Posts

Defining the Scope of the Audit with an Engagement Letter

Image
Creating a Strong Foundation: Importance of an Audit Engagement Letter An effective audit engagement letter is a critical component of a successful audit. It establishes the terms of the audit, outlines the responsibilities of both the auditor and client, and serves as a reference point throughout the audit process. In this article we will discuss importance, contents and other aspects of an audit engagement letter. Before proceed further you must be aware of Standard on Auditing issued by the ICAI   SA 210* Agreeing the Terms of Audit Engagements.  Which is soul of this article, but we will discuss only about Engagement letter.  What is an audit engagement letter? An audit engagement letter is a document that outlines the scope and objectives of an audit engagement and serves as a contract (along with your mandate) between the auditor and the client, which also defines services to be provided by the auditor, timeline, cost involved, limitations if any. Why is an audit engagement lette

Audit-verification of fixed assets

Image
Fixed assets verification/audit Brief on audit/verification of fixed assets: Fixed assets are a crucial component of any business, providing the necessary resources for operations and growth. Regular fixed assets verification and audit is important to ensure that they are properly accounted for and protected. Fixed assets verification is the process of physically inspecting and confirming the existence and condition of a company's fixed assets. Verification includes checking location, serial numbers, and condition of each asset, as well as ensuring they are properly recorded in accounting records. The purpose of fixed assets verification is to ensure that the assets are still in use and their values are accurately reflected in financial statements. Fixed assets audit is a more in-depth review of a company's fixed assets. Audit includes physically inspecting and verifying assets, evaluating the company's policies and procedures for managing and protecting them, and evaluatin

Is Income of a producer company exempt?

Image
What is a producer company? A producer company is a type of company recognized under the Companies Act, 2013 in India, that is formed by a group of producers with the aim of collectively carrying out one or more of the specified activities such as production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the members or import of goods or services for their benefit. Producer companies are formed to promote the welfare , to empower farmers and other primary producers by providing them with access to resources, technology, and markets, and by enabling them to collectively negotiate better prices for their products.  A Producer Company can also engage in activities such as processing, packaging, grading, handling, and marketing of the products produced by its members. Basic requirements for forming a producer company: I am not going to discuss other general documentation related with formation of a producer company. As other general

Form INC-20A- Declaration for commencement of business

Image
Form INC-20A- Declaration for commencement of business: Important changes  Form INC 20A is a form that is required to be filed with the Registrar of Companies (RoC) under the Companies Act, 2013 in India. It is a declaration of commencement of business by a company. A company is required to file form INC 20A within 180 days of its incorporation, as a proof of commencement of business.  The form must be signed by a director of the company and be accompanied by a declaration from a practicing professional certifying that the company has actually started its business operations. MCA vide notification no G.S.R. 42(E) dated 19th January 2023 revised form INC-20A.  Now the revised INC-20A form requires the company to disclose the following additional details:  -Registered office along with  Longitude & Latitude -Details of subscriber payment for value of shares. i.e. bank account, IFSC etc. -Photograph of Registered Office showing external building and inside office also showing therein

New attachments to form AOC-5

Image
Notice of address at which books of account are to be maintained: Form AOC-5 As per the provision of the Company Act 2013, every company is required to maintain books of account and any other documents at the registered office of the company. However,  these documents can be kept at places other than registered office if decided by the board. In such situation, the form AOC-5 is used to notify the Registrar of Companies (ROC) of the address (other than register office) where the company's books of account, and other relevant documents, will be kept.  Earlier only two attachments were required i.e. board resolution and optional attachment for AOC-5. Now, MCA vide notification no G.S.R. 40(E) dated 20th January 2023 substituted form AOC-5. As per revised form AOC-5 following new additional attachments are required:  Photograph of registered office showing external building and second will be inside office also showing therein at least one director/ KMP who has affixed his/her digi