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An Audit is a thorough examination of financial statements with the goal of determining whether they reflect an accurate and fair image of the firm or entity. The main goal is to give management a comprehensive view of the company's finances and to assist them in taking key initiatives to boost development potential. You need assistance while Implementation & Reporting as per Indian GAAP and Accounting Standard for various statutory audits of companies, Company Tax Audit, internal audit services, stock audit of banks, and other Voluntary Audits for firms in a variety of industries. Here are few points to be considerable while looking for Audit and assurance services -
- TAudit of a company accounts, personal income tax accounts, as one of the major requirements in India for those who are coming under the purview of eligibility. A chartered accountant (CA) will audit the accounts of said books.
- If an LLP's capital is above Rs 25 lacs or its turnover above Rs 40 lacs, an audit of its books of accounts is required.
- If a company's turnover or borrowing exceeds a specific threshold, an internal audit process is required.
What are Audit Services? Tax Audit Services in India.
In Today's world, a Tax audit service online is seen as more than a formality. It is a must for a company's protection and growth. Early warnings, realistic solutions, and open communication are all important qualities. Audits are a set of checks, controls, and assurances that can be performed legally or voluntarily by an organization to ensure that the financial image of the business is accurate. There are various kinds of audit services and their implications, you must have some basic details about services such as tax audit, filing due date, applicability of tax audits, process to do tax audit, etc. By offering a risk-focused service that integrates rigorous risk assessment with diagnostic methods, the certified internal auditor must take the time to understand the client's operations. The testing methodologies for audits must be suited to the audit in question. We keep strong ties with our customers at LegalPillers. We take a quality-driven approach with our members and provide all of our clients with an informed, constructive, and challenging audit.
Types of Audit in India: Internal audit, Company Tax Audit, Individual tax audit and Statutory audit, etc.
There are various types of audit listed below:
Internal auditing is a type of independent consulting service that aims to increase the value of a company's operations while also adding value to the company's bottom line. It also offers a methodical and disciplined approach to monitoring and assessing the entity's risk management, internal controls, and corporate governance. So hire a certified internal auditor for your business. The internal audit process goes like this: the audit committee or board of directors with equal authority determines the entire scope of the internal audit. In the absence of an audit committee and a board of directors, the internal audit committee reports to the entity's shareholders. There are a set of provisions which determine the applicability of internal audit on a company.
Listed Company: Mandatory for all
Public Unlisted Company: if Turnover is Rs. Two Hundred crore or more, Borrowings is equal to Rs.Hundred crore or more, paid up share Capital is Rs.50 crore or more, Deposits Rs. 25 crore or more.
Private Unlisted Company: f Turnover is Rs. Two Hundred crore or more and/or Borrowings is Rs.Hundred crore or more.
Limits are subject to change by the government from time to time.
A statutory audit is required for all companies which is registered with MCA. However LLP to extent certain turnover and capital contribution criteria, exempted from appointing auditor in LLP.
Individual/HUF/Partnership Firm: Not required.
LLP: Applicable if turnover in any FY exceeds Rs. 40 Lakhs or its contribution exceeds Rs. 25 Lakhs.
Pvt. Ltd./PLC: Mandatory irrespective of Turnover, Profit, etc.
Limits are subject to change by the government from time to time.
In general, a stock audit is a crucial auditing phrase that relates to the physical verification of inventory. However, it may also include inventory value at times, depending on the terms of reference or engagement letter for the task. When moving on, keep in mind and evaluate the purpose for why the audit is being undertaken, as different audits may take different approaches, which would ultimately depend on the goal. To achieve optimum balance in the process, the stock audit procedure is required to reduce unnecessary investment in stocks or inventory. As a result of high stock levels, overstocking can occur, resulting in negative cash flow value and financial losses. The stock audit of banks has a different audit policy and stock audit process is different. External auditors selected by the bank must review assets charged to the bank once or twice a year, depending on the bank's preference. This check is performed to give an auditor to determine the status of existing stock.
A company tax audit in India is a process that verifies that the taxpayers' books of accounts and other records of their company or profession have been kept up to date and appropriately represent the individual's taxable income. You will get tax audit for a proprietorship firm, LLP, private limited company or partnership. It also checks if the individual has met certain income tax criteria, such as filing tax forms and taking deductions, among other things. The tax audit report is provided along with the tax return. Section 44AB of the Income Tax Act of 1961 covers the provisions for tax audits in India.
Total Sales, Turnover or Gross Receipt exceeds Rs. 1 Crores. Person Carrying Profession: Gross Receipts Exceed Rs. 25 Lakhs. Note- These are some basic limits which are subject to conditions prescribed under law.
