Written back of creditors
Querist : Anonymous
Management says the auditor to written back the creditors under Section 41 of IT Act, 1961 and take that amount in P&L A/c in that case is it responsibility of CA to take written representation of the same from the management?
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While conducting the audit; if the auditor verifies that a liability is long outstanding; it means it is no more payable.
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In such situation; the management is right to write back the amount and credit the same to the profit and loss account.
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No written explanations are required for such transactions.
Querist : Anonymous
You can do so and transfer the amount of creditors to P & L A/c under the head liabilities written back
Querist : Anonymous
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