client subject to the audit to express an opinion on whether the company's financial statements are free of material misstatements, whether due to fraud or error. For publicly traded companies, external auditors may also be required to express an opinion on the effectiveness of internal controls over financial reporting. External auditors may also be engaged to perform other agreed-upon procedures, related or unrelated to financial statements. Most importantly, external auditors, though engaged and paid by the company being audited, should be regarded as independent and remain third party.
2) Cost auditor/Statutory cost auditor is an independent firm engaged by the client subject to the cost audit to express an opinion on whether the company's cost statements and cost sheet are free of material misstatements, whether due to fraud or error. For publicly traded companies, external auditors may also be required to express an opinion on the effectiveness of internal controls over cost reporting.
- Due diligence is a detailed investigation of a company's financial, legal and operational activities conducted prior to a major transaction like an IPO.
- The purpose is to identify any issues, assess risks and opportunities, ensure compliance with laws, and check the accuracy of financial statements and value of assets.
- Key areas of focus include the company's financials, assets, employees, marketing, industry, competition, legal matters, contracts and intellectual property.
- The due diligence helps identify gaps between the current company and what needs to be publicly listed, to then fill those gaps prior to the IPO.
The document provides an overview of the audit process for insurance companies in India. It discusses key aspects that must be audited including premiums, claims, commissions, operating expenses, investments, cash and bank balances, outstanding premiums, and agents' balances. It also outlines the legislation and guidelines that apply, the composition and role of the audit committee, eligibility requirements for appointing statutory auditors, and the internal control system. The objectives of the audit are to ensure compliance with relevant laws and regulations and adherence to sound accounting practices.
The document provides an overview of key changes introduced in the Companies Act 2013 compared to the Companies Act 1956. Some of the major changes include the introduction of one person companies, increased limit of members in a private company, mandatory rotation of auditors, constitution of audit committee for listed companies, increased role and responsibilities of independent directors, requirements around corporate social responsibility for large companies, and establishment of the National Company Law Tribunal to replace High Courts for certain functions.
The document provides information on secretarial audits required for certain companies under Section 204 of the Companies Act, 2013. It explains that secretarial audits verify a company's compliance with legal and procedural requirements under various laws such as the Companies Act, Securities Contracts Regulation Act, and Foreign Exchange Management Act. Companies meeting certain criteria must provide a secretarial audit report certified by a Company Secretary in Practice. The document outlines the process, documents required, applicable laws, benefits, and penalties for non-compliance.
The document provides an overview of key changes introduced in the Companies Act 2013 as compared to the previous Companies Act 1956. Some of the major changes highlighted include:
1. The Act has been reorganized into 29 chapters compared to 13 parts under the previous act. The number of sections has been reduced from 658 to 470.
2. New concepts such as one person companies, registered valuers, and national company law tribunal have been introduced.
3. Requirements around incorporation such as minimum and maximum number of members for private companies, and commencement of business have been modified.
4. Key managerial personnel has been defined to include whole-time director, CEO, company secretary and C
This document discusses the regulation of the auditing profession. It explains that auditing became more regulated due to public scandals that eroded trust. International and national standard setters now aim to harmonize standards and ensure audit quality and ethics. Auditors must follow regulatory guidance from bodies like IFAC, national laws, auditing standards, and ethics codes. The roles of organizations like the PCAOB and AICPA in regulating audits and auditors in the US are also summarized.
As we all know, the Companies Act, 2013 has brought about significant changes to the corporate governance landscape in India. One of the key areas where these changes are being felt is in internal audit and control. It is no longer enough for companies to simply tick the boxes when it comes to internal audit and control. They must go beyond that and ensure that their internal audit and control processes are effective and compliant with the Companies Act, 2013.
The Companies Act, 2013 (CA, 2013) has introduced a number of new requirements for companies in relation to income audit and control. These requirements are designed to improve the accuracy and reliability of financial reporting, and to reduce the risk of fraud and error.
One of the key changes introduced by the CA, 2013 is the requirement for companies to have an internal audit function. The internal audit function is responsible for providing independent assurance to the board of directors on the effectiveness of the company's internal controls over financial reporting.
Section 204 of the Companies Act 2013 mandates secretarial audits for listed companies, public companies with a paid up capital of over Rs. 50 crore or turnover over Rs. 250 crore. A secretarial audit verifies compliance with company law and other applicable laws, conducted by an independent company secretary. Non-compliance can result in fines from Rs. 1-5 lakh. Secretarial audits ensure management compliance and prevent penal liability. Fraud reporting and penalties for false statements are also outlined. Benefits include due diligence, risk avoidance, and regulatory assurance of compliance.
