Released - CD of Compendium of Opinions containing opinions finalised by the Expert Advisory Committee upto January 2006 as contained in Volume I to V

Internal Auditor cannot be tax auditor – Further Clarification

The Council in its 281st meeting held from 3rd to 5th October, 2008 decided that an internal auditor of an assessee, whether working with the organization or an independently practicing Chartered Accountant being an individual chartered accountants or a firm of chartered accountants, could not be appointed as his tax auditor.

The said decision came into effect from December 12, 2008. As per the decision an internal auditor cannot carryout tax audit on or after December 12, 2008. Subsequently representations have been received pointing out the hardship being caused by the abovesaid decision in respect of those internal auditors who have been appointed as tax auditors for the financial 2008-09 on or before December 12, 2008. The Council considering this hardship has decided that the decision taken by the Council at its meeting between 3rd to 5th October, 2008 shall be applicable to all appointments as tax auditor made on or after December 12, 2008 and accordingly those internal auditors whose appointment have been made as tax auditors before December 12, 2008, can carry out the tax audit of the financial year ending on March 31, 2009, i.e., Assessment Year 2009-2010 only.

ICAI Council Clears Two More Auditing Standards to Enhance Quality of Audits

Press Release

ICAI Council Clears Two More Auditing Standards to Enhance Quality of Audits

The Council of the Institute of Chartered Accountants of India at its 286th meeting held on March 8, 2009 cleared two more Standards on Auditing (SAs), i.e., Revised SA 500, Audit Evidence and SA 720, The Auditor’s Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements in the direction of enhancing the quality of audits.

Revised Standard on Auditing (SA) 500, Audit Evidence

Audit evidence is fundamental aspect of an audit on which the final audit opinion and the audit report is based. The quality and effectiveness of an audit is, therefore, to a large extent affected by the adequacy and appropriateness of the auditor’s procedures in gathering and evaluating the audit evidence. Though the Council of the Institute had in May 1988 issued a Standard on Audit Evidence, the Revised version of this Standard cleared today contains greater guidance for the auditors on critical aspects of audit evidence such as what constitutes sufficient appropriate audit evidence, information to be used as audit evidence, factors to consider in selecting items for testing, how to respond in case of inconsistency in or doubts over reliability of audit evidence. In other words, the Revised Standard in principles and procedures to be followed by them to obtain and evaluate audit evidence which is sufficient and appropriate for the purpose of their audit.

This Revised Standard is effective for audits of all financial statements for periods beginning on or after April 1, 2009.

Standard on Auditing (SA) 720, The Auditor’s Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements

The responsibility the auditor, in an audit of financial statements, is to express an opinion on the truth and fairness of the financial statements, the basic objective of an audit being to lend credibility to the financial statements. In a number of cases, especially companies, the annual reports or other such documents that contain audited financial statements and audit report thereon, issued to stakeholders, contain a lot of other information which is related/ unrelated to the financial statements. For example, reports by managements/ directors, financial ratios, etc. The Standard is a first of its kind Standard to have been issued by the Institute and requires the auditor to read such other information to identify any material inconsistencies vis a vis the audited financial statements since these can undermine the credibility of those financial statements and the audit report thereon. The Standard contains detailed guidance on auditor’s procedures where such material inconsistency is identified or in the process of reading such other information, any apparent misstatement of facts come to the attention of the auditor.

This Standard is effective for audits of all financial statements for periods beginning on or after April 1, 2010.

The Sunday excel tip - Alternative to comment box

Read all our excel tips by clicking here

Ever tired of looking at the dull yellow comment boxes popping out when you roll your mouse over a cell, well here's an alternative to those dull yellow boxes.

1. Select the cell where you want to see the message;
2. In Excel 2003, click on the Data menu and select Validation. In Excel 2007, from the Data tab select the Data Validation command from the Data Tools group;
3. Select the Input Message tab;
4. Put a check mark in the 'Show input message when cell is selected' fiel

d;
5. Type a heading for your message in theTitle field. This text will appear in bold at the top of your message;
6. Enter your message in the 'Input message' fie

ld;
7. Click OK.

Now, anytime you move to that cell, the message will pop up. If you develop workbooks for other users this is great tool to use to help them know what to do.

If you have any questions on excel, pls email them to us, we would be glad to answer your questions

Announcement for Empanelment as Peer Reviewer with the Peer Review Board

The global & national economic environment has in recent times been featured by the turbulences on the financial scenario following the unearthing of the frauds and procedural and financial malpractices. The credibility of the opinion expressed by the auditors on the independent review of financial statements and records have come under close scrutiny. All these developments manifest the need of a mechanism designed on the lines of the sound international practices and molded in light of the indigenous environmental tenets, which provides, apart from the corporate governance, due assurance on the quality of the review and the compliance of the generally accepted parameters on the part of the auditors.

In its proactive pursuit to upgrade and maintain audit quality standards, the Council of the Institute of Chartered Accountants of India took initiative as far back as 1998 to introduce a system of review of the work of professionals and subsequently the Indian accountancy profession took a giant leap forward with the establishment of Peer Review Board in April 2002. Such an endeavour of the Council of the Institute of Chartered Accountants of India (ICAI) aims to maintain and enhance the quality of attestation services and to guide its members in improving their performance and ensuring adherence to various technical standards issued by it from time to time. It is the Institute’s endeavour to meet the demands of high quality assurance, consistency and greater transparency.

Since, the Peer Reviews are to be carried out by Reviewers empanelled with the Peer Review Board. The criteria for empanelment as a Reviewer is that a person should be a member;  possess at least ten years' experience of audit; and be currently active in the practice of accounting and auditing Applications were invited from members fulfilling the above criteria for empanelment with the Board. More than 4316 members have been empanelled as Reviewers.

To ensure that the reviews are carried out in time and as many Practice Units are reviewed as possible, including those located in mofusil areas, the Board wishes to enlarge the resource pool of Reviewers. Members fulfilling the criteria mentioned above are invited to empanel themselves as Reviewers by applying in the prescribed format as given below (or available on Institute's Website www.icai.org under the link 'PEER REVIEW BOARD' or can be obtained from the Institute's Office at New Delhi) or send to Ms. Seema Gerotra, Secretary, Peer Review Board, The Institute of Chartered Accountants of India, P.O. Box 7100, I.P. Marg, New Delhi 110 002. or at email id peerreviewboard@icai.in.

We hope, in order to achieve the objective of Peer Review viz., enhancement in the quality of attestation services performed by the members of the Institute, cooperation would be forthcoming from the members by empanelling as a Reviewer.