The concept of reporting with regard to the maintenance of cost records by directors and financial auditors separately was brought in specifically to ensure that there are no misreportings with regard to applicability. Recently many show cause notices were also issued to companies who had not prepared the cost records or had not filed the cost audit report though apparently as per the data gathered by MCA through various sources Cost Audit seemed to be applicable on those companies. Section
Tag: Statutory Audit
Statutory Audit Alert – March 2023
Implementation & Guidance on Audit Trail A. Management’s Responsibility Proviso to Rule 3(1) of the Companies (Accounts) Rules, 20141 (hereinafter referred as “the Account Rules”) states that for the financial year commencing on or after the 1st day of April 2023, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made
Statutory Audit – February 2023
Amendment in CSR rules Sec. 135(1) was amended pursuant to Companies Amendment Act, 2017 with effect from 19th September 2018. Post this amendment, the criteria of net worth of Rs. 500 crores OR turnover of Rs. 1000 crores OR net profit of Rs. 5 crores for applicability of CSR provisions was limited only to the extent of immediately preceding financial year. However, Rule 3(2) which, before this amendment, was the guiding provision as to the number of years for which
Statutory Audit – January 2023
RoDTEP Scheme RoDTEP stands for Remission of Duties and Taxes on Export Products. It is a new scheme that is applicable with effect from January 1st, 2021, formed to replace the existing MEIS (Merchandise Exports from India Scheme). The scheme will ensure that the exporters receive the refunds on the embedded taxes and duties previously non-recoverable. The scheme was brought about with the intention to boost exports which were relatively poor in volume previously. The following were some of the export
Statutory Audit – December 2022
Environmental, Social and Governance (ESG) As Sustainable development and Climate change movements are getting momentum along with the push from investors. It is imperative for companies to report their sustainability performance in order to maintain transparency with stakeholders. Global sustainable investments are growing rapidly and reached $35 trillion or 36% of the total assets under management in 2020. In India, almost all sustainable investment products have been launched in the last two years, reflecting increasing interest and potential. Evolution of
Ind AS 32: Accounting for offsetting of financial assets and financial liabilities
Facts A Company is engaged in the manufacturing of Defense Sector. Some of products manufactured by Company are on Special Order. The querist has stated that as the some products are made only against specific orders, the company receives advances from various customers on agreed percentages of sale value of an order for supply of goods and services. While raising the sale invoice on supply of ordered goods or services, advances to the extent of proportionate value of invoice
CARO 2020: MCA defers immediate applicability; now applicable from F.Y. 2021-22
The Ministry of Corporate Affairs (MCA) has deferred the applicability of the notified the Companies (Auditor’s Report) Order (CARO) 2020, till 1st April, 2021. The notification seeks to amend the Companies (Auditor’s Report) Order, 2020. In the Companies (Auditor’s Report) Order, 2020, in paragraph 2, for the figures, letters and word “1st April, 2020”, the figures, letters and word “1st April, 2021” shall be substituted. The Companies (Auditor’s Report) Order, 2020 is applicable for all statutory audits commencing on or
New Labour Code: Potential Accounting Implications
Government of India is actively working on reforms of various old laws out of which one is new Labour Code which was cleared by both the houses of parliament in July 2019 and received Presidents assent l on 8th August 2019 and called “The code of Wages 2019” However, many provisions of the Code of Wages 2019 are still not implemented and are yet to be made effective.` The major challenge in bringing about any labour reforms is to facilitate
Accounting treatment of waiver off of interest on the loan from Directors
Accounting treatment of waiver off of interest on the loan from Directors Entity A, which prepares its financial statements as per Ind AS obtained a loan from one of its directors during the year 2015-16 which is still outstanding as at the end of year 2018-19. The loan is not related to a qualifying asset and is repayable on demand. In previous years, the interest was charged and paid to the directors. However, in respect of interest on the loan
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