Statutory and Tax Audit

High-quality Audit and attestation services under statutory acts and regulations applicable in the Indian regulatory environment. Our audit approach helps an organization exercise its fiscal and compliance obligations prudently and with circumspection. Our firm's internal quality standards and Peer review approach in our audit engagements help us maintain high standards of statutory auditing services, enabling us to provide high-quality audit service giving an independent view of clients' financial statements and assertions.

Internal Audit

Our internal audit services focus on identifying and then auditing the strategic risks that can truly impact shareholder value. By thoroughly understanding each client's business, we convert information into insights to uncover hidden opportunities, which enables us to engineer the improvement of clients' efficiency. The result is an improvement in clients' performance and improved decision-making processes, ultimately leading to the strengthening of their business.

Information System Audit

Information System Audit service based on COBIT methodology, involving the evaluation of an organization and its information system according to industry benchmark requirements and practices of IT supervision and management. In addition, we also offer services regarding the evaluation of the conformity of different stages of the software development process to the standards of the development process. Our strengths in the theory and practice of information security ensure its potential to provide audit security solutions of any complexity.

Financial Due Diligence

This service is for either sellers or buyers who are contemplating investments, strategic partnerships, mergers, and acquisitions or that are looking to enhance organizational effectiveness in existing business units. Our Services include analysis and validation of critical value drivers, Key personnel Human resources, Ownership of assets & intangibles, Intellectual property, Debtor recoverability / sales profile, Completeness of creditors / supplier profiles and other financial data. We generate valuable due diligence reports and business analyses for our clients to enable accurate decision-making and prudent negotiation processes. Strict confidentiality is maintained for all engagements.

Fraud investigation, Fraud prevention, and financial forensic services

This fact-finding service includes the determination of the amount and the circumstances of a loss, analyses of evidence, and identification of possible perpetrators. In addition to investigation, we also provide Fraud prevention services, which includes risk analysis and designing of fraud prevention strategy for the client's, enabling them to prevent any future losses due to fraud.

Our firm’s philosophy is based on providing efficient auditing services in an effective manner. We employ career audit professionals who enjoy creating value for the clients and their personnel, by taking on the role of patient and compassionate fiscal educator, and by keeping communication lines open at all times. Open communication is the hallmark of our way of providing audit services. We understand the needs of our clients’ offices and the business that goes on there – and we strive to be an active and open partner. Some of the best things we hear about our auditing services are that a client office had a genuinely good time working with us and developing key relationships for the future.

Our efforts in the use of innovative technologies and adherence to an enhanced level of and quality are becoming GuideStar, the way audits are delivered. We are leaders in defining the audit of the future by pulling cutting-edge technologies, data analytics, and remote audit delivery to continuously improve audit processes and quality, streamline processes, and deliver greater results in a timely manner.

Create a sustainable IT environment

The Fin Consultancy offers premier technical consulting, cybersecurity, and compliance solutions to businesses across a variety of industries. We can help you navigate the scope and complexity of your specific audit and security assessment needs, evaluate the IT utilization level of existing infrastructure, and evaluate compliance based on your unique business goals.

The result is a sustainable IT environment that can be properly founded, implemented, and maintained now and in the future.

Financial Statement Audit Services

Understanding Audits

The audit is the highest level of assurance service performed by The Fin Consultancy and is intended to provide a user comfort on the accuracy of financial statements. We perform audit procedures to obtain “reasonable assurance” (defined as a high but not absolute level of assurance) about whether the financial statements are free from material misstatement. In an audit, we are required to obtain an understanding of an auditee’s internal control and assess fraud risk. We are also required to corroborate the amounts and disclosures included in the financial statements by obtaining audit evidence through inquiry, physical inspection, observation, third-party confirmations, examination, analytical procedures, and other procedures.

Governmental audits include financial statement audits performed under Government Auditing Standards on entities such as states and local governments, not-for-profit organizations, institutions of higher education, and certain for-profit organizations.

A Specialized Approach to Audits

Our audit approach, methodology, and deployed technologies are benchmarks within the accounting profession. We use a state-of-the-art and systematic analysis of risks specific to key business processes and cycles; we focus on areas, transactions, and events that are material to the quality and reliability of financial and compliance reporting. Key to our approach is the determination of relevant risks through a careful and diligent assessment of the industry and the operational activities that set us apart.

At The Fin Consultancy, we’ll help you achieve extraordinary success and growth by helping you build a business model on a solid foundation: a fully compliant accounting system that can pass a comprehensive audit.

Remote Audit Services - Hire Virtual Auditor

Virtual Audit Services are one of the most preferred cost-effective options without impacting the quality of controls. With the changing business setups, requirements for assurance services are also advancing. Many business entities nowadays prefer to go paperless and use clouds as their storage centers instead of traditional methods of accounts maintenance.

Here at The Fin Consultancy, we have a proficient team of professionals who are able to provide Virtual Audit Services as per required Generally Accepted Auditing Standards (GAAS), Generally Accepted Government Auditing Standards (GAGAS), Bluebook, compliances of Uniform Guidance and other State compliance. Our team has extensive cross-industry knowledge and experience and have worked on numerous audits of state and local governments, housing authorities, tribes and tribal governments, and educational entities.

Benefits of a Virtual Audit:

• Online auditing helps to streamline and maintain documentation and record control in the online environment through reoccurring scheduled reviews.

• Virtual audits provide us better flexibility to schedule fieldwork as per client’s convenience.

• Cost-effective alternative to a Physical Audit.

  
  

A wide range of remote audit services that are offered by the professionals here at The Fin Consultancy:

• Compliance Audit.

• Financial Audit.

• Construction Audit.

• Information systems Audit.

• Investigative Audit.

• Operational Audit.

• Tax Audit.

Statutory audit

A statutory audit is an independent assessment of the financial accounts of a company or institution. The purpose is to determine whether a company is providing an accurate representation of its financial situation by examining the information, such as books of account, bank balance, and financial statements.

The auditor's role is to report on whether the financial statements issued by an organization are true and fair and meet all relevant guidelines or legal requirements. This, in turn, allows companies to guard against risk and plan for the future. Statutory audits must be completed by qualified Chartered Accountants who are independent. Further, the report prepared by the Auditor on his/her findings must be presented in the format prescribed by the Regulator.

The Fin Consultancy provides audit and assurance services to various clients across India. We approach every audit with a high standard of professionalism and integrity, while working with our clients to improve their internal controls and governance and running the activity on a fully outsourced basis or working with an existing internal audit function to supplement their team when they lack adequate staff or skills.

TAX AUDIT

The Fin Consultancy is a leader in assurance, tax, transaction & advisory. Our tax practice is a long-established one with specialists across all regulations & experience with Income Tax Preparation, assessment, scrutiny & dispute cases. The professional leaders provide detailed evaluations covering tax audit workflow.

There are various laws in India that govern different kinds of audits like income tax audit, stock audit, cost audit, company or statutory audit as per company law, to name a few. Section 44AB of the Income Tax Act, 1961, lays down the provisions for income tax audit.

PROVISION RELATED TO TAX AUDIT

When the annual gross turnover or professional receipt of an assessee exceeds the limit as specified in the Income Tax Act 1961, the Income tax act makes it compulsory to conduct an audit under section 44AB of the Income Tax Act, 1961. In common parlance, such audit is referred to as “Tax audit” Income Tax Act 1961 specified requirement of audit under different sections such as:

• Audit under Section 12A (b) of Income Tax Act, 1961 in the case of charitable or religious trust of institutions.

• Tax audit under section 44 AB in the case of a person referred to in clause (b) of sub-rule (1) of rule 6G.

• Various other audit requirements are given under different sections such as Section 33AB, 35D, 33ABA, 32AB etc. for special deductions and tax holidays.

We also advise clients on how to effectively navigate the myriad of tax, and regulatory issues in cross-border transactions to help manage compliance risks and potentially enhance returns.

Our goal is to minimize your business and personal tax exposure by means of legitimate planning and keeping you aware of the changing requirements of the taxation system in India and abroad.

Importance of Tax Audit

An analysis of the accuracy of income tax returns filed in an assessment year by individuals and companies, and maintenance of records by the Chartered Accountant. Reporting of findings by the tax auditor after a detailed analysis of accuracies/inaccuracies in tax returns filed. Reporting essential details regarding compliance, tax depreciation, etc., as per the laws of income tax. This streamlines the processes for the income tax authorities in calculation and assessing the accuracy of the income tax return filed by the individual or company. Checks frauds and malpractices in filing income tax returns.

