Internal Auditor can't undertake Goods and Service
Tax (GST) Audit of same Entity due to Role Conflict:
ICAI
ICAI has clarified that `internal auditor' of an entity can't undertake `GST Audit' of the same
entity due to role conflict of Internal Auditor and Statutory Auditor. Besides, bar on `internal
auditor' to accept `tax audit' (under Income Tax) will also be applicable to `GST Audit' (under
CGST Act 2017).
We have received enquiries from the members at large and other stakeholders as to whether an
internal auditor of an entity can also undertake GST Audit of the same entity as required under
the Central Goods and Service Act, 2017.
The Council of the Institute, while considering the issue at its 378th Meeting held on 26th and
27th September, 2018, noted its earlier decision taken at its 281st Meeting held from 3rd to 5th
October, 2008, that internal auditor of an assessee, whether working with the organization or
independently practising Chartered Accountant being an individual chartered accountant or a
firm of chartered accountants, cannot be appointed as his Tax auditor (under the Income Tax
Act, 1961).
Upon consideration, the Council has decided that based on the conflict in roles as statutory and
internal auditor simultaneously, the bar on internal auditor of an entity to accept tax audit (under
Income Tax Act, 1961) will also be applicable to GST Audit (under the Central Goods and
Service Act, 2017).Accordingly, it is clarified that an Internal Auditor of an entity cannot
undertake GST Audit of the same entity.
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