SHRI ONKARMAL SOMANI COLLEGE OF COMMERCE

PROJECT REPORT ON CHARTERED ACCOUNTANTS2013-2014 SUBMITTED BY: KHEMCHAND DEVNANI B.B.A. V SEMACKOWLEDGEMENT

Our personality are based on the foundation of education imparted by one teacher who are next to god.I wish to Mr. Ajay Chordia (designation) Proprietor of A.Chordia & Co. Chartered accountants for giving me this opportunity to do y dissertation with A.Chordia & Co. I also wish to acknowledge him for his continous and unmatched guidance till the completion of the training period.I also express my gratitude towards staff of A.Chordia & Co. for providing me valuable inputs, supervision and cooperation throughout the period of my research project, which helped me in successful completion of my project. I express my gratitude to Shri Onkarmal Somani College Of Commerce for providing me with this opportunity and constant guidance.

Khemchand Devnani B.B.A V Semester

CONTENTS.NoParticularsPage

1INTRODUCTION2-5

2BRIEF HISTORY OF ACCOUNTING IN INDIA6-7

3FIRM PROFILE8-14

4TYPES OF AUDIT REPORT14-23

5TAX PLANNING24-27

6ACCOUNTING STANDARDS28-29

7AUDITING AND ASSURANCE STANDARDS30-33

8RESEARCH METHODOLOGY34-46

10BIBLIOGRAPHY47

11QUESTIONNAIRE 48

IntroductionMore in this section1. Job description 2. Salary and conditions 3. Entry requirements 4. Training 5. Career development 6. Employers and vacancy 7. Related jobs Print all pages in this sectionCase studies Chartered accountant: Kate BakerFeatured advertisementThere's no denying a career in business is competitive. That's why ICAEW train chartered accountants to have the skills and work experience the business world demands. Becoming 'chartered' is your way into a successful and lucrative career full of global opportunities. Find out how to qualify with ICAEW.

Chartered accountants provide trustworthy information about financial records. This might involve them in financial reporting, taxation, auditing, forensic accounting, corporate finance, business recovery and insolvency, or accounting systems and processes. Generally, they play a strategic role by providing professional advice, aiming to maximise profitability on behalf of their client or employer. They work in many different settings including public practice firms, industry and commerce, as well as in the not-for-profit and public sectors.In public practice firms, chartered accountants provide professional services to fee-paying clients who might be private individuals or large commercial or public sector organisations. In commerce, industry and the not-for-profit and public sectors, they may work in treasury management, procurement, financial management or in reporting roles.With the rapid growth in economy, careers in finance and accounts have gained tremendous popularity and the most prestigious career option in this filed is that of Chartered Accountant. Chartered Accountancy is a dynamic, challenging and rewarding profession. All the countries have their own Accountancy Association which regulates the quality and quantity of the professionals in this field. Chartered Accountancy Course is a professional course in Accounting introduced in our country in 1949, with the enactment of the Chartered Accountants Act. The Institute of Chartered Accountants of India (ICAI) was formed the same year . This Institute is both an examining and a licensing body. It is the responsibility of the institute to conduct the Chartered accountancy (CA) Course. The course involves a blend of theoretical education and practical training which run concurrently for a period of three years and equips a student with knowledge, ability, skills and other qualities required of a professional accountant. A Chartered accountant is one who is specialised in accounting, auditing and taxation. He also serves as a management and corporate caretaker. In recent times, accountancy has become popular as a profession. The services of a CA is required in money matters even in a small business . Moreover according to the Company Act only CA's in professional practice are allowed to be appointed as auditors of companies in India. A chartered accountant is a person who is accepted as a member of the Institute of Chartered Accountants of India (ICAI) after having passed the Final examination of the Chartered accountancy course conducted by the institute.

Many multinational companies have come forward in the Chartered Accountancy field. ICICI Prudential, Om Kotak Mahindra, Birla Sun-Life, Tata AIF Life, Reliance, HDFC Standard Life-Chartered Accountancy Co., Max New York Life, SBI Life Chartered Accountancy, ING Vysya Life etc. are the top companies in the private sector. In non-life Chartered Accountancy segment, major private players are ICICI Lombard, Royal Sundaram, Cholamandalam, IFFCO Tokyo, Tata AIG etc. All Chartered Accountancy companies come under the Chartered Accountancy Regulatory and Development Authority (IRDA) which is established to regulate, promote and ensure orderly growth of Life and General Chartered Accountancy industry in India. CA programme is a professional course which has three sections namely, Common Proficiency Test (CPT); Integrated Professional Competence Course (IPCC) and Final Course. The registration for CPT and IPCC is open throughout the year. A student may register at any time during the year. However, as the examinations will be held twice a year in May and November, it is necessary that a student must register at least ten months before the examinations. After passing the Integrated Professional Competence Course (IPCC) candidates are eligible for registration as articled clerks/ audit clerks for practical training. Computer Training Programme, ie 100 hours Information Technology is compulsory for the candidates who wish to register themselves as auditor clerk. Students can undergo this programme while pursuing CPT or IPCC.Articled clerk is a trainee attached to a practicing chartered accountant under a Deed of Articles for the duration three years. During this period the articled clerk will also need to continue studies for the CA exam. An audit clerk is a person who has served as a salaried employee for a minimum period of one year under a practicing chartered accountant. During the training period, candidates would be required to work in different areas learning the basics of auditing and taxation . This training enables them to learn the technical details of the job as well as to get an idea of the working environment of the profession.The scope for this lucrative career is bright in an economically developing nation like ours and as such the career can be termed as challenging and rewarding for competent professionals in the field.

A Brief History Of Accounting In India

1857The first ever Companies Act in India legislated.

1866Law relating to maintenance of accounts and audit thereof introduced.

Formal qualification as auditor now required.

1913New Companies Act enacted.

Books of accounts to be maintained specified.

