CA Suraj Lakhotia

NFRA and ICAI at Odds Over Plans to Sync Audits with Global Norms! Who is NFRA?   The National Financial Reporting Authority (NFRA) is an independent regulator overseeing the auditing profession and Indian Accounting Standards under the Companies Act 2013. Why are NFRA and ICAI at odds, despite both working for the betterment of auditors?   The tension arises from differing roles and regulatory approaches. The Institute of Chartered Accountants of India supports self-regulation and auditor interests, while NFRA focuses on stricter oversight, emphasizing public interest and audit quality. This divergence creates friction as both strive for auditor improvement. NFRA’s draft norms overhaul the existing Standard on Auditing (SA) 600, affecting listed companies and banks, except state-run ones.  ICAI fears that these norms could concentrate audit work among larger firms, adversely impacting small and medium practitioner firms. ICAI also opposes mandating principal auditors to assess the competence of component auditors, arguing that all auditors share the same education, training, and licensing under ICAI. What is the take of other regulatory bodies? Despite these concerns, the Comptroller & Auditor General of India, Reserve Bank of India (RBI), and Securities and Exchange Board of India (SEBI) support aligning domestic audit standards with global ones. NFRA believes this revamp is essential to prevent corporate fraud by fostering greater accountability among auditors, whose work impacts millions of retail investors. #auditreforms #icai #nfra #auditquality #corporategovernance 

11

6 Comments

NFRA vs. ICAI: The Audit Standards Debate The National Financial Reporting Authority (NFRA) and the Institute of Chartered Accountants of India (ICAI) are at odds over proposed changes to audit standard SA 600 ¹ ². What's the Issue? NFRA wants to align SA 600 with international standards, making principal auditors accountable for subsidiary audits. ICAI fears this will concentrate the audit market in a few hands, harming small practitioners ¹ ². Key Concerns: - Concentration of Market: ICAI worries that revising SA 600 will lead to bigger firms dominating the audit market, pushing out smaller firms ¹. - Principal Auditor's Responsibility: NFRA proposes holding principal auditors accountable for subsidiary audits, which ICAI believes is unfair ². - Impact on Small Firms: ICAI claims that 97,000 small CA firms will be affected if NFRA's changes are implemented [2). The Way Forward: ICAI suggests improving processes and implementing additional checks and balances instead of revising SA 600 ². NFRA's goal is to enhance audit quality and reliability, crucial for India's growing economy ¹. https://lnkd.in/gqBgbm5Q Share your thoughts on this controversy. How can NFRA and ICAI find a balance between audit quality and supporting small practitioners? Let's discuss! 💬 #NFRA #ICAI #AuditStandards #SA600 #Accounting #Finance #India

5

Dismisses challenge to show cause notice premised on audit findings : HC Delhi Magicon Impex Private Limited Ruling : Delhi HC dismisses challenge to show cause notice (SCN) by holding that “SCN may be premised on the findings of the audit report, the same is within the statutory framework.”; Pursuant to an audit, SCN as per section 74 was issued; On receipt of multiple audit memos, the same not only indicated the findings of the auditors, but also called upon the assessee to pay tax as determined, along with the interest and penalties as applicable; Besides, clarifies that “Any irregularities in issuing the audit memos does not impinge the validity of the impugned SCN”; Thus, concluding that SCN cannot be set aside at ‘threshold stage’ disposes of the petition with a direction to Adjudicating Authority to consider the response to SCN, if filed by Assessee #GST #GSTLitigation #GSTUpdates #GSTCompliances #GSTNews

19

2 Comments

• The NFRA fined M/s Venkatesh & Co ₹2 crore for professional misconduct in the 2019-20 Coffee Day Enterprises audit. • Auditors Dasaraty V and Desikan G were banned for 10 and 5 years, respectively. • Dasaraty was also fined ₹10 lakh, and Desikan ₹5 lakh. • The penalties stemmed from a Sebi report revealing a ₹3,535 crore fund diversion from Coffee Day subsidiaries to Mysore Amalgamated Coffee Estate Limited. • The auditors failed to report the fraud and protect public interest. • The order will take effect after 30 days. • In August, NFRA fined KPMG affiliate M/s BSR & Associates LLP ₹10 crore and debarred two auditors for lapses in the 2018-19 Coffee Day audit.