Under section 44AB of the Income Tax Act, 1961, an individual engaged in any trade or business is needed to keep books of account for personal income tax paying, have them audited, and obtain and furnish a Tax Audit Report. If the sale, gross receipts, or turnover, for example, exceeds the permitted limit, a Chartered Accountant must be consulted. Because a business person or professional person typically lacks knowledge, skill, and organizational strength, he/she may rely largely on an individual tax audit service provider for formality compliance and representation, among other things. As a result, the C.A. 's professional, do tax audit for proprietorship firms and involved in assignments for huge corporations and tax auditors who may rely on the system and internal checks and controls.
Benefits of Audit of a Company | Individual Tax Audit
The following are the main benefits of a tax audit service:
Company Tax Audit services ensure that the books of accounts are kept properly and that a tax auditor certifies them.
It assists in the preparation of reports about recommended information such as tax depreciation, income tax legislation and compliance, and so on.
It ensures method-bound examination of the books of accounts and reports in light of findings or discrepancies made by a tax auditor.
It aids in the verification of the accuracy of income tax returns filed with the IT department.
Services of Company tax audit in India simplifies the work of calculating and verifying total income, deduction claims, and other tasks.
Forms of a Tax Audit Report
A practicing chartered accountant must conduct the audit (CA). The tax audit report must be submitted in the following format:
- Form 3CA: When a company is already legally obliged to have its accounts audited. This applies to businesses that are required to have their accounts audited under the Companies Act of 2013.
- Form 3CB: When a company or person's accounts are audited underneath the Income Tax Act's Section 44AB.
In addition, as part of the audit report, the tax auditor must provide form 3CD along with one of the above-mentioned forms.
What Does Our Online Tax Audit Services Package Include?
- Reconciliation of books of accounts
- Maintenance of Books of Accounts
- Management of all financials
- Preparation and assistance in various reports
- Conduct audit services
- Other, if required.
Tax Audit applicability in India
According to Section 44AB, the following professionals/business people must have their accounts audited: The tax audit applicability in India s different basis will be shown below:
- A businessman with gross invoices of more than 1 crore in the previous business year.
- A professional with gross revenue of more than Rs. Fifty lakh in the past fiscal year.
- People who are covered by Sections 44AD, 44AE, 44AF, 44BB, and 44BBB are claiming smaller profits from their businesses than expected.
Steps of Conducting Audit Services
- Accessing Financial Records: The auditor usually demands the papers indicated on the audit preliminary checklist after notifying the organization about the planned audit. A copy of the prior audit report, as well as the original bank statements, receipts, and ledgers, are among the papers. The auditor may also ask for organizational charts, as well as copies of the board and committee minutes, bylaws, and standing rules.
- Organizing a Public Meeting: The auditor will explain the scope of the audit in an open meeting with senior management and key administrative workers. The audit's timeline is established, and any scheduling concerns, such as planned vacations, are reviewed and resolved. Department heads may be asked to notify employees of prospective audit interviews.
- Fieldwork Initiation: With the information acquired from the open meeting, the auditor completes the audit plan. The fieldwork is then carried out after examining the procedures and processes and engaging with the workers. The auditor may speak with the organization about the issues, providing them an opportunity to reply.
- Report Preparation: The auditor also creates a report that summarises the audit's findings. The report must include mathematical errors, payments authorized but not paid, posting issues, and other anomalies, as well as any additional audit concerns (if any). The auditor then prepares a summary of the audit's findings and makes recommendations for problem-solving.
- Organizing a closing Meeting: The auditor requests that management responds to the issues raised in the report. A summary of management's action plan, as well as the problem and anticipated completion date, must be addressed. All parties involved debate the report and management replies in the closing meeting. If there are any issues that have not been addressed, they must be addressed by this time. Our team of professionals evaluates and assesses the due date for tax audit and efficacy of the internal control system. Also offers professional recommendations on tax audit date extension. They keep updating about the tax audit limit.
Non-compliance can result in a penalty: Tax audit services in India
Penalties will be imposed on any organization or individual who does not comply. The penalty for businesses is 0.5 percent of total sales, turnover, or gross receipts. Individuals might face a fine of up to Rs 1,50,000. Some businesses and people forget about the tax filing deadline. Every 30th September of the applicable assessment year, the prepared tax report must be filed with the tax filing. When you hire online tax audit services, you can rest assured that all of your tax reports will be filed on time.
