16 August 2010
Dear Experts, My auditor has asked me to make ledger scrutiny to a tax audit firm (business income). This is the first time i am going to do that. I know that it is not an easy question to answer becuase there will be lot of points to be considered. But pls. inform me what are the important points to be noted in case of (1) Sales (2) Purchases (3) Assets - Is it enough to see new purchase of assets. (4) Cash in hand (5) Bank A/c - whether BRS available (6) Liabilities (7) Expenses - operative & non-operative. (8) Income - Operative & non-operative. With regards, Rajesh.
17 August 2010
(1) Sales-Is there any abnormal sales return?If so, why?IS the sales comparable with respect to past three to four years' sales?Is there any abnormal booking of sales towards the year end which has got reversed by the beginning of the next financial year? (2) Purchases-Same as above (3)Assets-Selective scrutiny of the FAs can be done along with 100% scrutiny of the additions/deductions during the year. (4)Cash-in-hand-Transactions involving abnormally high amount. If this scrutiny is towards TAX Audit,Form 3CD requirements will answer your query.
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