Professional Updates

Management Representation Letter on Statutory Audit The Management Representation Letter is required to be furnished before the Financial Statements are signed. The auditor should obtain representations from management, wherever considered appropriate. The auditor should obtain evidence that management acknowledges its responsibility for the appropriate preparation and presentation of financial information and that management has approved the financial information. A sample format of management representation letter (for a company under the Companies Act, 2013) is given below which is required to be tailored for each circumstance . Written representations are an important source of audit evidence as per "SA 580 WRITTEN REPRESENTATIONS". Although written representations provide necessary audit evidence, they do not provide sufficient appropriate audit evidence on their own about any of the matters with which they deal. Representations by management cannot be a substitute fo

Financial statements of a company on the letter head of an auditor Certain instances have been observed where in auditor has used own letter head for printing of balance sheets, profit loss statements of a company. Financials statements of a company should not be printed on letter head of an auditor. Same has also been pointed out by the ICAI in journal published in the August, 1982 issue of ‘the Chartered Accountant’ p. 175.  This practice can lead to several issues: 1. Confusion of Roles: It can create confusion about the role of the auditor. The letterhead implies that the auditor is responsible for the accuracy and completeness of the financial statements, which may not be the case. 2. Lack of Independence: The use of the auditor's letterhead can compromise their independence. An auditor should be impartial and objective, and using their letterhead can suggest a closer relationship with the company than is appropriate. 3. Misrepresentation of the Company: The financial state

Physical verification of the Registered Office of the company MCA vide notification dated 18th August 2022 amended Companies (Incorporation) Rules, 2014 and issued "the Companies (Incorporation) Third Amendment Rules, 2022". Vide this Rule 25B inserted to prescribe physical verification of registered office of the company.  As per the rule, the Registrar, based upon the information or documents made  available on MCA 21, shall visit at the address of the registered office of the company and may cause the physical verification of the said registered office for the purposes of sub-section (9) of section 12 * , in presence of two independent witness of the locality in which the said registered office is situated and may also seek assistance of the local Police for such verification , if required. The Registrar shall carry the documents as filed on MCA 21 in support of the address of the registered office of the company for the purposes of physical verification and to check t

Form 67 can now be furnished on or before the end of the relevant Assessment Year CBDT vide notification no 100/2022 dated 18th August 2022 amends Rule 128 of the Income-tax Rules, 1962, providing major relief to taxpayers in the matter of claiming Foreign Tax Credit (FTC). The Statement in Form No. 67 can now be furnished on or before the end of the relevant Assessment Year . Earlier Form 67 was required to be filed before the due date of filing of return as specified u/s 139(1). This amendment is effective from the 1st day of April, 2022 so that it applies to all the claims of foreign tax credit furnished during the financial year 2022-2023.  Why do assessee need to submit Form 67? Form 67 will be required to submit if assessee want to claim credit of foreign tax paid in a country or specified territory outside India. Assessee will also be required to submit Form 67 in case of carry backward of loss of the current year resulting in refund of foreign tax for which credit has been cla

Latest format of Financial Statements of LLP The ICAI has issued technical guide for preparation and presentation of financial statements of limited liability partnership (LLP). Where in ICAI has prescribed format for preparation of financials of LLP which is in line with the Schedule III format for non-Ind AS following companies. The guide also prescribe for voluntary rounding off.  LLP is a body corporate formed and incorporated under LLP Act and is a legal entity separate from that of its partners. The LLP is a corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid of a company and a partnership. The Technical Guide is relevant for the purpose of preparation of the financial statements of the Limited Liability Partnership in compliance with applicable accounting standards.  I have attached herewi

Format of disclosure under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 1. The disclosure as required by The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 is required to be made in the annual Financial Statements of the entity wherever such Financial Statements are required to be audited under any law.  2. Accordingly you need to attach MSME disclosure to LLP form 08 if you are liable for audit under LLP Act. Attached herewith format of MSME disclosure for ease reference.  3. Similar disclosure also required in the financial statements of the company as per notification no G.S.R. 679(E) dated 04th September 2015. 4.Do not simply attach or insert blank disclosure if you have outstanding dues to MSME. Disclose whatever is applicable in your case as per your records. As if incase your vendor file case against you for outstanding payment and your books not having such disclosure it may lead to levy of penalties. 5.Most of the cases it has been

Maharashtra minimum wages July 2022 to December 2022 Maharashtra government has increased Variable Dearness Allowance (VDA) w.e.f. July 2022, for scheduled employment. Revised minimum wages are applicable w.e.f. 01st July  2022. Maharashtra Minimum wages July 2022 to December 2022 Here is the official notification no 21836 for latest minimum wages payable in the state of Maharashtra. Notification contains total wages (Basic+VDA) for all scheduled employment. I.e. Minimum wages. Maharashtra minimum wages effective from July 2022

Reduction of time limit for verification of Income Tax Return (ITR) from within 120 days to 30 days of submitting ITR. CBDT issued notification no 05/2022 dated 29th July 2022 to revise time limit for verification of ITR. Now ITR filed on or after 01/08/2022 need to verify within 30days of submitting online instead of earlier time of 120 days This revised time limit will be applicable for ITRs filed on or after 01/08/2022 Existing time limit of 120 days will be applicable for ITRs filed up to 31st July 2022 ITRs not verified within 30days of submission would be treated as late filed and all consequences of late filing of return under the Act shall follow. W.e.f. 01/08/2022 ITR-V can be sent by speed post only ! Can't say ITR sent by post but not received at cpc :- The date of dispatch of Speed Post of duly verified ITR-V shall be considered for the purpose of determination of the 30 days period. Date of verification of ITR will be the date of filing ITR if verification done post