Formal qualification to act as auditor named. A Certificate from the local government to be held in order to act as auditor. An unrestricted Certificate entitled a person to act as auditor throughout British India. A Restricted Certificate entitled him to act as auditor only within the Province concerned and in the languages specified in the certificate.

1918Government Diploma in Accounting (GDA) launched in Bombay. On completion of articleship of three years under an approved accountant and passing the Qualifying Examination the candidate would become eligible for the grant of an Unrestricted Certificate.

1920 The issue of Restricted Certificates discontinued.

1927Society of Auditors founded in Madras.

1930Register of Accountants (RA) to be maintained by the Government of India to exercise control over the members in practice. Those whose names found entry here were called Registered Accountants (RA).

1930The Governor General in Council replaced the local government as the statutory authority to grant certificates to persons entitling them to act as auditors.

Auditors allowed to practice throughout India.

1932First Accountancy Board formed. The Board was to advise the Governor General in Council on matters relating to accountancy and to assist him in maintaining standards of qualification and conduct required of auditors.

1933First examination held by the Indian Accountancy Board. GDAs exempted from taking the test.

1935The first Final Examination was held. GDAs exempted from taking the test.

1943GDA abolished.

1948Expert Committee formed to examine the scheme of an autonomous association of accountants in India.

1949The Chartered Accountants Act, 1949 was passed on 1st May. The term Chartered Accountant came to be used in place of Indian Registered Accountants.

Chartered Accountants Act was brought into effect on 1st July. The Institute of Chartered Accountants of India is born.

1999ICAI completed 50 years on 1st July 1999.

Firm Profile

Services Provided

AUDIT

The firm has vast & varied experience in conducting all types of Audits for large & medium sized business entities including Audit of Public Sector Undertakings. The firm also has the expertise to prepare financial statements in accordance with International Accounting Standards (IAS)

The various types of audits conducted by the firm are : Statutory Audit of Companies Audit of Partnerships, schools, Societies etc. Internal Audit and Management Audit. Tax Audit under the Income Tax Act. Proprietary Audit Stock Audit Revenue Audit

TAXATION

Direct Taxation: Tax Planing, Corporate, Non-corporate, Individuals Tax Audits Tax Representation Appellate and legal mattersIndirect Taxation: Planning Assistance in documentation Tax Audits & periodical Audits Consultancy and Representation. Appellate and legal matters

COMPANY LAW MATTERS

Company Incorporation and secretarial services Amalgamation and Mergers Takeovers Consultancy & Representation Appellate and legal matters

OUTSOURCINGOur Outsource Accounting Services Division offers individuals and businesses of all sizes a full range of service options to complement and complete your internal accounting and administration needs. You can avail the services of a full-blown accounting department by outsourcing these services through A.Chordia & Co..

The effective and efficient use of manpower is a major element for achieving success. Company after company has come to the realization that investing in and maintaining large-scale in-house departments may not make business sense for rapidly growing companies. Relying upon an external organization to supply critical support services will provide your company with access to a wealth of intellectual capital without the necessity of investing in infrastructure.The bottom line: You concentrate on your core competency while we devote all of our energies and resources to take care of your non-core functions - efficiently and cost effectively.

We evaluate the accounting needs of new and growing businesses and offer complete solutions for the most efficient and effective operation of an accounting and record-keeping system. Our goal is to develop a system that will meet the financial reporting requirements of your company. Whether your business requires assistance with periodic bookkeeping or implementation of a fully computerized accounting system, we maximize your existing resources to provide the best solutions.

As a provider of financial services in the world of outsourcing, we can provide you with financial reporting, general ledger accounting, consolidations, budgeting, management reporting, billing, accounts payable / accounts receivable, expense reporting etc.

Corporate FinanceCorporate Finance is a long-term business strategy, characterised by extensive lead-time before deals are finalised. Locating the time and cost effective sources of finance for your project is our strength. Be it Equipment Finance, Short or Long Term Funds, Trade Finance, Structured Finance or any other product, our team studies the options available, then sources the most beneficial route for our clients. From Capital Structuring to Feasibility Studies to Project Appraisal to sourcing funds, we take care of entire transaction. Our knowledge of the current investment scenario and understanding of specific needs, enable us to deliver cost competitive solutions.

Advisory ServicesWith the entry of MNC's and globalisation of Indian economy, restructuring of organisations through Mergers and Joint Ventures are the strategies for survival. To seek and identify a sound business partner, suggest economically viable projects and arrange technical and financial collaborations are our core competency.We arrange technical and financial collaboration, assist in the preparation of necessary project documentation and get statutory approval required for the project.

SERVICES TO NON-RESIDENTSWe offer Non-Resident Indians as well as foreign national a complete range of services.We assist Non-Residents in managing their Investment Portfolio, Tax Returns, getting RBI clearances or complying with statutory obligations? We offer you a range of services which include the following : Tax Advisory Services. Investment Advisory. Manage and maintain your accounts in India - you can be updated on a daily basis. Prepare and file your Income Tax Returns. Comply with RBI rules and regulations. Other Customized Solutions. We offer a complete range of service from the simple task of depositing your interest/dividend warrants in your account to preparing your accounts, filing tax returns and obtaining permission/clearances, advice on your investments and portfolio advisory services. All this is done by keeping you well informed on a daily basis through the Internet.In short, you are in control of your activities in India without having to be here. Receive statements, reports, accounts and any other information daily.

Financial ReportingThe Financial Reporting will provide you with instant access to your accounting records. You can inspect individual account detail and view scanned images of original support documents. We can also provide you with trial balances, general ledgers and cash flow reports that are updated daily. The reports are in electronic form so that you can view them on-screen or print them out. In addition, we can customize reports to help you run your business more effectively.

Simplify your accounting today!Now with Financial Outsource Services, you can make those critical, day-to-day decisions with timely, accurate and easy-to-understand financial information. You'll also enjoy a greater sense of control and security by having your accounting data reviewed by a trusted third party. And finally, you can have it all for a fraction of the cost of maintaining an in-house accounting staff.