Tax audit due date for ay 2020-21: Auditing records and submitting the audit report
| Taxpayer | Audit Form | Statement Form | Tax audit due | Due date for tax audit |
|---|---|---|---|---|
| Alfreds Futterkiste | Maria Anders | Germany | ||
| A company or a professional who is compelled to be audited by law. | Form 3CA | Form 3CD | The assessment The year ends on September 30th. | The assessment The year ends on September 30th. |
| Anyone apart from those mentioned above | Form 3CB | Form 3CD | The assessment The year ends on September 30th. | The assessment The year ends on September 30th. |
Latest Update on Tax Audit ITR Filing Due Date
On September 9th, the CBDT issued a circular extending the deadlines for certain direct tax compliances for the fiscal year 2021-22.
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Extension of the ITR filing deadline:
- The deadline for filing ITRs for taxpayers who are not subject to tax audit date extension from September 30 to December 31.
- The deadline for filing ITRs in tax audit due date extension cases has been extended to February 22nd.
- The deadline for reporting ITRs for transfer pricing has been extended to February 22nd.
- The deadline for filing a Belated or Revised ITR for FY 20-21 has been extended from December 21 to March 22.
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Audit Report Submission:
- The due date for tax audit submission has been extended to January 22nd.
- The deadline for submitting the tax audit due date in transfer pricing situations has been extended to January 22nd.
Tax Audit Limit for Chartered Accountants
A Chartered Accountant or a firm of Chartered Accountants can undertake a tax audit. If the latter is used, the audit report must include the name of the signatory who signed the audit on behalf of the firm. When registering for the e-filing portal, the signatory must enter his or her membership number. Audit & Supervisory Board Members can also conduct tax audits. Please note that the number of tax audit reports that a certified accountant can submit is limited. The maximum amount of tax audits for certified accountants is limited to 60. For partnerships, tax audit restrictions apply to each member.
Why choose us for tax audit services in India?
Legalpillers helps our clients in providing audits of a company. Execution of internal audit processes in specific areas, as well as the improvement of internal controls. Identifying high-risk regions and developing methods to eliminate or mitigate them. To build an internal audit process mechanism for all newly formed businesses. Internal audit methods should be taught to employees. Internal and external audit processes are reviewed and monitored on a regular basis. Forgiving statutory audit of companies, we have Fully qualified and certified accountants. As a renowned tax audit service online provider, we ensure that our clients receive high-quality services and solutions and stay updated about tax audit due dates for AY 2020-21. Our highly qualified and experienced team can handle any type of audit, whether it's an internal audit or external. How we provide our services as individual tax audit service provider:
- Preparation of the audit approach, as well as preparation for the duration of the audit.
- Providing an effective internal and external auditing service.
- Knowledge sharing and help in educating internal workers for the purpose of internal auditing (if required).
- Identifying important risk areas and developing solutions for them.
- The Auditor's Code of Conduct must be strictly followed.
- Our main goal is to provide risk assurance. Our auditing service assures that the company is run within the Board of Directors' exceptional guidelines.
The information mentioned above is subject to information available as on dates, please cross verify before relying on any of the information as certain due dates and other information may change by the government from time to time.
Tax Audit Service is an extensive reporting made to the department. One who conduct the practice must be an experienced person
Frequently Asked Questions
In practice, an auditor cannot test every transaction, but he or she will test more thoroughly in areas where there is a higher potential of material misstatement. We at LegalPillers examine our clients' operations, policies, and procedures in order to develop a more effective management system for fair policies and procedures.
The audit procedure is the same regardless of the size of the company or its net worth, which is why it is critical to be prepared before the audit. Whether it is a statutory audit of llp or audit of private limited company or statutory audit of partnership firm it's the same. The process of statutory audit planning for the audit, making a draft of the schedule, the verification of various registers and files, verifying the stock-in-trade, and much more.
The Companies Act, 2013 governs company audits. The goal of a corporate audit is to inform the regulatory body about the state of the firm's accounts and finances. Qualified auditors operating as an independent third party provide audit and assurance services, such as company audits. The government has its own set of rules for the audit report form. There are precise rules for the appointment, alteration, and removal of auditors.
The filing tax audit due date extension is up to from October 31 to January 15, 2022, and January 31, 2022, respectively, from the previous due date for tax audit of October 31 and November 30.
Anyone subject to a tax audit must provide the following information to the IRS when submitting an income tax return Form 3CA as an Audit Form and Form 3CD as a Statement giving relevant particulars.
Stock audit procedure is a physical assessment of stock and inventory that is a critical component of a strong internal control system. We have a dedicated stock audit team that guarantees that physical stock is accurately counted and compared to book stock.
The length of the audit will be determined by the size, complexity, and strength of the organization's internal controls. Some can take as little as a few weeks, while others can take months.