2

PPF accounts with excess contributions beyond the Rs.1.5 lakh annual limit, multiple accounts – all such accounts will be declared irregular with changes proposed. Check out how these new rules will affect the irregular accounts. https://lnkd.in/gUERa8i5 PS: I had written about this 2 years back when I found few of my clients contributing more than the stipulated limit in PPF. PPF rules are finally catching up from October this year. #PPF

5

Join us today for the Panel Discussion on "2nd Accounting Standards Day" starting at 02:30 PM at NDMC Convention Centre, CP, New Delhi. We'll be joined by experts to delve into the below:- 📌 Framework, Formats & Applicability of Accounting Standards 📌 Critical aspects of assets related standards 📌Critical aspects of Liabilities & Expense related standards 📌 Critical aspects of Revenue related standards For further details refer attached flyer. #AccountingStandardsDay #Accounting #NewDelhi

12

1 Comment

I am thrilled to announce the 3rd edition of "Audit of Financial Statements" by CA Pranav Jain, published by Taxmann is now available This game-changing guide takes you on a comprehensive journey through the entire audit cycle, from appointment to report issuance, with a laser focus on risk-based auditing. Perfect for audit assistants, partners, and practitioners seeking a detailed, easy-to-understand resource to elevate their skills. Dive into: - Real-world scenarios and numerical illustrations - Linkages to legal requirements and illustrative disclosures - Guidance on Audit trail Don't miss out! Get your copy now and transform your audit practice! #AuditRevolution #FinancialStatements #NewBook #AuditExcellence #ProfessionalDevelopment #RiskBasedAuditing

24

16 Comments

😱 NFRA calls ICAI’s new audit standards “VOID” All you need to know under a minute: NFRA also plans a fresh review as the battle over quality management standards heats up! 🔸The National Financial Reporting Authority (NFRA) has strongly opposed The Institute of Chartered Accountants of India's (ICAI) recent release of revised Standards of Quality Management (SQMs), labelling them as legally void. 🔸NFRA contends that these standards should have been notified with formal legal backing, aligning with the requirements of auditing standards under Section 143 (10) of the Companies Act. 🔸ICAI, however, argues that SQMs are not audit standards and therefore do not require NFRA’s approval. 🔸In August 2021, the Ministry of Corporate Affairs (MCA) directed ICAI to consult NFRA on any audit-related standards. 🔸While ICAI initially sought time to submit SQM drafts to NFRA, it later issued the standards without doing so. 👉  NFRA, whose board includes representatives from SEBI, CAG, and RBI, has committed to thoroughly reviewing the SQMs in its upcoming November meeting. 👉 The revised standards — SQM 1 and SQM 2 — focus on enhancing risk assessment, adaptable audit frameworks, and engagement quality reviews. 👉 They are scheduled to take effect in April 2024 and April 2026, respectively. 🔴 Without government approval, NFRA warns that practicing Chartered Accountants (CAs) may be unable to follow these standards. 📌 The Implications of unapproved standards may prevent CAs from adopting ICAI’s revisions, potentially widening the regulatory rift. What are your thoughts on the same? Follow CA Archit Agarwal for more such news and insights. #AuditStandards #ICAI #NFRA #Accounting #SQM #CorporateGovernance #CAG #SEBI #RBI #MCA #QualityManagement

