Vinod (CA in Practice) (445 Points)
12 August 2015dear friends,
A partnership firm angaged in civil construction does not follow AS7 and recognize income and expenses on cash basis. Do we need to report this anywhere in tax audit report ? Please share your views. Thanks in advance..vinodaca74 @ gmail.com
Rajagopalakrishnan R
(PARTNER)
(1422 Points)
Replied 12 August 2015
Yes definitely. AS 7 is mandatory as far as all entities are concerned. When discharging attest functions members must qualify non adherence to mandatory accounting standards. This is esp true for tax audit cases. It would be more value addition to the client if you convince them to follow AS 7 and guide them in the process rather than merely qualify the report. even if you qualify, it may be very difficult for you to quantify the effect of the qualification
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