An Introduction to Auditors and Auditing Services in Kolkata

An Introduction to Auditors and Auditing Services in Kolkata

India’s standards of auditing definitely differ from those in the rest of the world. It is advisable that you have the basic knowledge of the procedures that happen in our country, more specifically in the city of Kolkata. Let’s check them out.

The classification auditing services: Based on the mode of conducting, the process can be divided into two: •

Statutory

•

Internal

Statutory audits are needed to report a business’s state of finances and accounts.

The generated report is sent to the Government of India. The process has to be carried out by professionals who work external to the company or independently.

Also, the report has to comply with the format set by the government.

A company as a legacy of its internal management system, on the other hand, carries out internal audits. The purpose is to scrutinise and analyse the business’s

finances and its productivity. The report can be prepared by an independent auditing service in Kolkata or by its very own internal team.

In our country, a company that has registered its shares on the stock exchange, must nurture a system for internal audits unfailingly. Those not listed, but with an average turnover of Rs. 5 crores in three years, or with reserves and share capital exceeding Rs. 50 lakh at the onset of the financial year, should also have this system. Moreover, the statutory audit report should mention the internal audit reports.

What does a statutory auditor in Kolkata do?

The report preparation is done annually for the fiscal years starting from the 1st of April to the 31st of March. Based on the requirement, the report can be prepared for: •

Tax audits

•

Company audits

Income Tax Act 1961 in the Indian Constitution under Section 44AB has marked the first process mandatory for businesses with a turnover exceeding Rs. 1 crore and individuals of a profession with gross receipts over Rs. 25 lakhs. The law says the accounts of these individuals and businesses must be audited by independent Chartered Accountants.

The services of such a statutory tax auditor in Kolkata are applicable to all – individuals, companies, partnership firms, and any other business entity. The professional has to submit the report by the 30th of September every year. In case of non-compliance, a penalty of 0.5% of the turnover of Rs. 1 lakh (the lower amount) is applicable.

Company audits, on the other hand, fall under the Companies Act 1956. As per the Act, all companies must have their accounts audited each fiscal year, no matter what the nature of the business or its turnover is.

According to the law, the board of directors of a company has to appoint an auditor in the beginning. Following that, the shareholders have to appoint other auditing professionals in each Annual General Meeting. The stint of this professional will last from one AG Meeting to the next.

In the year 2012, a new Companies Bill was passed, which states that the professional shall be appointed for five consecutive AG Meetings. However, this term is restricted to one for individuals and two for partnership firms.

Who cannot become a statutory company auditor in Kolkata?

•

Body corporate

•

An employee of the company.

•

Partner of the employee of the company.

•

Individuals indebted to the company (amount exceeding Rs. 1000).

•

Individuals holding securities in the company right after the 2000 amendment to the Companies Act.

A statutory company auditor in Kolkata needs to prepare a report, which complies with the Company Auditor’s Report Order (CARO) 2003. Aspects like inventory, fixed assets, statutory dues, and internal controls should be included in this report. Also, it should be submitted prior to the AG Meeting.

The process of auditing is conducted to put forward an opinion about a business that’s fair and true. It should be entirely information-oriented and thoroughly verified. Following opinions matter in the report – qualified, unqualified, disclaimer, and adverse.

Want to prepare your business for the report? Hire dependable auditing services now.