151

5 Comments

🌟 ICAI's Commitment to Stress Management & Work-Life Balance 🌟 In today's high-pressure work environment, stress management and work-life balance are more important than ever. The Institute of Chartered Accountants of India (ICAI) is committed to the well-being of its members by introducing initiatives to promote mental and physical wellness. Key initiatives include: ✅ Mindfulness & Meditation Programs ✅ Work-Life Balance Workshops ✅ Personalized Counseling Services ✅ Health & Fitness Campaigns ICAI's dedicated group, led by Mrs. Seema Gerotra, is working to implement comprehensive support measures, from wellness webinars to industry collaboration for flexible work models. We remain committed to fostering a resilient, productive, and balanced professional community. #ICAI #StressManagement #WorkLifeBalance #CharteredAccountants #MentalHealth #WellBeing #Motivation #Inspiration #PersonalDevelopment #Success #Goals #Leadership #Management #creativity #HumanResources #recruitment #Innovation #Entrepreneurship #Finance #Investing #Economy #VentureCapital #Markets #Linkedin #personalbranding #HR #employeengagement #talentacquisition #fakihivf

10

I was chatting with some colleagues around MCA requirements for filing PAS-3 (necessary documentation for investments into private companies as per Companies Act 2013) and, for the life of me, can't understand why valuation reports are still a thing. It's effectively a ₹15,000 (and higher at different stages) tax on startups for absolutely no purpose I can discern. There's enough red tape and paperwork as it is doing business in India, with strong regulations around creating and operating an AIF in the first place. The dirty secret here is that 'registered valuers' will effectively back-calculate any value you need, as this is already a complex decision, achieved through negotiation between the Founders and the Fund. There has to be more rational rules for startups, since 'traditional' valuation has no meaning in early stage (seed, Pre-A). If you're using discounted cash flow methods, there's no way to justify allotting a ₹50 crore valuation to a company who's still figuring out product market fit. My wishlist to improve the funding ecosystem is to get rid of this, at least when registered funds are involved. Would love to hear more views on this. #funding #fundraising #startups #venturecapital

93

16 Comments

Understanding Tax-Free Income Sources in India for FY 2024-2025 1. Agricultural Income. 2. Interest on PPF (Public Provident Fund): Interest earned on investments in PPF is tax-free, provided the yearly contribution does not exceed Rs. 2.5 lakhs. 3. Income from LIC SIIP (Systematic Investment Plan): Income from LIC SIP is tax-free if the yearly premium contribution is less than Rs. 2.5 lakhs annually. 4. Profit from Long-Term Sale of Shares Up to Rs. 1 Lakh. 5. Gifts Received from Specified Relatives. 6. Gifts Received on Marriage. 7. Maturity Proceeds from Life Insurance Policies: Maturity proceeds from life insurance policies are tax-free if the yearly premium paid is less than Rs. 5 lakhs from 2023 onwards. 8. EPF (Employee Provident Fund) Withdrawal After 5 Years. 9. Interest from NRE (Non-Resident External) Account. 10. Profit from Partnership Firm. 11. Gratuity Received by Government Employees. 12. Gratuity Received by Private Employees (Up to Rs. 20 Lakhs). 13. Interest on Sukanya Samriddhi Account. 14. Maturity of Sovereign Gold Bonds (After 8 Years). This detailed list provides valuable insights into various avenues of tax-free income available to taxpayers in India. For more informative content, follow us on Facebook, Instagram, or YouTube. For expert assistance in income tax return filing and tax planning, feel free to contact Complete Accounting Solution (CAS) using the contact information available on Google. Team CAS Kochi Dated 11th May 2024 9809604122 https://posts.gle/nhzUzu

2

The much awaited explanation for Clause 22-23 of Form 3CD is finally here. Reposting from CA. Pramod Jain’s Tax Audit Series ⬇️ #taxaudit #capramodjain