Why Outsource From Us Major costs savings Trained, highly Qualified staff at your disposal anytime you need Your work is completed and is available to you the first thing in the morning. You pay only for actual work done

SETING UP OF OPERATIONS We assist foreign companies to setup businesses in India by not only advising them about the foreign investment policy & procedures of the government of India but also obtain all necessary approvals etc.

The services rendered in this area include the following : Identifying investment opportunities and businesses/projects Company information including all other registrations like income tax, sales tax, vat etc. Assistance in all agreements & contracts Obtaining all approvals & clearances from Reserve Bank of India, Foreign Investment Promotion Board (FIPB) & other Government Departments. Setting up the organisation structure specially with respect to accounting systems etc. We provide valuable inputs on the most tax friendly options while conceptualizing the business / investment strategy.We also provide our expert advice on all other investment opportunities in India like investment in real estate, capital

RISK CONSULTING Fraud Risk Management Sarbanes-Oxley Compliance Enterprise Risk Management Information Technology Audit Information Security Procedures Internal Audit Corporate Governance Consulting Standard Operating Procedures/Manuals

CORPORATE ADVISORY SERVICES

Merger & Acquisitions Corporate Finance Advisory Divestiture Advisory Financial Restructuring Private Placements and Capital Raising Recapitalisations Structuring of Management BuyoutsDue Diligence Acquisition Strategy Deal Structuring Foreign GAAP Conversions IT Compatibility Reviews Negotiation Strategy Advisement Post-Merger Integration Services Tax Consulting

Valuation Services Equity Incentive Valuations Intangible Asset Impairment Studies Purchase Price Allocation Studies Shareholder/Corporate Planning Stock Redemptions Transfer Pricing Studies

Auditors report on financial statementsIt is important to note that auditor's reports on financial statements are neither evaluations nor any other similar determination used to evaluate entities in order to make a decision. The report is only an opinion on whether the information presented is correct and free from material misstatements, whereas all other determinations are left for the user to decide.Types Of Audit Report Unqualified OpinionAn opinion is said to be unqualified when the Auditor concludes that the Financial Statements give a true and fair view in accordance with the financial reporting framework used for the preparation and presentation of the Financial Statements. An Auditor gives a Clean opinion of Unqualified Opinion when he or she does not have any significant reservation in respect of matters contained in the Financial Statements. The most frequent type of report is referred to as the Unqualified Opinion, and is regarded by many as the equivalent of a clean bill of health to a patientwhich has led many to call it the Clean Opinion, but in reality it is not a clean bill of health. This type of report is issued by an auditor when the financial statements presented are free of material misstatements and are represented fairly in accordance with the Generally Accepted Accounting Principles (GAAP), which in other words means that the companys financial condition, position, and operations are fairly presented in the financial statements. It is the best type of report an auditee may receive from an external auditor.

An Unqualified Opinion indicates the following 1. The Financial Statements have been prepared using the Generally Accepted Accounting Principles which have been consistently applied;

2. The Financial Statements comply with relevant statutory requirements and regulations;

3. There is adequate disclosure of all material matters relevant to the proper presentation of the financial information subject to statutory requirements, where applicable;

4. Any changes in the accounting principles or in the method of their application and the effects thereof have been properly determined and disclosed in the Financial Statements.

5. The report consists of a title and header, a main body, the auditors signature and address, and the reports issuance date. US auditing standards require that the title includes "independent" to convey to the user that the report was unbiased in all respects. Traditionally, the main body of the unqualified report consists of three main paragraphs, each with distinct standard wording and individual purpose, however certain auditors (including PricewaterhouseCoopers) have since modified the arrangement of the main body (but not the wording) in order to differentiate themselves from other audit firms.

6. The first paragraph (commonly referred to as the introductory paragraph) states the audit work performed and identifies the responsibilities of the auditor and the auditee in relation to the financial statements. The second paragraph (commonly referred to as the scope paragraph) details the scope of audit work, provides a general description of the nature of the work, examples of procedures performed, and any limitations the audit faced based on the nature of the work. This paragraph also states that the audit was performed in accordance with the countrys prevailing generally accepted auditing standards and regulations. The third paragraph (commonly referred to as the opinion paragraph) simply states the auditors opinion on the financial statements and whether they are in accordance with generally accepted accounting principles

Qualified Opinion reportA Qualified Opinion report is issued when the auditor encountered one of two types of situations which do not comply with generally accepted accounting principles, however the rest of the financial statements are fairly presented. This type of opinion is very similar to an unqualified or clean opinion, but the report states that the financial statements are fairly presented with a certain exception which is otherwise misstated. The two types of situations which would cause an auditor to issue this opinion over the Unqualified opinion are:Single deviation from GAAP this type of qualification occurs when one or more areas of the financial statements do not conform with GAAP (e.g. are misstated), but do not affect the rest of the financial statements from being fairly presented when taken as a whole. Examples of this include a company dedicated to a retail business that did not correctly calculate the depreciation expense of its building. Even if this expense is considered material, since the rest of the financial statements do conform with GAAP, then the auditor qualifies the opinion by describing the depreciation misstatement in the report and continues to issue a clean opinion on the rest of the financial statements.

Limitation of scope - this type of qualification occurs when the auditor could not audit one or more areas of the financial statements, and although they could not be verified, the rest of the financial statements were audited and they conform GAAP. Examples of this include an auditor not being able to observe and test a companys inventory of goods. If the auditor audited the rest of the financial statements and is reasonably sure that they conform with GAAP, then the auditor simply states that the financial statements are fairly presented, with the exception of the inventory which could not be audited.The wording of the qualified report is very similar to the Unqualified opinion, but an explanatory paragraph is added to explain the reasons for the qualification after the scope paragraph but before the opinion paragraph. The introductory paragraph is left exactly the same as in the unqualified opinion, while the scope and the opinion paragraphs receive a slight modification in line with the qualification in the explanatory paragraph.The scope paragraph is edited to include the following phrase in the first sentence, so that the user may be immediately aware of the qualification. This placement also informs the user that, except for the qualification, the rest of the audit was performed without qualifications:Except as discussed in the following paragraph, we conducted our audit...The opinion paragraph is also edited to include an additional phrase in the first sentence, so that the user is reminded that the auditors opinion explicitly excludes the qualification expressed. Depending on the type of qualification, the phrase is edited to either state the qualification and the adjustments needed to correct it, or state the scope limitation and that adjustments could have but not necessarily been required in order to correct it.For a qualification arising from a deviation from GAAP, the following phrase is added to the opinion paragraph, using the depreciation example mentioned above:In our opinion, except for the effects of the Companys incorrect determination of depreciation expense, the financial statement referred to in the first paragraph presents fairly, in all material respects, the financial position ofFor a qualification arising from a scope of limitation, the following phrase is added to the opinion paragraph, using the inventory example mentioned above:In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to perform proper tests and procedures on the Companys inventory, the financial statement referred to in the first paragraph presents fairly, in all material respects, the financial position ofDue to the phrases added to the scope and opinion paragraphs, many refer to this report as the Except-For Opinion.

Adverse Opinion reportAn Adverse Opinion is issued when the auditor determines that the financial statements of an auditee are materially misstated and, when considered as a whole, do not conform with GAAP. It is considered the opposite of an unqualified or clean opinion, essentially stating that the information contained is materially incorrect, unreliable, and inaccurate in order to assess the auditees financial position and results of operations. Investors, lending institutions, and governments very rarely accept an auditees financial statements if the auditor issued an adverse opinion, and usually request the auditee to correct the financial statements and obtain another audit report.Generally, an adverse opinion is only given if the financial statements pervasively differ from GAAP. An example of such a situation would be failure of a company to consolidate a material subsidiary.The wording of the adverse report is similar to the qualified report. The scope paragraph is modified accordingly and an explanatory paragraph is added to explain the reason for the adverse opinion after the scope paragraph but before the opinion paragraph. However, the most significant change in the adverse report from the qualified report is in the opinion paragraph, where the auditor clearly states that the financial statements are not in accordance with GAAP, which means that they, as a whole, are unreliable, inaccurate, and do not present a fair view of the auditees position and operations.

Disclaimer of Opinion reportA Disclaimer of Opinion, commonly referred to simply as a Disclaimer, is issued when the auditor could not form, and consequently refuses to present, an opinion on the financial statements. This type of report is issued when the auditor tried to audit an entity but could not complete the work due to various reasons and does not issue an opinion. The disclaimer of opinion report can be traced back to 1949, when the Statement on Auditing Procedure No. 23: Recommendation Made To Clarify Accountants Representations When Opinion Is Not Expressed was published in order to provide guidance to auditors in presenting a disclaimer.[Statements on Auditing Standards (SAS) provide certain situations where a disclaimer of opinion may be appropriate: A lack of independence, or material conflict(s) of interest, exist between the auditor and the auditee (SAS No. 26) There are significant scope limitations, whether intentional or not, which hinder the auditors work in obtaining evidence and performing procedures (SAS No. 58); There is a substantial doubt about the auditees ability to continue as a going concern or, in other words, continue operating (SAS No. 59) There are significant uncertainties within the auditee (SAS No. 79).Although this type of opinion is rarely used, the most common examples where disclaimers are issued include audits where the auditee willfully hides or refuses to provide evidence and information to the auditor in significant areas of the financial statements, where the auditee is facing significant legal and litigation issues in which the outcome is uncertain (usually government investigations), and where the auditee has going concern issues (the auditee may not continue operating in the near future). Investors, lending institutions, and governments typically reject an auditees financial statements if the auditor disclaimed an opinion, and will request the auditee to correct the situations the auditor mentioned and obtain another audit report.A disclaimer of opinion differs substantially from the rest of the auditors reports because it provides very little information regarding the audit itself, and includes an explanatory paragraph stating the reasons for the disclaimer. Although the report still contains the letterhead, the auditees name and address, the auditors signature and address, and the reports issuance date, every other paragraph is modified extensively, and the scope paragraph is entirely omitted since the auditor is basically stating that an audit could not be realized.In the introductory paragraph, the first phrase changes from We have audited to We were engaged to audit in order to let the user know that the auditee commissioned an audit, but does not mention that the auditor necessarily completed the audit. Additionally, since the audit was not completely and/or adequately performed, the auditor refuses to accept any responsibility by omitting the last sentence of the paragraph. The scope paragraph is omitted in its entirety since, effectively, no audit was performed. Similar to the qualified and the adverse opinions, the auditor must briefly discuss the situations for the disclaimer in an explanatory paragraph. Finally, the opinion paragraph changes completely, stating that an opinion could not be formed and is not expressed because of the situations mentioned in the previous paragraphsInternal auditInternal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Internal auditing is a catalyst for improving an organizations effectiveness and efficiency by providing insight and recommendations based on analyses and assessments of data and business processes. With commitment to integrity and accountability, internal auditing provides value to governing bodies and senior management as an objective source of independent advice. Professionals called internal auditors are employed by organizations to perform the internal auditing activity.The scope of internal auditing within an organization is broad and may involve topics such as the efficacy of operations, the reliability of financial reporting, deterring and investigating fraud, safeguarding assets, and compliance with laws and regulations.Internal auditing frequently involves measuring compliance with the entity's policies and procedures. However, internal auditors are not responsible for the execution of company activities; they advise management and the Board of Directors (or similar oversight body) regarding how to better execute their responsibilities. As a result of their broad scope of involvement, internal auditors may have a variety of higher educational and professional backgrounds.Publicly-traded corporations typically have an internal auditing department, led by a Chief Audit Executive ("CAE") who generally reports to the Audit Committee of the Board of Directors, with administrative reporting to the Chief Executive Officer.Nature of the internal audit activityBased on a risk assessment of the organization, internal auditors, management and oversight Boards determine where to focus internal auditing efforts (the focus prioritization is part of the annual/multi-year audit planning; usually, the audit plan is proposed by the Chief Internal Audit (sometimes with several options or alternatives) to the approval of the Audit Committee or Board of Directors). Internal auditing activity is generally conducted as one or more discrete assignments. A typical internal audit assignment involves the following steps:1. Establish and communicate the scope and objectives for the audit to appropriate management.2. Develop an understanding of the business area under review. This includes objectives, measurements, and key transaction types. This involves review of documents and interviews. Flowcharts and narratives may be created if necessary.3. Describe the key risks facing the business activities within the scope of the audit.4. Identify control procedures used to ensure each key risk and transaction type is properly controlled and monitored.5. Develop and execute a risk-based sampling and testing approach to determine whether the most important controls are operating as intended.6. Report problems identified and negotiate action plans with management to address the problems.7. Follow-up on reported findings at appropriate intervals. Internal audit departments maintain a follow-up database for this purpose.Audit assignment length varies based on the complexity of the activity being audited and Internal Audit resources available. Many of the above steps are iterative and may not all occur in the sequence indicated.By analyzing and recommending business improvements in critical areas, auditors help the organization meet its objectives. In addition to assessing business processes, specialists called Information Technology (IT) Auditors review information technology controls.

Reporting of critical findingsThe Chief Audit Executive (CAE) typically reports the most critical issues to the Audit Committee quarterly, along with management's progress towards resolving them. Critical issues typically have a reasonable likelihood of causing substantial financial or reputational damage to the company. For particularly complex issues, the responsible manager may participate in the discussion. Such reporting is critical to ensure the function is respected, that the proper "tone at the top" exists in the organization, and to expedite resolution of such issues. It is a matter of considerable judgment to select appropriate issues for the Audit Committee's attention and to describe them in the proper context.

Tax PlanningTax planning is a broad term that is used to describe the processes utilized by individuals and businesses to pay the taxes due to local, state, and federal tax agencies. The process includes such elements as managing tax implications, understanding what type of expenses are tax deductible under current regulations, and in general planning for taxes in a manner that ensures the amount of tax due will be paid in a timely manner. One of the main focuses of tax planning is to apply current tax laws to the revenue that is received during a given tax period. The revenue may come from any revenue producing mechanism that is currently in operation for the entity concerned. For individuals, this can mean income sources such as interest accrued on bank accounts, salaries, wages and tips, bonuses, investment profits, and other sources of income as currently defined by law. Businesses will consider revenue generated from sales to customers, stock and bond issues, interest bearing bank accounts, and any other income source that is currently considered taxable by the appropriate tax agencies. In many cases, a primary goal of tax planning is to apply current laws in a manner that allows the individual or business to reduce the amount of taxable income for the period. Thus, planning for taxes involves knowing which types of income currently qualify for as exempt from taxation. The process also involves understanding what types of expenses may be legitimately considered as deductions, and what circumstances have to exist in order for the deduction to be claimed on the tax return. There are three common approaches to tax planning for the purpose of minimizing the tax burden. The first is to reduce the adjusted gross income for the tax period. This is where understanding current tax laws as they relate to allowances and exemptions come into play. A second approach to tax planning is to increase the amount of tax deductions. Again, this means knowing current laws and applying them when appropriate to all usual and normal expenses associated with the household or the business. Since these can change from one annual period to the next, it is always a good idea to check current regulations. One final approach that may be applicable to effective tax planning has to do with the use of tax credits. This can include credits that relate to retirement savings plans, college expenses, adopting children, and several other credits. One common example of a tax credit is the Earned Income Credit, which is intended to relieve the tax burden for persons who earn less than a certain amount within a given calendar year.

Tax Planning StrategiesTax planning strategies range from the very simple to the excruciatingly complex, but they all have one thing in common: they seek to minimize your overall tax bill. There are dozens of means available to help you accomplish this goal, from gray areas to loopholes to income shifting to tax deferral. Most sound strategies use a combination of methods to keep income taxes to a bare minimum.There are two major ways to cut down your tax bill: reduce your taxable income, or reduce your tax rate. You can lower your taxable income by taking full advantage of allowable deductions, especially those that are deductible to businesses but not to individual taxpayers (company cars, for instance). While you can't literally reduce your tax rate, you can do things that have the same effect, such as shifting income to the entity that will pay the lowest tax rate, or taking steps to minimize income that would be subject to self-employment tax in addition to income tax.

Loans and LeasesSome of the neatest tricks for getting money out of your business without incurring either double taxation or self-employment tax include loans and leases. While these two items may seem to have nothing in common, they do share one important factor: you need a legally binding contract to really make them work and to keep them from being reclassified by the IRS.Loans are a great way to get money out of the company, whichever way the money goes initially. When you want to put money into the company without changing your equity standing, you can give it a loan and take back payments. This is especially beneficial with C corporations, where you can't get equity contributions back without invoking taxable dividends. If you need a lump sum of cash from the company coffers, treating it as a loan won't set off any tax liability. The key is to have a written legal loan agreement in place, and that has to include:

Date of the loan Original loan amount Interest Payment scheduleYes, your loan has to include interest, at the current going rate. When you don't charge interest, the IRS will, and in that case you'll have to pay tax on that interest income even if you never actually got it.Don't confuse tax avoidance with tax evasion. Tax avoidance involves using 100 percent legal means to reduce your tax bill, which is something you have every right to do. Tax evasion, on the other hand, employs illegal methods to get out of paying taxes.Leases allow you to rent property to your company. That rental income will be taxable but won't be subject to double taxation or self-employment tax. Any form of rent expense is deductible to the company. However, you cannot use this in connection with a home office.