This document provides an overview of auditing, including:
- Defining an audit as a systematic process of obtaining and evaluating evidence to determine if financial assertions align with criteria and communicating results.
- Stating the objectives of an auditor are to obtain reasonable assurance the financial report is free of material misstatement and express an opinion if it complies with standards.
- Explaining the demand for audits comes from agency theory, the need for information, an insurance function, and regulation requiring annual audits.
- Describing how assurance relates to auditing and the auditing environment involves standards, legislation, case law, and professional bodies.
The Companies Act, 2013 is a historic legislation for India that is aimed at improving corporate governance, simplifying regulations, and enhancing the interstes of minority investors. The new law replaces the nearly 60-year-old Companies Act, 1956.
ACC 4020-01_Auditing Research Project_FionaNguyenPhuong Nguyen
Auditors being paid by the companies they audit can compromise their independence and impartiality. This paper discusses alternatives where auditors are hired and paid by an external third party like the Securities and Exchange Commission or an oversight board. Large companies pay substantial audit fees, with fees from single clients sometimes representing over 10% of an auditor's total billings, creating a threat to independence. Laws like Sarbanes-Oxley have tried to address issues around auditor impartiality, but problems remain regarding auditors' economic and psychological incentives to please clients paying their fees.
The document discusses mergers and acquisitions under Indian company law. It defines different types of mergers such as horizontal, vertical, conglomerate and congeneric mergers. It outlines the merger provisions and procedures in the Companies Act 2013, including applying to the NCLT for approval, shareholder and creditor approval requirements, and the fast track merger process. The document also discusses cross-border mergers, competition law considerations for M&A transactions, the merger control review process, and prohibitions against abuse of dominant market position.
Cost audit and cost accounting standards help verify cost accounts and ensure adherence to cost accounting plans. A cost audit examines cost accounts and whether the cost accounting plan was properly executed. The Companies Act requires cost audits for certain companies. Cost accounting standards provide uniformity in classification, determination, and recording of costs. Maintaining proper cost records and adhering to cost accounting standards assists management with decision making, cost control, and performance evaluation.
The document is a knowledge level exam paper from the Institute of Chartered Accountants of Bangladesh. It contains questions on assurance, internal control, internal and external audit. The paper covers key concepts in these areas like the two types of assurance engagements, objectives of internal control, components of internal control like control environment and risk assessment process, roles of internal and external audit functions and key differences between them. It provides suggested answers to questions testing understanding of these fundamental assurance, internal control and audit concepts.
Concept of Auditing B.Com(Hons)/B.Com .pdfUmakantAnnand
Concept of Auditing
The term audit is derived from a Latin word “audire” which means to hear authenticity of accounts is assured with the help of the independent review. Audit is performed to ascertain the validity and reliability of information. Examination of books and accounts with supporting vouchers and documents to detect and prevent error, fraud is the primary function of auditing. Auditor has to check the effectiveness of internal control systems for determining the extent of checking out the audit.Initially its meaning and use were confined merely to cash audit, and the auditor has to ascertain whether the persons are responsible for the maintenance of accounts had adequately accounted for all the cash receipts and the payment on behalf of this principle.
But the word audit has an extensive usage, and it now means a thorough scrutiny of the books of accounts and its ultimate aim is to verify the financial position disclosed by the balance sheet and profit and loss accounts of a company. In short, an audit implies an investigation and a report. The process of checking and vouching continues until the study is completed and the auditor enables himself to report under the terms of his appointment
Definition of Auditing
“An audit is an examination of accounting records undertaken with a view of establishing whether they correctly and completely reflect the transactions to which the purport to relate.” –Lawrence R. Dickey
“Audit is defined as an investigation of some statements of figures involving examination of certain evidence, so as to enable an auditor to make a report on the statement.” –Taylor and Perry
Classification of Auditors
Auditors of financial statements & non-financial information (including compliance audit) can be classified into three categories:
1) External auditor/Statutory auditor is an independent firm engaged by the client subject to the audit to express an opinion on whether the company's financial statements are free of material misstatements, whether due to fraud or error. For publicly traded companies, external auditors may also be required to express an opinion on the effectiveness of internal controls over financial reporting. External auditors may also be engaged to perform other agreed-upon procedures, related or unrelated to financial statements. Most importantly, external auditors, though engaged and paid by the company being audited, should be regarded as independent and remain third party.
2) Cost auditor/Statutory cost auditor is an independent firm engaged by the client subject to the cost audit to express an opinion on whether the company's cost statements and cost sheet are free of material misstatements, whether due to fraud or error. For publicly traded companies, external auditors may also be required to express an opinion on the effectiveness of internal controls over cost reporting.
