Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT Audit :: form 3cd :: cpt :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: VAT RATES :: articles on VAT and GST in India :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
« News Headlines »
 Draft Rules for prescribing the method of valuation of fair market value in respect of the trust or the institution-Chapter XII-EB of the Income-tax Act, 1961- reg.
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout

ICAI - Auditors to physically verify the cash and bank balances of companies
April, 25th 2009

Banking and market regulators are considering a proposal authorising auditors to directly verify financial information of their clients with banks where they hold accounts, a person familiar with the situation told ET.

Currently, rules of the Institute of Chartered Accounts of India require auditors to physically verify the cash and bank balances of companies they audit, and not merely rely on statements provided by the company secretary or the chief financial officer. However, banks are currently under no legal obligation to share such information with auditors.

A key contributor to the Rs 7,000-crore accounting fraud at Satyam Computer was auditors not verifying bank account statements and fixed deposit certificates of the company with the respective banks. The IT firm allegedly supplied incorrect information to its auditors about available cash balances by forging the letterhead of one of its banks.

Once the proposed new rules are in place, the Reserve Bank of India and the Securities & Exchange Board of India (Sebi) will make it mandatory for companies to reveal details of their banking arrangements and for banks to share the account details with auditors. It is learnt that Sebi is planning to incorporate this in the listing agreement between companies and stock exchanges.

The issue is likely to come up for discussion at the next meeting of the Sebi Committee on Disclosures & Accounting Standards (SCODA), the person involved in the process told ET.

Auditors do not have any relationship with banks, nor are banks legally bound to provide information sought by auditors. Broadly speaking, we do not get response from at least 30% of banks. Some companies misuse the system by organising information from their banks, said a person who works with one of the Big Four auditors. But banks claim they are not to blame.

Its not that banks dont cooperate with auditors in this process... Sometimes, banks also seek a confirmatory letter from the company that this information has to be provided. On many occasions, letters seeking confidential information are addressed to the wrong person in the bank. All these practical issues may delay the response sought by the auditor, said a senior banker with one of the leading private sector banks.

Sebi is likely to take a call after it receives the peer review report as part of which working papers (relating to financial statements) of the Sensex and the Nifty companies will be checked by a committee of auditors chosen by Sebi. Once the peer review report is out, Sebi will look into the areas where more disclosures are required. The auditors panel includes Fraser & Ross, MP Chitale, Haribhakti, GM Kapadia and AF Ferguson.

Companies that are subject to the review welcomed the move but said Sebi could make it a part of the listing agreement if it wants them to follow the process regularly. They said Sebi should widen the ambit of the exercise by bringing other firms, especially mid-caps, under the purview of the exercise.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions