FOR INDIA'S BEST CA CS CMA VIDEO CLASSES CALL 9980100288 OR VISIT HERE
They are the best ca final faculties in India. They have produced many toppers & rank holders. Their video classes are available only here -
CHECK VIDEO CLASSES HERE

One in Five CA’s has breached Tax Audit Norms – CAG

One in Five CA’s has breached Tax Audit Norms – CAG

As per a report by the (Comptroller and Auditor General of India) CAG, approximately 1 out of every 5 chartered accountants (CAs) in India appear to have breached tax audit norms. This has prompted the The Institute of Chartered Accountants in India (ICAI) – the statutory regulator, to form a committee to examine these violations.

The CAG report has pointed out that at least 18.87 per cent of CAs (12,435) in India issued more tax audit reports than prescribed by ICAI for assessment year 2013-14. As per the rules now in force stipulate that, a partner in a chartered accountancy firm can sign not more than 45 tax audits in a year. So if there are 10 partners in a CA firm, then all the partners can collectively sign 450 tax audit reports. But, this maximum limit of 450 tax audit assignments can also be distributed between the partners in any manner. Thus, a single partner can also sign 450 tax audits if the other nine decide not to sign any audit report, the ICAI has indicated on its website.

According to Manoj Fadnis, president of ICAI, the issue is being addressed and the group is in touch with the CAG and Central Board of Direct Taxes or CBDT. “This issue (CAG report) needs in-depth analysis and has more dimensions that what appears on the surface,” said Fadnis in an email response to a media house.

Fadnis said it may be possible that the cases mentioned in the CAG report have not considered the exemptions given by the ICAI to auditors for tax audits under certain sections. “The cases of non-compliance will be dealt in accordance with the provisions of Chartered Accountants Act, and rules framed there under,” added Fadnis. He also said that the ICAI has also constituted a tax audit monitoring cell to check violations.

Over the last few years, the spotlight has been on some of these violations by auditors. In 2008, founder of Satyam Computer Services, Ramalinga Raju confessed to an accounting fraud of Rs 7,136 crore. More recently, proxy investor advisory service firms have called for an examination of the role of auditors in the ongoing fight between United Spirits Ltd board and its chairman Vijay Mallya. The board wants Mallya to step down after an internal probe revealed a diversion of funds from USL and its subsidiaries to some UB Group companies.

The CAG report has also found that CAs have “certified wrong information/claims  for various exemptions” in at least 74 cases having a tax effect of Rs 259.72 crore in assessment year 2013-14.

The report said that tax auditors did not report correct information regarding depreciation resulting in irregular allowance in 46 cases involving “short levy of tax of Rs 557.79 crore”. Similarly in 42 cases, capital expenditure was incorrectly allowed as the CAs did not report the amount in their tax audit reports resulting in short levy of tax of Rs 477.89 crore. According to some chartered accountants, CAs are violating the norms because there are too many CA firms and the Indian market is too fragmented.

One in Five CA’s has breached Tax Audit Norms – CAG

cakart

At CAKART www.cakart.in you will get everything that you need to be successful in your CA CS CMA exam – India’s best faculty video classes (online or in pen drive) most popular books of best authors (ebooks hard copies) best scanners and all exam related information and notifications.Visit www.cakart.in and chat with our counsellors any time. We are happy to help you make successful in your exams.

Click here to download FREE CA CS CMA books.

Leave a comment

Your email address will not be published. Required fields are marked *

//