Fraud is a significant threat to organization, especially a complex global organization operating with multiple businesses and geographies. The situation gets more complicated now as opportunities and justification are enhanced during COVID-19. An ACFE report says, organizations typically lose 5 percent of revenues to fraud annually. COSO framework may be used to develop a comprehensive mechanism to mitigate frauds effectively and proactively. Frauds in the organization would have an adverse impact on operations, profitability, employee morale and reputation. Internal audit
Category: Assurance
Amendments to Indian Accounting Standards (Ind AS) issued in July 2020
Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2020 dated 24 July 2020. The rules are effective from the date of publication in the Official Gazette of India i.e. 24 July 2020. All amendments are effective for periods beginning 1 April 2020 or later. However, amendments relating to Ind AS 116, Leases, can be applied for financial year beginning 1 April 2019 or later if the financial statements for that period have not yet
The Three Lines Model: July 2020 – An Oversight
The Three Lines Model has replaced previously known Three Lines of Defense model in July 2020. This updated Model helps organizations identify structures and processes that help in achievement of objectives and facilitate better governance and risk management. The model applies to all organizations and is optimized by:– Adopting a more flexible principles-based approach suiting objectives and environment of the organization.– Concurrent focus on contribution risk management as well as to matters of “defense” and protecting value.– Explaining the roles
Benefits of Internal Audit
Introduction: Many people believe that Internal Audit is only required in larger, more complex entities and that the cost/benefit of an Internal Audit function would just not be there for them. However this can be a very short sighted conclusion, especially when you consider the high volume of transactions and the regulatory compliance issues. I believe that the Management of these entities should take a closer look at three important factors with respect to risk management and internal controls before
Application of paragraph 21 of AS 22
Fact of Case: A company is a public limited company listed with recognised stock exchanges, engaged in manufacturing business. The company follows calendar year. In Union Budget for the financial year 2015-16 presented on 28th February 2015, the Government has revised the surcharge on income tax from 5% to 10%, resulting in increase of effective ‘Corporate Tax’ rate from 33.99% to 34.61%. Whether Rates announced by finance bill is enacted or substantively enacted Para 21 of AS 22:- “deferred tax
Managing COVID-19 Impact – Governance, Environment & Social (GES) Way
No denial that the impacts of COVID-19 are far more severe and long lasting than initially estimated. Some of the effects and risks are related to Governance, Environmental and Social (GES) aspects and hence to be managed accordingly for GES and similar issues affecting the investment portfolios and traditional financial factors. COVID-19 started during March 2020 in India as a health crisis and soon took into its grip the economic and social governance aspects. As the process of unlock is
Depreciation Impact on Plant and machinery during Lockdown
CSR (Corporate Social Responsibility) utilisation advisory As per section 135 of the Companies Act, 2013 certain companies are required to spent money in CSR Activities, company can spent money either In case where a company transfer the CSR fund to third party i.e. trust, Society, section 8 companies for public welfare, all such companies should obtain an independent practitioner’s report on utilisation of such CSR funds from the auditor/ CA in practice of third party. The auditor/ CA in practice
Impact of COVID-19 on Revenue Recognition
COVID-19 pandemic is affecting worldwide major economic and financial markets, and virtually all industries and governments are facing challenges associated with the economic conditions resulting from efforts to address it. For example, many industries i. e. travel, hospitality, leisure, Education, and retail industries have seen sharp declines in revenues due to regulatory and organizational mandates and voluntary changes in humanbehavior. To address these economic challenges, some governments are pursuing laws or other related initiatives. This article discusses certain key revenue
Impactful Internal Audit – Post Lockdown
Role and position of Internal Audit function in an organization is going to witness major changes post Covid 19 as its working environment and expectations are likely to change significantly. This article is intended to highlight the ways internal audit can upgrade itself to effectively add value across the organization and maximize its influence on the company in a sustained manner. There is an attempt to outline key change drivers which the organizations must focus to prepare themselves for tomorrow.