Get the Family InvolvedWhen it comes to income shifting, paying family members in the lower tax brackets can be an excellent way to go. Get your kids involved in the business, and give them paychecks. This gives a beneficial twist to just doling out allowances: your kids have some job responsibility, and your company gets an expense deduction.In order for this plan to work, your kids have to actually work for the business in an age-appropriate capacity. You can hire your five-year-old to sweep up, your ten-year-old to do the filing, and your fifteen-year-old to work the register. Once they're employees, you can even include them in your company's retirement plan.

Accounting standards

Accounting Standards Specified By The Institute Of Chartered Accountants of India under Section 211 of The Companies Act, 1956AS 1Disclosure of Accounting Principles

AS 2Valuation of Inventories

AS 3Cash Flow Statements

AS 4Contingencies and Events Occurring After the Balance Sheet Date

AS 5Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies

AS 6Depreciation Accounting

AS 7 (Revised)Construction Contracts

AS 8Accounting for Research and Development

AS 9Revenue Recognition

AS 10Accounting for Fixed Assets

AS 11 (Revised 2003)The Effects Of Changes In Foreign Exchange Rates

AS 12Accounting for Government Grants

AS 13Accounting for Investments

AS 14Accounting for Amalgamations

AS 15(Revised 2005)Employee Benefits [click here for related announcement]

AS 16Borrowing Costs

AS 17Segment Reporting

AS 18Related Party Disclosures

AS 19Leases

AS 20Earnings Per Share

AS 21Consolidated Financial Statements

AS 22Accounting for taxes on income

AS 23Accounting for Investments in Associates in Consolidated Financial Statements

AS 24Discontinuing Operations

AS 25Interim Financial Reporting

AS 26Intangible Assets

AS 27Financial Reporting of Interests in Joint Ventures

AS 28Impairment of Assets

AS 29Provisions, Contingent Liabilities and Contingent Assets

AS 30Financial Instruments: Recognition and Measurement

AS 31Financial Instruments: Presentation

AS 32Financial Instruments: Disclosures

Auditing And Assurance Standards

200-299 General Principles And Responsibilities SA 200 (Revised) issued under the Clarity Project, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing SA 210 (Revised) under the Clarity Project, Agreeing the Terms of Audit Engagements SA 220 (Revised)issued under the Clarity Project , Quality Control for an Audit of Financial Statements SA 230 (Revised) under the Clarity Project, Audit Documentation SA 240 (Revised) under the Clarity Project, The Auditors Responsibilities Relating to Fraud in an Audit of Financial Statements SA 250 (Revised) under the Clarity Project, Consideration of Laws and Regulations in an Audit of Financial Statements SA 260 (Revised) under the Clarity Project, Communication with Those Charged with Governance SA 265 issued under the Clarity Project, Communicating Deficiencies in Internal Control to Those Charged With Governance and Management SA 299 (AAS 12), Responsibility of Joint Auditors

300-499 Risk Assessment And Response To Assessed Risks SA 300 (Revised) under the Clarity Project, Planning an Audit of Financial Statements SA 315 under the Clarity Project, Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment SA 320 (Revised) issued under the Clarity Project, Materiality in Planning and Performing an Audit SA 330 under the Clarity Project, The Auditors Responses to Assessed Risks SA 402 (Revised) issued under the Clarity Project, Audit Considerations Relating to an Entity Using a Service Organisation SA 450 issued under the Clarity Project, Evaluation of Misstatements Identified During the Audit

500-599 Audit Evidence SA 500 (Revised) under the Clarity Project, Audit Evidence SA 501 (Revised)issued under the Clarity Project, Audit EvidenceSpecific Considerations for Selected Items SA 505 (Revised) issued under the Clarity Project, External Confirmations SA 510 (Revised) under the Clarity Project, Initial Audit Engagements Opening Balances SA 520 (Revised) issued under the Clarity Project, Analytical Procedures SA 530 (Revised) under the Clarity Project, Audit Sampling SA 540 (Revised) under the Clarity Project, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures SA 550 (Revised) under the Clarity Project, Related Parties SA 560 (Revised) under the Clarity Project, Subsequent Events SA 570 (Revised) under the Clarity Project, Going Concern SA 580 under the Clarity Project, Written Representations

600-699 Using Work of Others SA 600 (AAS 10), Using the Work of Another Auditor SA 610 (Revised) issued under the Clarity Project, Using The Work of Internal Auditors SA 620 (Revised) issued under the Clarity Project, Using the Work of an Auditors Expert

700-799 Audit Conclusions and Reporting SA 700 (Revised) issued under the Clarity Project, Forming an Opinion and Reporting on Financial Statements SA 705 issued under the Clarity Project, Modifications to the Opinion in the Independent Auditors Report" SA 706 issued under the Clarity Project, Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditors Report" SA 710 (Revised) issued under the Clarity Project, Comparative InformationCorresponding Figures and Comparative Financial Statements SA 720 under the Clarity Project, The Auditors Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements

800-899 Specialized Areas SA 800 issued under the Clarity Project, Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks SA 805 issued under the Clarity Project, Special ConsiderationsAudits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement SA 810 issued under the Clarity Project, Engagements to Report on Summary Financial Statements

2000-2699 Standards On Review Engagements (Sres) SRE 2400 (Revised), Engagements to Review Financial Statements SRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity Assurance Engagements Other Than Audits or Reviews of Historical Financial Information 3000-3699 Standards on Assurance Engagements (SAEs) 3000-3399 Applicable to All Assurance Engagements 3400-3699 Subject Specific Standards SAE 3400 (AAS 35), The Examination of Prospective Financial Information SAE 3402, Assurance Reports on Controls At a Service Organisation