- Due diligence is a detailed investigation of a company's financial, legal and operational activities conducted prior to a major transaction like an IPO.
- The purpose is to identify any issues, assess risks and opportunities, ensure compliance with laws, and check the accuracy of financial statements and value of assets.
- Key areas of focus include the company's financials, assets, employees, marketing, industry, competition, legal matters, contracts and intellectual property.
- The due diligence helps identify gaps between the current company and what needs to be publicly listed, to then fill those gaps prior to the IPO.
The document provides an overview of the audit process for insurance companies in India. It discusses key aspects that must be audited including premiums, claims, commissions, operating expenses, investments, cash and bank balances, outstanding premiums, and agents' balances. It also outlines the legislation and guidelines that apply, the composition and role of the audit committee, eligibility requirements for appointing statutory auditors, and the internal control system. The objectives of the audit are to ensure compliance with relevant laws and regulations and adherence to sound accounting practices.
The document provides an overview of key changes introduced in the Companies Act 2013 compared to the Companies Act 1956. Some of the major changes include the introduction of one person companies, increased limit of members in a private company, mandatory rotation of auditors, constitution of audit committee for listed companies, increased role and responsibilities of independent directors, requirements around corporate social responsibility for large companies, and establishment of the National Company Law Tribunal to replace High Courts for certain functions.
The document provides information on secretarial audits required for certain companies under Section 204 of the Companies Act, 2013. It explains that secretarial audits verify a company's compliance with legal and procedural requirements under various laws such as the Companies Act, Securities Contracts Regulation Act, and Foreign Exchange Management Act. Companies meeting certain criteria must provide a secretarial audit report certified by a Company Secretary in Practice. The document outlines the process, documents required, applicable laws, benefits, and penalties for non-compliance.
The document provides an overview of key changes introduced in the Companies Act 2013 as compared to the previous Companies Act 1956. Some of the major changes highlighted include:
1. The Act has been reorganized into 29 chapters compared to 13 parts under the previous act. The number of sections has been reduced from 658 to 470.
2. New concepts such as one person companies, registered valuers, and national company law tribunal have been introduced.
3. Requirements around incorporation such as minimum and maximum number of members for private companies, and commencement of business have been modified.
4. Key managerial personnel has been defined to include whole-time director, CEO, company secretary and C
This document discusses the regulation of the auditing profession. It explains that auditing became more regulated due to public scandals that eroded trust. International and national standard setters now aim to harmonize standards and ensure audit quality and ethics. Auditors must follow regulatory guidance from bodies like IFAC, national laws, auditing standards, and ethics codes. The roles of organizations like the PCAOB and AICPA in regulating audits and auditors in the US are also summarized.
As we all know, the Companies Act, 2013 has brought about significant changes to the corporate governance landscape in India. One of the key areas where these changes are being felt is in internal audit and control. It is no longer enough for companies to simply tick the boxes when it comes to internal audit and control. They must go beyond that and ensure that their internal audit and control processes are effective and compliant with the Companies Act, 2013.
The Companies Act, 2013 (CA, 2013) has introduced a number of new requirements for companies in relation to income audit and control. These requirements are designed to improve the accuracy and reliability of financial reporting, and to reduce the risk of fraud and error.
One of the key changes introduced by the CA, 2013 is the requirement for companies to have an internal audit function. The internal audit function is responsible for providing independent assurance to the board of directors on the effectiveness of the company's internal controls over financial reporting.
Section 204 of the Companies Act 2013 mandates secretarial audits for listed companies, public companies with a paid up capital of over Rs. 50 crore or turnover over Rs. 250 crore. A secretarial audit verifies compliance with company law and other applicable laws, conducted by an independent company secretary. Non-compliance can result in fines from Rs. 1-5 lakh. Secretarial audits ensure management compliance and prevent penal liability. Fraud reporting and penalties for false statements are also outlined. Benefits include due diligence, risk avoidance, and regulatory assurance of compliance.
This document provides an overview of auditing, including:
- Defining an audit as a systematic process of obtaining and evaluating evidence to determine if financial assertions align with criteria and communicating results.
- Stating the objectives of an auditor are to obtain reasonable assurance the financial report is free of material misstatement and express an opinion if it complies with standards.
- Explaining the demand for audits comes from agency theory, the need for information, an insurance function, and regulation requiring annual audits.
- Describing how assurance relates to auditing and the auditing environment involves standards, legislation, case law, and professional bodies.
The Companies Act, 2013 is a historic legislation for India that is aimed at improving corporate governance, simplifying regulations, and enhancing the interstes of minority investors. The new law replaces the nearly 60-year-old Companies Act, 1956.
