+ Is statutory Audit compulsory?
In term of section 139(1) of the Companies Act, 2013 read with rule 3 of Companies (Audit and Auditors) Rules, 2014 every company shall appoint an individual or a firm as an auditor.
Section 139(6) of the Act stipulated that the first Auditor of the Company shall be appointed within 30 days of its date of registration.
+ Is Audit under Income Tax Act mandatory?
As per Section 44AB of the Income Tax Act, 1961, certain persons carrying on business or profession have to get their books of accounts audited by a practicing Chartered Accountant.
In case of business, if the total sales, turnover or gross receipts, as the case may be, exceed or exceeds 1 Crore Rupees in any previous year and
In case of profession, if the gross receipts in profession exceed Rs.50 lakh Rupees in any previous year are compulsorily required to get their books of accounts audited by a Chartered Accountant.
This apart, under certain circumstances, even if the turnover is less than the limits specified above, books of accounts have to be audited by a CA.
The applicable entities have to get their accounts audited by a Chartered Accountant before the specified date and furnish the report of such audit.
+ Is IFRS applicable to private companies?
IFRS refers to International Financial Reporting Standards which are applied while preparing the financial statements of the company. Different countries have different accounting standards. In order to remove the discrepancy in Accounting across the Globe, countries world over decided to adopt uniform standards called IFRS.
In India, IND AS (Indian Standard converged with IFRS) has been introduced in 2014. The applicability of IND AS to companies is as under –
- Listed and Unlisted companies with net worth in excess of Rs.500 Crore (w.e.f. 1st April 2016) and holding, subsidiary or associate and JV of the above companies.
- Listed (irrespective of the turnover) and Unlisted companies (private limited and closely held public companies) with net worth in excess of Rs.250 Crores (w.e.f. 1st April 2017) and holding, subsidiary or associate and JV of the above companies (irrespective of the turnover)
Once the company starts following IND AS, it shall be required to follow for the subsequent financial statements even if any of the criteria specified above does not subsequently apply to it.
+ What is ICDS? For whom it is applicable?
ICDS refers to Income Computation and Disclosure Standards. The Central Government has notified ten ICDS applicable with effect from Assessment Year 2017-18 for the purpose of computation of Income under the head “Profits and gains of business or profession” and “Income from other Sources”
ICDS is applicable to all taxpayers, irrespective of turnover, including firms, AOP, Resident or Non-Residents, etc.,) who have income from business or profession or Income from other sources.