7

ITR Filing is Mandatory in below 10 Situations. 1. If your Gross total income exceeds the basic exemption limit of Rs.2,50,000/-. 2. If you have Assets outside India. 3 If you deposit more than Rs .1 crore in a bank account. 4. If you incur Rs. 2 lakh on foreign travel. 5. If your electricity Consumption is Rs. 1lakh per annum. 6. If Turnover of your business is more than Rs. 60 lakh in a year. 7. If Gross Receipt from Profession is more than Rs. 10 lakh. 8. If TDS is Rs. 25,000 or more 9. If TCS is Rs. 50,000 or more. 10. If deposit in a saving bank account is Rs.50 lakh or more. Due date for filing your ITR is 31-07-2024. #incometax #itrfiling ##directtax #charteredaccountant #ca #tax

119

10 Comments

ICAI’s Bold Steps Towards a Tech-Savvy and Sustainable Future In a world where technology and sustainability are changing everything, the The Institute of Chartered Accountants of India (ICAI) is making sure Chartered Accountants (CAs) stay ahead. ICAI President Ranjeet Kumar Agarwal recently spoke about the need to embrace AI and other new technologies. To prepare for this, ICAI is setting up nine new Centres of Excellence (CoEs) over the next three years. These centers will train their 400,000 members and 900,000 students in AI, helping them lead in a tech-driven world. They’ve also formed a new AI committee to bring AI into accounting and auditing, making their work smarter and more efficient. On top of that, ICAI is a leader in sustainability reporting. They’ve created 16 audit standards and are launching a global sustainability certificate course with partners like CPA Australia and ICAEW. This course will be available to CAs worldwide and tailored to local needs. These steps show ICAI’s commitment to preparing CAs for the future. How do you think these advancements will shape the future of accounting? #icai #charteredaccountants #ai #professionaldevelopment #innovation

42

3 Comments

📢 𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗨𝗽𝗱𝗮𝘁𝗲 𝗳𝗼𝗿 𝗚𝗦𝗧 𝗧𝗮𝘅𝗽𝗮𝘆𝗲𝗿𝘀 𝗼𝗻 𝗡𝗲𝘄 𝗙𝗼𝗿𝗺 𝗚𝗦𝗧 𝗗𝗥𝗖-𝟬𝟯𝗔 📢 GSTN has introduced Form GST DRC-03A on the GST portal, enabling taxpayers to 𝒂𝒅𝒋𝒖𝒔𝒕 𝒑𝒂𝒚𝒎𝒆𝒏𝒕𝒔 𝒎𝒂𝒅𝒆 𝒗𝒊𝒂 𝑭𝒐𝒓𝒎 𝑫𝑹𝑪-03 𝒂𝒈𝒂𝒊𝒏𝒔𝒕 𝒔𝒑𝒆𝒄𝒊𝒇𝒊𝒄 𝒅𝒆𝒎𝒂𝒏𝒅 𝒐𝒓𝒅𝒆𝒓𝒔. This form addresses previous issues where demand remained open even after payment, ensuring that payments tagged as "Voluntary" or "Others" are accurately linked to their respective demands. 🔹 𝑯𝒐𝒘 𝒊𝒕 𝑾𝒐𝒓𝒌𝒔: Enter the ARN of your DRC-03 along with the demand order number on the portal. This auto-populates relevant details, making the adjustment process straightforward and efficient. 🔹 𝑨𝒖𝒕𝒐𝒎𝒂𝒕𝒊𝒄 𝑳𝒆𝒅𝒈𝒆𝒓 𝑼𝒑𝒅𝒂𝒕𝒆𝒔: After the adjustment, entries will be updated in your liability ledger, reflecting the current status of demands. For further details, visit the GST portal or refer to the official advisory and FAQs. #GSTupdates #GSTAdvisory #Stayupdated #Taxupdates

4

Important Considerations for Filing Annual GST Returns 📌 Ensure Consistency Across Forms: For accurate reporting, values in GSTR-1, GSTR-3B, and GSTR-9 should align with the books of accounts as per Section 35 of the CGST Act. If discrepancies occur, reconciliation is essential to identify and rectify any mismatches. Remember, no new information can be introduced in the annual return; only data already filed can be consolidated and corrected as needed. 📌 Streamlined Reconciliation Process: Discrepancies between GSTR-1 and GSTR-3B may stem from underpaid or overpaid tax. Shortfalls can be disclosed and settled in the annual return, while overpaid taxes may qualify for a refund through GST RFD-01. 📌 Use System-Generated Summaries: The GST portal offers downloadable summaries of key returns, including consolidated monthly values of taxable liabilities and ITC adjustments, aiding in accurate filing and reducing the chance of departmental notices. 📌 Input Tax Credit (ITC) Compliance: ITC adjustments cannot be made in GSTR-9. If ITC reversals are needed, these should be processed through GST DRC-03. 📌 One-Time Annual Filing: The GST framework does not permit revisions to annual returns after submission. Businesses are advised to seek professional guidance to ensure accuracy before filing. #GST #GSTUPDATES #GSTANNUALRETURNS #GSTR9 #GSTR9C #GSTINDIA #GSTN

78

Classic case of shortage & excess #stock when compared with books of accounts & its treatment in #incometax, #gst & #companylaw by experts in the field. #asknexpert initiative by Karnataka State Chartered Accountants Association. Look into the snippet to know the treatment and more!

28

2 Comments

Key Changes in GSTR-9 applicable for FY 2023-24: The GSTR-9 form for FY 2023-24 is active on the GST portal, bringing some important updates to the mandatory and optional tables: Key Changes in #Mandatory and #Optional Table in #GSTR9: ➡️ Table 4: Details of All Taxable Supply: #Mandatory - Mandatory with a new Table G1 added.   - Reporting in 4I, 4J, 4K, 4L is now mandatory (was previously optional).  ➡️ Table 5: Details of All Non-Taxable Supply: - Reporting in 5H, 5I, 5J, 5K is now mandatory (was previously optional).   - Non-GST supplies (5F) must be reported separately.   - Option to either report exempted and nil-rated supplies separately or as a consolidated exempted row.  ➡️ Table 6: Break-up of ITC Availed through GSTR-3B - #Mandatory  ➡️ Table 7: ITC Reversal Details – #Optional (7A, 7B, 7C, 7D can be added in 7H).  ➡️ Table 8: ITC Reconciliation   - Now based on GSTR-2B instead of GSTR-2A.  ➡️ Table 9: GST Paid and Payable : No changes  ➡️ Tables 10-13: Adjustments for FY 2023-24 (can be reported till 30th November 2024). ➡️ Table 14: Differential Tax Paid – Mandatory (if applicable)  ➡️ Table 15: Demand & Refund – #Optional ➡️ Table 16: Purchase from Composite Taxpayers, Deemed Supply, Goods on Approval– #Optional ➡️ Table 17: HSN-wise Summary of #Outward Supplies: - Mandatory for businesses with AATO over ₹5 Crore (all supplies).   - For AATO up to ₹5 Crore, mandatory for B2B supplies only.  ➡️ Table 18: HSN-wise Summary of #Inward Supplies – #Optional  With these new requirements in place, it’s essential to review your data and prepare accordingly. Take advantage of the optional tables only where necessary to streamline your filing. File early to ensure compliance and avoid penalties! #GSTR9 #GSTUpdates #TaxFiling #TaxCompliance #Taxation #ITC #HSN

3

ICAI Introduces Transparency in Professional Fees with New Calculator The Institute of Chartered Accountants of India (ICAI) has launched a groundbreaking tool to ensure fairness and transparency in professional fees. The Minimum Recommended Professional Fee Calculator, now live on the ICAI's Tender Monitoring Directorate website, empowers Chartered Accountants (CAs) and CA firms to determine appropriate fees for their services. Based on the Revised Minimum Recommended Scale of Fees for Professional Assignments (2020), this innovative calculator considers factors like service type, complexity, and location to provide a minimum recommended fee range. This ensures consistency and transparency in fee structures, promoting professionalism and integrity in the accounting profession. Link in comment section

5

1 Comment