ACC 4020-01_Auditing Research Project_FionaNguyenPhuong Nguyen
Auditors being paid by the companies they audit can compromise their independence and impartiality. This paper discusses alternatives where auditors are hired and paid by an external third party like the Securities and Exchange Commission or an oversight board. Large companies pay substantial audit fees, with fees from single clients sometimes representing over 10% of an auditor's total billings, creating a threat to independence. Laws like Sarbanes-Oxley have tried to address issues around auditor impartiality, but problems remain regarding auditors' economic and psychological incentives to please clients paying their fees.
The document discusses mergers and acquisitions under Indian company law. It defines different types of mergers such as horizontal, vertical, conglomerate and congeneric mergers. It outlines the merger provisions and procedures in the Companies Act 2013, including applying to the NCLT for approval, shareholder and creditor approval requirements, and the fast track merger process. The document also discusses cross-border mergers, competition law considerations for M&A transactions, the merger control review process, and prohibitions against abuse of dominant market position.
Cost audit and cost accounting standards help verify cost accounts and ensure adherence to cost accounting plans. A cost audit examines cost accounts and whether the cost accounting plan was properly executed. The Companies Act requires cost audits for certain companies. Cost accounting standards provide uniformity in classification, determination, and recording of costs. Maintaining proper cost records and adhering to cost accounting standards assists management with decision making, cost control, and performance evaluation.
The document is a knowledge level exam paper from the Institute of Chartered Accountants of Bangladesh. It contains questions on assurance, internal control, internal and external audit. The paper covers key concepts in these areas like the two types of assurance engagements, objectives of internal control, components of internal control like control environment and risk assessment process, roles of internal and external audit functions and key differences between them. It provides suggested answers to questions testing understanding of these fundamental assurance, internal control and audit concepts.
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2. Coverage
Highlights of Companies Act, 2013
SWOT Analysis on cost accountants
Analysis in general
Planning for future prospective
1 2
Coverage
3. Companies Act, 2013
Features of the Act:
Increases:
Transparency
Corporate Responsibility and Accountability
Shareholder and Stakeholder Protection
Its scope and coverage to cover missing links in the
old Act
Step towards Globalization
Ensures Investor Democracy
Addresses the needs of the Shareholders/ Stakeholders
and public at large
1 3
5. One Person Company - Introduced
Key Managerial Personnel – Defined and Identified
Associate Company – Definition Introduced
Class Action - Introduced
Small Company - Defined
Foreign Company - Redefined
1 5
Highlights of the Act
11. Pre-certification of Forms
XBRL
Appointment as Key Managerial Personnel
Advising as Expert
Appear before National Company Law Tribunal
Become Member of National Company Law Tribunal
Internal Audit
Valuers
Appointment as Interim / Company Administrator
Appointment as Provisional / Company Liquidator
Companies Act, 2013
1 11
18. Section 2(28) – Definition
Cost Accountant as defined in Section 2(1)(b) of the Cost and
Works Accountants Act, 1959
Section 2(1)(b) of Cost and Works Accountants Act, 1959
defines
"Cost Accountant" means a person who is a Member of the
Institute of Cost Accountants of India”
Companies Act, 2013
1
19. Section 2(38) – Definition
“Expert” includes
An Engineer
A Valuer
A Chartered Accountant
A Company Secretary
A Cost Accountant
Any other person who has the power or authority to
issue a Certificate in pursuance of any law for the time being in
force;
Companies Act, 2013
1 19
20. Section 138(1) – Appointment as Internal Auditor
Specified class of Companies required to appoint an Internal
Auditor
The Internal Auditor shall be a Chartered Accountant or Cost
Accountant or such other Professional as may be decided
by the Board
Companies Act, 2013
1 20
21. Section 148 – Cost Audit on Central Government
specification
Central Government powers to notify
Statutory Auditor cannot be a Cost Auditor
Cost Auditing Standards to be complied with, in conducting Cost
Audit
Furnishing information to Central Government within 30 days
Companies Act, 2013
1 21
22. Penalties
On Default / Contravention by Company
Company shall be punishable with fine not less than
Rs.25,000/- but which may extend to Rs.5,00,000/-
Every officer in default shall be punishable with
Imprisonment for a term which may extend to 1 year
or
Fine not less than Rs.10,000/- but which may extend to
Rs.1,00,000/-
or
both
Companies Act, 2013
1
23. Section 275(1) – Appointment as Company
Liquidator
Cost Accountant can be appointed as Liquidator
Panel containing names of Professionals maintained by
Central Government
Companies Act, 2013
1 23
24. Emerging Profession and gaining importance in Service
industry
Specialized in analyzing Cost element of the Products
Facilitating fixation of prices of goods and services
Channelizing the enterprise resources to most optimum,
productive and profitable areas
Promoting Corporate Governance through various operational
disclosures to the Directors
Providing audited cost data as regards contracts containing
escalation clauses
Companies Act, 2013
1 24
25. www.b5consulting.com 25
Lack of knowing strength
Lack of aggressive approach
Mingling with top mgt restricted
Less branding
Lack of utilization of skills
WEAKNESS
29. 29
Companies Act, 2013
Social Audit
Corporate
Developmen
t Audit
Manageme
nt Audit
Internal
Audit
SOX Audit
Audit
Cost Audit
30. If an auditor while performing the audit, comes to know of
an offence involving fraud is being / has been
committed
against the Company by officers / employees of the
Company
He shall immediately report the matter to the Central
Government.
