|
New Excise Audit System - CIDA
|
The Central Excise Commissionerate and the assessee unit have maintained and developed, over a period of time, a working relationship in respect of conduct of Audits under the Central Excise Law. To further improve this equation and relationship and also to employ the respective resources of both the Department and the assessee unit more effectively and to have more congenial, cordial, co-operative, open and transparent relationship. The scheme of new audit system has been already implemented, with effect from Dec 1999 as per the new manual and the programme.
Salient Features
The new Audit System aims at complete transparency openness in the system of Audit so as to remove administration irritants. This will be ensured through following safe guards.
-
Advance notice will be given to each assessee before conduct of Audit. Assessee's convenience will be given due importance.
-
The Audit process will be personally monitored by senior officers the level of Joint Commissioners(for more than Rs. 5 crore and Rs. 1 crore units).
-
Audit report will be discussed with the assessee.
-
Reasons for any of points made will be documented. It will help future audits.
-
Detailed audit plan will be prepared so that information sought will be very specific rather than general.
-
All audit points by the audit parties will be discussed by an Audit Board which will consist of Commissioner/Joint Commissioners/Assistant Commissioner(Audit) and Divisional Assistant Commissioners. The Board will review the Audit reports submitted by the Audit parties. It will comment on the quality of the Audit reports and discourage raising of flippant points.
-
In order to ensure Auditing in a professional manner, all the Superintendents and Inspectors will be covered by a comprehensive Training Programme in Accountancy and accepted Audit Principles.
Advantages
Department
-
Manual gives a message that audit is not a routine exercise of review of statutory records and documents.
-
The new manual shifts the focus to preparatory work and verification of private records.
-
Due importance has been given to the returns and reports submitted to other law enforcing agencies.
-
Concept of evaluation of internal accounting system has been introduced. This will help in determination of levels of verification and scrutiny.
-
The concept of working papers would ensure that auditors record their work in detail, which can be referred and used by others. Working papers would be of immense help in preparatory work for future audits of the same unit.
-
The Manual and the Programme have focussed on the importance of discussions with the assessee's after audit is over and recovery of short collections.
Assessee
-
Preparatory work done by the audit parties in the office would reduce the time required to be spent in the factory.
-
Time required for discussion with the management will be less. The discussion will mostly by to get clarifications.
-
The auditors are required to be transparent and there is no veil of secrecy.
-
Evaluation of internal systems by the audit parties will help the assessee to strengthen his systems to ensure that the legal requirements are fulfilled.
-
At the end of the audit, assessee will come to know what the audit party has found and he will not have to wait for show cause notice or communication from the Range Office.
-
The assessee gets an opportunity to explain his views to the auditors and get clarifications across the table.
Hope this helps...................................:)
CAclubindia