Forms Required for Tax Audit

Tax Audit reports can be presented in two different ways by tax auditors, differing on the basis of the laws under which the accounts have been audited.

• Form 3CB and Form 3CD: For tax audit reports presented under Section 44AB of the Income Tax Act, 1961, Form 3CB and the prescribed details have to be reported in Form 3CD.

• Form 3CA and Form 3CD: When a taxpayer prefers to get the accounts audited under any law other than Section 44AB, then the relevant form is Form 3CA, while the prescribed details have to be reported in Form 3CD.

Presumptive Taxation Scheme u/s 44AD of Income Tax Act, 1961

Businesses, whose annual gross turnover/receipt does not exceed the limit as prescribed by the department are eligible for this scheme. No need to maintain books of Accounts. Net income is estimated to be @ 8% of your gross receipt/turnover if received through cash and @6% if gross receipts are received through digital mode of payments. If Assessee opts for Presumptive taxation u/s 44AD, then he should follow the same section of audit for the next 5 financial years. The return of income needs to be filed in ITR 4 Form to avail this scheme.

Presumptive Taxation Scheme u/s 44ADA of Income Tax Act, 1961

Professions, whose annual gross receipt does not exceed the limit as prescribed by the department are eligible for this scheme. No need to maintain books of Accounts. Net income is estimated to be @ 50% of gross receipts. If assessee opts for Presumptive taxation u/s 44ADA, then he should follow the same section of audit for the next 5 financial years. If the assessee claimed profit less than 50%, he will be required to get his accounts audited u/s 44AB of Income Tax Act, 1961.

COMPLIANCE AUDIT

• Compliance audit is the independent assessment of whether a given subject matter is in compliance with applicable authorities identified as criteria. Compliance audits are carried out by assessing whether activities, financial transactions, and information comply in all material respects with the authorities which govern the audited entity. It is the type of audit service that mainly focuses on whether the entity is complying with local law, regulation, and related rules.

• The Fin Consultancy simplifies regulatory compliance & streamline audits through advanced compliance management & threat detection. Our professionals gain deeper insight into the enterprise’s risk posture, protect the client’s business, and comply with the regulations using advanced compliance management tooling. We inspect the source of the incident with detailed audit & compliance information for deeper insights into risk posture.

Compliance auditing may be concerned with:

• Regularity: Adherence of the subject matter to the formal criteria emanating from relevant laws, regulations, and agreements applicable to the entity.

• Propriety: Observance of the general principles governing sound financial management and the ethical conduct of public officials. While regularity is the main focus of compliance auditing, propriety is equally pertinent in the public-sector context, in which there are certain expectations concerning financial management and the conduct of officials.

PURPOSE OF COMPLIANCE AUDIT

• Compliance audit promotes transparency by providing reliable reports as to whether funds have been administered, management exercised, and citizens’ rights to due process honored as required by the applicable authorities. It promotes accountability by reporting deviations from and violations of authorities so that corrective action may be taken and those accountable may be held responsible for their actions. It promotes good governance both by identifying weaknesses and deviations from laws and regulations and by assessing propriety where there are insufficient or inadequate laws and regulations. Fraud and corruption are, by their very nature, elements that counteract transparency, accountability, and good stewardship. Compliance audit therefore also considers the risk of fraud in relation to compliance.

• The objective of compliance auditing, therefore, is to enable assessment of whether the activities of auditable entities are in accordance with the authorities governing those entities to express a conclusion designed to enhance the degree of confidence of the intended users.

Perspectives of Compliance Audit

• Compliance audits can be part of a combined audit that may also include other aspects. Though other possibilities exist, compliance auditing is generally conducted either:

  • In relation with the audit of financial statements, or

  • Separately as individual compliance audits, or

  • In combination with performance auditing.

Types of Compliance Review

In general, the compliance audit performs its audit against certain requirements as follows:

• Local law and regulation.

• Business-related regulation and framework.

• Entity’s policy, procedure, and processes.

Compliance Audit in relation with the audit of Financial Statements

• The legislature, as an element of the public democratic process, establishes the priorities for public-sector income and expenditure and for the calculation and attribution of expenditure and income. The underlying premises of legislative bodies and the decisions they take are the source of the authorities governing cash flow in the public sector. Compliance with those authorities constitutes a broader perspective alongside the audit of financial statements in budgetary execution.