No contravention by him if reported in good faith.
If an auditor, does not comply with above he shall be
punishable with fine not less than Rs.1,00,000/- but which
may extend to Rs.25,00,000/-
1 30
Duties of Cost Auditor
33. www.b5consulting.com 33
Threats to Cost Accountants
Scope of Cost audit is less
Concept of Cost Compliance Report removed
Lack of support from industry
Penalties and imprisonment for Cost accountants
35. On Default of Section 148 / Contravention by Cost Auditor
Auditor shall be punishable with fine not less than Rs.25,000/- but which may extend to
Rs.5,00,000/-
If contravened willfully / knowingly with an intention to deceive
The Company
Shareholders
Creditors
Tax authorities
he shall be punishable with fine not less than Rs.1,00,000/- but which may extend to
Rs.25,00,000/-
He shall also refund the remuneration received by him
&
Pay for damages to the Company, Statutory bodies or authorities or to any other person
for loss arising out of incorrect or misleading statements made in Audit report.
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36. Relaxed eligibility norms for cost audit of companies
facilitating other professionals decided by the Board for
conduct of Audit.
Threat of entry by other professionals.
Increase in threshold limits for companies required to carry
out cost audit.
In turn reducing the total number of Companies required to
carry out Cost Audit.
Threshold limits
Net worth increased from Rs. 5 crore to Rs. 500 crore
Turnover increased from Rs.20 crore to Rs.100 crore.
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Challenges under Cost Audit draft
rules
37. A LLP can be formed by Cost Accountants with other
professionals and experts
Creation of trust for CSR activities
Creation of society for research activities
Creation/ Structuring of OPC
Register as Independent Director
Take care of annual report with sustainability report
Appointment of woman director on Board
Opportunities
37
38.
39. Various Segments…
Opportunities in General
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Telecommunication Industry
Petroleum Industry
Electricity Industry
Sugar Industry
Fertilizer Industry
Pharmaceutical Industry
Cement Industry
Paper Industry
Steel Industry
40. Role of Cost Accountant in Telecommunication
Industry…..
A Statutory Auditor can analyze only the overall financial
position of the Organization
Whereas
A Cost Auditor can only analyze the Profit Centers in the
Organization.
For eg: A Cost Auditor analyzes whether the Profit is through
SMS Services or through other Value added Services, thereby
facilitating decision making by the Management
Companies Act, 2013
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41.
42.
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Planning for future Prospectives
Role of Cost Management Accountant
As Cost and Management Auditor
As an Internal Auditor
As a KMP
As an Expert Advisor
As a Valuer
As a Company Administrator
As a Liquidator
259 (1) The interim administrator or the company administrator, as the case may be, shall be appointed by the Tribunal from a databank maintained by the Central Government or any institute or agency authorized by the Central Government in a manner as may be prescribed consisting of the names of Company Secretaries, Chartered Accountants, Cost Accountants and such other professionals as may, by notification, be specified by the Central Government.
Sec. 275(2) The provisional liquidator or the Company Liquidator, as the case may be, shall be appointed from a panel maintained by the Central Government consisting of the names of Chartered Accountants, Advocates, Company Secretaries, Cost Accountants or firms or bodies corporate having such Chartered Accountants, Advocates, Company Secretaries, Cost Accountants and such other professionals as may be notified by the Central Government or from a firm or a body corporate of persons having a combination of such professionals as
may be prescribed and having at least ten years’ experience in Company matters.
Social audit is a process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground. Social accounting (also known as social accounting and auditing, social and environmental accounting, corporate social reporting, corporate social responsibility reporting, non-financial reporting or accounting) is the process of communicating the social and environmental effects of organizations' economic actions to particular interest groups within society and to society at large