RESEARCH METHODOLOGYWhat is Research Methodology?Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research methods/techniques but also the methodology. Researchers not only need to know how to develop certain indices or tests, how to calculate the mean, the mode, the median or the standard deviation or chi-square, how to apply particular research techniques, but they also need to know which of these methods or techniques, are relevant and which are not, and what would they mean and indicate and why. Researchers also need to understand the assumptions underlying various techniques and they need to know the criteria by which they can decide that certain techniques and procedures will be applicable to certain problems and others will not. All this means that it is necessary for the researcher to design his methodology for his problem as the same may differ from problem to problem. For example, an architect, who designs a building, has to consciously evaluate the basis of his decisions, i.e., he has to evaluate why and on what basis he selects particular size, number and location of doors, windows and ventilators, uses particular materials and not others and the like. Similarly, in research the scientist has to expose the research decisions to evaluation before they are implemented. He has to specify very clearly and precisely what decisions he selects and why he selects them so that they can be evaluated by others also.The system of collecting data for research projects is known as research methodology. The data may be collected for either theoretical or practical research for example management research may be strategically conceptualized along with operational planning methods and change management. Some important factors in research methodology include validity of research data, Ethics and the reliability of measures most of your work is finished by the time you finish the analysis of your data.

Formulating of research questions along with sampling weather probable or non probable is followed by measurement that includes surveys and scaling. This is followed by research design, which may be either experimental or quasi-experimental. The last two stages are data analysis and finally writing the research paper, which is organised carefully into graphs and tables so that only important relevant data is shown. Types Of Research Methods1. Qualitative1. Quantitaive1. Mixed1. Critical and action orientedData CollectionData collection depends on the research design (quantitative or qualitative design). Tutors India helps in a survey tool validation and also online and face to face data collection process. We help you to conduct surveys [in person Interviews: Formal to informal; structured to unstructured; focus group discussion, observations, self-administered questionnaire, diaries, citizen report cards, Delphi techniques, expert judgement, online surveys, secondary sources such as journals, newspaper articles, annual reports, government sources such as census, budgets, policies, procedures, etc.

COLLECTION OF DATAPrimary data can be collected either through experiment or through survey. If the researcher conducts an experiment, he observes some quantitative measurements, or the data, with the help of which he examines the truth contained in his hypothesis. But in the case of a survey, data can be collected by any one or more of the following ways:(i) By observation: This method implies the collection of information by way of investigators own observation, without interviewing the respondents. The information obtained relates to what is currently happening and is not complicated by either the past behaviour or future intentions or attitudes of respondents. This method is no doubt an expensive method and the information provided by this method is also very limited. As such this method is not suitable in inquiries where large samples are concerned.

(ii) Through personal interview: The investigator follows a rigid procedure and seeks answers to a set of pre-conceived questions through personal interviews. This method of collecting data is usually carried out in a structured way where output depends upon the ability of the interviewer to a large extent.

(iii) Through telephone interviews: This method of collecting information involves contacting the respondents on telephone itself. This is not a very widely used method but it plays an important role in industrial surveys in developed regions, particularly, when the survey has to be accomplished in a very limited time.

(iv) By mailing of questionnaires: The researcher and the respondents do come in contact with each other if this method of survey is adopted. Questionnaires are mailed to the respondents with a request to return after completing the same. It is the most extensively used method in various economic and business surveys. Before applying this method, usually a Pilot Study for testing the questionnaire is conduced which reveals the weaknesses, if any, of the questionnaire. Questionnaire to be used must be prepared very carefully so that it may prove to be effective in collecting the relevant information.

(v) Through schedules: Under this method the enumerators are appointed and given training. They are provided with schedules containing relevant questions. These enumerators go to respondents with these schedules. Data are collected by filling up the schedules by enumerators on the basis of replies given by respondents. Much depends upon the capability of enumerators so far as this method is concerned. Some occasional field checks on the work of the enumerators may ensure sincere work.

OBJECTIVES OF ACCOUNTINGTo keep systematic records:

Accounting is done to keep a systematic record of financial transactions. In the absence of accounting there would have been terrific burden on human memory which in most cases would have been impossible to bear.

To protect business properties:

Accounting provides protection to business properties from unjustified and unwarranted us. This is possible on account of accounting supplying the information to the manager or the proprietor.

To ascertain the operational profit or loss:

Accounting helps is ascertaining the net profit earned or loss suffered on account of carrying the business. This is done by keeping a proper record of revenues and expenses of a particular period. The profit and loss account is prepared at the end of a period and if the amount of revenue for the period is more than the expenditure incurred in earning that revenue, there is said to be a profit. In case the expenditure exceeds the revenue, there is said to be a loss.

To ascertain the financial position of business:

The profit and loss account gives the amount of profit or loss made by the business during a particular period. However, it is not enough. The businessman must know about his financial position i.e., where he stands; what he owes and what he owns? This objective is served by the balance sheet or position statement.

To facilitate rational decision making:

Accounting these days has taken upon itself the task of collection, analysis and reporting of information at the required points of time to the required levels of authority in order to facilitate rational decision making.

LIMITATIONS OF AUDITING Even though audit program has number of advantages, it is not free from limitations. Some of the major disadvantages of audit program are as follows:

1. Audit Program Harasses To StaffsAll the staffs should perform task within the limitation given in audit program. So, staffs can not use their knowledge and caliber which harasses to them.

2. Possibility OF Being UnsuitableNature and size of business differs. So, the program which is prepared at the beginning of the year remains unsuitable. Different organizations may have their own problems. So, similar type of program may not be applicable to all.

3. Audit Program Increases The Chance Of FraudStaffs of the client get information about the audit program in advance which increases the chance of committing frauds. Similarly, it harasses the audit staffs so they perform the work of audit carelessly which also increases the chance of committing frauds.

4. Audit Program Is Unsuitable To Small ConcernSmall concern has less transactions and work of audit can be completed in short period of time. So, audit program is not essential to audit such concern.

5. Exclusion Of Problems Of New TechnologyNew techniques and technologies are used in the work of accounting. Such technology creates the problem in the work of audit but such problems and remedial measures are not included in the audit program.

