The Active Management Value Ratio: The New Science of Benchmarking Investment...
Presentation1 tax audit
1.
2.
3. As per SA 200 Audit is an independent
examination of financial information of any
entity whether profit oriented or not
irrespective of size or legal form which such
examination is conducted to express opinion
there on.
As per Companies Act 2013 only a Chartered
accountant or firm of Chartered account
holding a certificate of practice (COP )is
professionally qualified for the account of
companies
4. The Tax Audit is conducted under Sec.44AB,
44AD, 44AE.
The time limit for tax audit is 30th Sept. of
Assessment Year.
Tax Audit is conducted to check the true and
fair view of Financial Statements.
Audit is conduct of official and financial
inspection of a company or its accounts.
6. Pre- Audit
1. Engagement Letter
2. Knowledge
3. Verification of IC (Internal Control)
4. Audit Plan
7. During Audit
1. Arithmetical Accuracy
2. Documentary Evidences
3. Validity of transactions
4. Scrutiny of accounts
5. Accounting Ratios
6. Disclosure as per Sch. III
9. Section 44AB :
For Business
For Profession
Sales/ Gross Turnover
Exceeds Rs.1 Crore in p.y.
Gross Receipts Exceeds
Rs.25 Lakhs in p.y.
10. Section 44AD:
Includes Income of any business presumed to
be 8% & turnover does not exeed 1cr. In p.y.
Except business covered u/s 44AE/ Agency/
Commission/ Brokerage.
11. Section 44AE
A tax payer who owns not more than 10
Goods Carriage and is engaged in the
business of playing, hiring or leasing of
Goods Carriage, his income would be deemed
to be Rs.7500 per Goods Carriage per month.
12. Nature of Business
TDS as per 26 AS
269SS & 269T (Loan Repayment)
Cash payment above Rs.20,000
Relative Party Payment [40A(2)(b)]
Financial Ratio
Depreciation
Stock
13. Tax audit shall comprise of verification of all
records, documents, books of account
including electronic records.
It includes physical verification of stock in
trade , collection of sample of goods and
examination of such other records and
documents.
14. It includes the computation of input tax
credit ,admissible calculation of tax charged
and determined the actual tax liability
payable by dealer.
It includes the vouching of all the books of
accounts .
15. Role of tax auditor restricted to provide
information relating to facts of the matter
Tax auditor will not express an opinion on
the issues emanating from difference of
opinion between tax department and
taxpayer
Audit of withholding tax compliances
OUTSIDE the scope of tax audit except to the
extent transactions verified on test basis
16. Role of tax auditor shall stand completed with
the submission of final audit report. Tax auditor
would not be required to be present in person or
furnish any information during adjudication /
appeal or any other proceedings subsequent to
submission of final audit report
Tax Department shall issue an order either
accepting or altering the tax return. Tax Auditor
shall not be responsible for the content of the
order (except to the extent of audit report)
17. Tax audit to be performed on test basis
hence the tax auditor would not be expected
to uncover all cases of tax concealment or
evasion
18. ICAI has no role in selection and appointment
of tax auditors.
ICAI has no role in selection of taxpayers for
tax audit.
ICAI will provide assistance on technical
matters for implementation of Tax Audit
Framework.
ICAI will carry out investigation of any
misconduct by its member.
19. Transparency and fairness in selection of tax
payer and tax auditor.
Ownership by Stakeholder.
Integrity , Independence and Professionalism
in tax audit.
Continuity of Process – eg. Change in
leadership.
Improvement of TAF
Potential Litigation and Training.