• Laws and regulations are important both in compliance auditing and in the audit of financial statements. Which laws and regulations apply in each field will depend on the audit objectives. Compliance audit focuses on obtaining sufficient and appropriate evidence regarding the compliance of a given subject matter with applicable authorities identified as criteria. Whereas, in the audit of financial statements, only those laws and regulations with a direct and material effect on the financial statement are relevant, in compliance with auditing any law and regulation relevant to the subject matter may be relevant for audit.

• Auditors shall follow up instances of non-compliance when appropriate. A follow-up process facilitates the effective implementation of corrective action and provides useful feedback to the audited entity, the users of the audit report, and the auditor (for future audit planning). The need to follow up on previously reported instances of non-compliance will vary with the nature of the subject matter, the non-compliance identified, and the particular circumstances of the audit.

DUE DILIGENCE REVIEW & AUDIT

• Due diligence is an investigation, audit, or review performed to confirm the facts of a matter under consideration. In the financial world, due diligence requires an examination of financial records before entering into a proposed transaction with another party. The theory behind due diligence holds that performing this type of investigation contributes significantly to informed decision making by enhancing the amount and quality of information available to decision-makers and by ensuring that this information is systematically used to deliberate in a reflexive manner on the decision at hand and all its costs, benefits, and risks.

Areas of due diligence process (framework)

There are several types of DDR, which are as listed below:

1. Business/Market Due Diligence.

2. Technical Due Diligence.

3. Human Resource Due Diligence.

4. Legal Due Diligence.

5. Environment Due Diligence.

6. System Due Diligence.

7. Tax Due Diligence.

8. Financial & Accounting Due Diligence.

Due Diligence Methodology

• Methodology of DDR will depend upon the needs of the client, nature of review and time available. Hence, in any DDR, we follow the steps listed below:

  • Understand the needs of the client and decide the scope and objective accordingly;

  • Preparation of a list of information to be obtained from the client, which is necessary for carrying out DDR;

  • Periodically hold review meetings with the team to ascertain the status of the DDR and further actions to be taken.

Risk Management

• The auditors carrying out DDR are exposed to inherent risk and have to face financial indemnification of the consequential loss if any. To mitigate the risk involved, the following should be ensured:

  • Proper understanding of the objective of the assignment before accepting the assignment and deciding the scope.

  • Review of other DDR reports, collect the copy of the same from the client and hold meetings with the other reviewers.

  • Disclose the scope and limitations of the assignment in the DDR Report.

The Fin Consultancy, provide our clients with proper guidance to mitigate the risk involved and ensuring risk management in an efficient and best possible manner. If you are looking for corporate due diligence services, then our competent professionals guide our client’s on due diligence to optimize its objectives.

COST AUDIT AND COMPLIANCE REPORT

With an ever-increasing need for determining the accurate cost particulars of a product to arrive at the correct profitability, meeting the compliance requirements prescribed under the Companies Act has become equally important. The Fin Consultancy, with a dedicated and qualified team to handle the Cost Audit and related Compliances, we offer our professional assistance with regard to the following:

• Cost Audit to ascertain the accuracy of the cost accounting records to ensure that the same are in conformity with Cost Accounting Principles, plans, procedures, and objective;

• Maintenance of Cost Records in terms of Companies (Cost Records and Audit) Rules, 2014;

• Internal Audit, Operational Audit and Management Audit as per the specific needs of the management;

• Cost Study and Analysis in order to determine the specific elements of cost associated with a brand, product, pack, customer, channel, or region and analyzing the same to arrive at the desired results;

• Stock valuation as per the prescribed methods and regulations under the CAS-4;

• Transfer pricing CAS-4 Certificate for captive consumption;

• XBRL filing of Cost Audit Report;

• Determining the costing of product, channel, or brand to meet the specific management decision-making requirement of the Company;

• Budgeting and MIS;

• Management Consultancy Services.

We also advise clients on how to effectively navigate the myriad of tax and regulatory issues in cross-border transactions to help manage compliance risks and potentially enhance returns.

Our goal is to minimize your business and personal tax exposure by means of legitimate planning and keeping you aware of the changing requirements of the taxation system in India and abroad.

Types of Cost Audit

• Efficiency Audit – It is directed towards the measurement of whether corporate plans have been effectively executed. It is concerned with the utilization of resources in an economical and most remunerative manner to achieve the objectives of the concern.