LIMITATIONS OF ACCOUNTINGI. Accounting is only one source of information and primarily provides information based on financial terms: Although this information is vital, decisions cannot be based solely on a monetary basis. Various decisions depend upon a diverse range of issues being considered. A unique combination of Quantitative as well as Qualitative factors should be considered to ensure an effective decision making process.

II. The historical perspective of financial accounting: In order to obtain a recent estimate of an entitys financial performance, the corporate managers carefully scrutinize financial accounting information. In retrospect, this information is based on past performance. The information does provide clarity on the monetary issues but does not provide a definite insight into the strategic future; as the future holds various changes in terms of technology, economic situations as well as political scenarios etc. Such factors in relation to accounting are unpredictable. Therefore, a careful balance between historical accounting as well as the future forecasted outlook is required.

III. Historical cost accounting vs. underlying value in use: Some items loose their monetary value over a period of time, but under the financial accounting rules need to be included in financial reports. Though mentioned year after year in the books as monetary figures, the information may be unreliable due to the historical assumptions made on the items measurability criterion. For example, a machine in a textile factory is considered to have a useful life which extends over a period of ten years in monetary terms; however, after the period of ten years, the machine may still have the same value as prior years and contribute significantly to the overall operability of the factory.

IV. Inability to reflect the true value of strategic management: Various factors such as goodwill and natural circumstances influence the operations of an enterprise; however, these elements are difficult to measure thus, leading to their unavoidable exclusion from financial reports. For example companies depend upon their shareholders, who in turn depend on the performance of the Chief Executive Officers. Although the CEOs may have been hired by the company based upon prior performance, their future performances are not reliably measurable as they may continually vary. In the initial stages, it may be impossible to measure whether the CEOs presence will deter or appeal to the shareholders, which in turn will influence the profitability of the enterprise.

V. Measuring Volatility of external factors: Financial accounting information does not take into consideration volatile and ever increasing changes in the natural and commercial environment. Although scarcely measurable in monetary terms, their unstable nature may have adverse effects if included within the financial reports and have a volatile and cosmetic impact upon the earnings of the firm. For example, tariffs on trade, duties and other environmental issues can have significant short-term volatile effects on the organisation.

VI. The effect of non-stable monetary unit: Based from region to region, accounting information is generated at all enterprises based on the assumption that the monetary unit is stable over a period of time. In the real world scenario, the unit fluctuates on a daily basis. Enterprises usually decide on a flat rate to calculate their financing and investing needs. However, this can have adverse impacts which cannot be communicated to shareholders, if the unit has high fluctuations.

DATA ANALYSIS

After the data have been collected, the researcher turns to the task of analyzing them. The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, tabulation and then drawing statistical inferences. The unwieldy data should necessarily be condensed into a few manageable groups and tables for further analysis. Thus, researcher should classify the raw data into some purposeful and usable categories. Coding operation is usually done at this stage through which the categories of data are transformed into symbols that may be tabulated and counted. Editing is the procedure that improves the quality of the data for coding. With coding the stage is ready for tabulation.

Tabulation is a part of the technical procedure wherein the classified data are put in the form of tables. The mechanical devices can be made use of at this juncture. A great deal of data, specially in large inquiries, is tabulated by computers. Computers not only save time but also make it possible to study large number of variables affecting a problem simultaneously.

Analysis work after tabulation is generally based on the computation of various percentages, coefficients, etc., by applying various well defined statistical formulae. In the process of analysis, relationships or differences supporting or conflicting with original or new hypotheses should be subjected to tests of significance to determine with what validity data can be said to indicate any conclusion(s).For instance, if there are two samples of weekly wages, each sample being drawn from factories in different parts of the same city, giving two different mean values, then our problem may be whether the two mean values are significantly different or the difference is just a matter of chance. Through the use of statistical tests we can establish whether such a difference is a real one or is the result of random fluctuations. If the difference happens to be real, the inference will be that the two samples come from different universes and if the difference is due to chance, the conclusion would be that the two samples belong to the same universe. Similarly, the technique of analysis of variance can help us in analysing whether three or more varieties of seeds grown on certain fields yield significantly different results or not. In brief, the researcher can analyse the collected data with the help of various statistical measures. A brief snapshot of entire research methodology is as follows:Research type: Descriptive research

Research design: Qualitative research and Quantitative research

Sample size: 50 Clients

Area of research: Jodhpur

Tools for measurement: Closed end questionnaire

Scope after becoming a Chartered Accountant? Join a job Own practice Family business Tution services.

Criteria for giving rating to effective accountant? Good communication skills Good working skills Good personality

Criteria for success of an Chartered Accountant? Age above 24 Married Living in the same city for more than five years

Are Chartered Accountants the best in the field of Commerce? Yes No

Give Rank to different works performed by Chartered Accountants? Taxation Accounting Return filing Advisory services

Clients who will continue to avail services of the firm Yes No Maybe

BIBLIOGRAPHY

Books1.Study material issued by The Institute Of chatered accountants of india.2.Taxman Publications.3.D.S Rawat Accounting Standards.

Websitewww.icai.org.inwww.taxman.comgoogle search engine (www.google.com)

QUESTIONNAIRE

Name : ..Designation : Company : Q1. Clients who will continue to avail services of the firm Yes No MaybeQ2. Basic criteria for success of an Chartered Accountant? Age above 24 Married Living in the same city for more than five yearsQ3. Give Rank to different works performed by Chartered Accountants? Taxation Accounting Return filing Advisory servicesQ4. Scope after becoming a Chartered Accountant? Join a job Own practice Family business Tution services.

Q5. Criteria for giving rating to effective accountant? Good communication skills Good working skills Good personalityQ6. Are Chartered Accountants the best in the field of Commerce? Yes NoQ7. Clients willing to do Chartered Accountancy Course? Yes No MaybeQ8. Best place to set up Office of a Chartered Accountant? In the middle of the city In Noise free places In the industrial Area AnywhereQ9. How Many Chartered Accountants have you approached before us? None One to two More than three