• Propriety Audit - The propriety Audit is concerned with executive actions and plans bearing on the finance and expenditure of the company. The auditor has to judge whether the planned expenditure is designed to give optimum results.

• Statutory Audit- It is the compulsory audit that required maintaining the related books and accounts of specified establishments. The chief aims of this type of audit are that the government wants to ascertain the relationship between costs and prices.

Benefits of Cost Audit

• To Management

  • Cost audit helps in the detection of errors and frauds.

  • The management gets correct and reliable data based on which they can make day-to-day decisions like price fixation.

  • It helps in cost control and cost reduction.

  • It assists the system of standard costing and budgetary control.

  • It helps the management in inter-unit/firm comparison.

  • It enables the management to identify loss-making propositions.

• To Shareholders

  • Cost audit reveals whether any of the products of the company are making losses. Thus though the company making an overall profit a loss-making line may eat up the company’s profits. This is brought to the notice of the shareholders and the management is forced to take remedial measures, thereby making optimum utilization of resources.

  • Cost audit ensures that the shareholders get a reasonable return on their investments.

• To Government

  • It helps in the identification of sick units and enables the Government to make significant decisions.

  • It helps in fixing prices in the case of essential commodities and checking undue profiteering.

  • It enables to take decisions as to granting of subsidies, incentives and safeguard to various industries.

  • It helps to take decisions as to levies, duties, and taxes.

• To the Society

  • Cost audit enables the Government to fix prices of essential commodities. This protects the interests of society.

  • Cost audit enables the Government to keep a check on undue profiteering by the manufacturers and avoids non-natural price rise due to monopolistic tendencies.

STOCK AUDIT

• Stock audit, in general usage, is considered an important auditing term which refers to the physical verification of the inventory. However, at times, it may also involve the valuation of the inventory but it would depend on the terms of reference or the engagement letter of the assignment. It is the process of examining financial records with physical inventory and other records.

In other words, a stock audit is a statutory process that every business institution needs to perform at least once in a financial year. As far as the stock audit process is concerned, the process mainly involves the counting of physical stock presenting the specified premises and verifying the same with computed stock maintained by the company. The reason and purpose behind executing this are to correct the discrepancies present in the book stock when compared to physical stock by passing necessary adjustment entries.

IMPORTANCE OF STOCK AUDIT

• Observation of inventory is a generally accepted auditing procedure, where an independent auditor issues an opinion on whether the financial records of inventory accurately represent the actual inventory being carried.

• Auditing inventory is an important aspect of gathering evidence, especially for manufacturing or retail-based businesses. It can represent a large balance of assets or capital.

• Auditing inventory must verify not only the amount of inventory but also its quality and condition to see whether the value of the inventory is fairly represented in financial records and statements.

Stock Audit Procedures

• ABC Analysis – Grouping different value and volume inventory.

• Analytical Procedures - Analyzing inventory based on financial metrics such as gross margins, days inventory on hand, inventory turnover ratio, and costs of inventory historically.

• Cut-off Analysis - Pausing operations such as receiving and shipping of inventory while making a physical count to avoid mistakes.

• Finished Goods Cost Analysis - Applies to manufacturers and includes valuing finished inventory during an accounting period.

• Freight Cost Analysis - Determining the shipping or freight costs for transporting inventory to different locations.

• Overhead Analysis - Analyzing the indirect costs of the business and overhead costs that may be included in the costs of inventory. Rent, utilities, and other costs can be recorded as part of inventory costs in some cases.

• Matching – Matching the number of items & cost of inventory shipped with financial records.

• Reconciliation – Solving discrepancies found in stock audit.

Reasons to look forward to Stock Audit

• To update the opening stock details.

• To identify the discrepancy between book stocks also known as computed stock and physical stock.

• To update the actual physical stock as book stock.

• To ensure proper preservation and handling of stocks.

The Fin Consultancy offers reliable stock audit services to companies and organizations with a dedication and aim to help them safeguard and monitor their physical assets and inventories. Our dedicated team of professionals is focused on Stock Audit services to companies to keep them assured of their inventories & physical assets.

Key Benefits of Stock Audit

• Direct impact on costs and the bottom line.

• Prevent pilferage and fraud.

• Identifies slow-moving stock, obsolete stock, dead stock, and scrap.

• Third-party independent opinion, especially for agent warehouses.

• Identifies gaps in the current inventory management process.

• Enables accurate valuation of inventory.