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Internship Report

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Table of Content
Executive Summery Acknowledgement Dedication Introduction to report Company Profile Vision Statement Mission Statement Management Hierarchy Departments of MTM Area of Internship Work Done During Internship Accomplishment Duties & Responsibility Rights as Internee New Knowledge Acquired SWOT Analysis Recommendations Conclusion Bibliography Glossary Annexure 3 4 5 6-7 8-20 21 22 23-24 25-39 40 41-46 47 48 49 50 51-53 54-55 56 57 58-59 60 34

Executive summary The purpose of this report is to give the detailed information about M.A Chaudhari & Co. that is an Auditing firm providing the different services such as the Tax consultancy, corporate 2 |P a g e PUGC

Internship Report consultancy, Audit and other consultancy such as feasibility studies and foreign study consultancy. To complete this documentation I personally work with the company for one month, learn the so many things and collect the information about the company and its working. We work on companys different departments like Tax Department Audit Department and Corporate consultancy department. I have chosen the M.A Chaudhari & Co for my internship because it is among the leading Auditing firms of Gujranwala and I want to continue my learning at well-reputed organization, which would be productive, both for the organization and me as well. In this document we give detailed working of each department. In Auditing Department we learn how the actual audit is performed and how the different financials such as the Annual reports, projected reports and the spread is prepared for the different companies. We conduct different techniques to analyze the company environment (internal and external). We also conduct SWOT analysis of M.A Chaudhari & Co. which details is attached in with this report. We meet Mr. Safyan Mehmood the Audit Manager of the company and we ask questions to him about the operations of the firm and also meet Mr. Khurram Mumtaz who is the corporate consultant of the firm and collect many information from him about corporate consultancy and regarding our report. Mr. Safyan Mehmood assigns us the different tasks such as the preparation of the financials and gives us the opportunity to participate in audit of different organization. By participating in the audit of different organizations we check the detail of different accounts and physical checking of the inventory and get the information about the different aspects of conducting audit. At the end of this report we analyze the flaws of each department and also give our recommendations to improve management and the working of the organization.

Acknowledgement 3 |P a g e PUGC

Internship Report

In the name of thy Lord who created, man from clot. Thy Lord is the most Bounteous who taught man that he knew nothing. Above all we are indebted to almighty ALLAH, Lord of our lives and of everything in the universe and his Holly Prophet (P.B.U.H) whose blessing enabled us to perceive life. By the grace of Allah Almighty we have been able to complete our work. We would like to thank The Commerce Department for giving us the opportunity and providing us with a platform to prove our mettle. We would particularly like to thank our Supervising Members and other members who have patiently and incessantly guided us in completing this task. Their collateral assistance helped us realize and achieve what we initially aimed at. Finally, we would specially like to thank our families and friends who were always there when we needed them and also were never around when we did not need them! This report would not have been possible without them. We also offer heartiest thanks to all the persons who guided us and encouraged to complete this tough task successfully.

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To Almighty Allah who has created us as crown of creation and enable us to learn. We dedicate this report to our parents who always appreciate us in every step and to our teachers who help us at all stages of study.

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Introduction Origen of the report: After completing the degree, the University requires that each student would do the internship in corporate sector for gaining the real market knowledge. So after completing my four year bachelor in commerce, I was looking for the organization for the purpose of internship and for gaining the practical experience. After consulting my elders, seniors and with my own thinking I decided to do internship in audit firm instead of any bank or any manufacturing organization because in audit firm I can get the real practical experience and knowledge related to my interest. .For this purpose I have chosen M.A Chaudhari & Co. (Chartered Accountants) Gujranwala branch. They required a recommendation letter from the University and CV. M.A Chaudhari & Co the audit firm is one of the biggest firms of Gujranwala and has so many very clients in Gujranwala and other cities also. M.A Chaudhari & Co has a very good reputation because of their work. Clients of M.A Chaudhari & Co are very satisfied from the firm work. With this company I tried to implement educational experience in this company. Auditing section of CA firm support me to do audit in different type of organization and share with me their experiences. This research report is the reflection of my working experience at this company and summary of my responsibilities that had been bestowed on me. Scope: I audited different types of company through this CA firm. I had scope to learn about the groups activities while I came into contact with different departments. I had opportunity to inform about the audited companys performance and financial condition. Objective: CA firm evaluate and verify all the financial and non-financial activity of its client company and give them valuation report after the end of evaluation for the fairness of the company which is most important document for a company. I was worked with this Audit group and perform my job according to the rule. Following are the objectives that I have in my mind before working as an internee in M.A Chaudhari & Company (Chartered Accountant firm). 6 |P a g e PUGC

Internship Report To improve communication skills. To analyze the business situation. To learn about the internal and external audit. To make quick decision in real situation. To establish high standard of professionalism. To learn more the theoretical knowledge. To learn book keeping practices of different companies. To apply theoretical knowledge in actual organization. To improve the interpersonal skills. To compare the practical aspect with theoretical aspect. To learn how to promote and to conduct research in business areas. To learn about the research methodology in terms of intangible product. To learn about the organizational structure in place in Pakistan companies. To promote my personal knowledge and professional preparation for future. To properly integrate my theoretical knowledge and practical work. To learn how to adjust in an organization. To know how to present your recommendations in front of your senior. To exposure to do a work in an organization and also know about organizational behavior, ethics and regulations. Methodology: I prepared this report in two segments. In my first part I explained about the M.A Chaudahry & Company and in second part I focused on the Work done during internship. I had to collect data for analyzing Audit process. I had to rely on Audit Report of the client companies for regression analysis. Secondly, I talked with officials to know about the Audit process. Limitations: There were few limitations in preparing this report. CA firm is working for other company and they are concern about any information confidential and sensitive to them. I have to submit an

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Internship Report application to my firm supervisor Mr. Safyan, CA for his prior consent in getting information but I was able collect only few data but those are important and enough for this report. Organization profile M.A Chaudhari & Co. is a fast growing, dynamic network of independent professional accounting firms and business advisers. Formed in 1982, M.A Chaudhari & Co ranks in the top in Gujranwala accounting networks, servicing clients through its member firms in different cities of Pakistan. We know that the history of M.A Chaudhari & Co. is very old which start from 1982. Mubarak Ali Chaudhari is the father of M.A Chaudhari & Co. He passed his C.A in 1988 and then he get the certificate of an audit firm from ICAP and start business in Gujranwala. He built up a good name in this field. He is very hardworking person and a very good reputation in business world of Gujranwala and so many other cities. Time to time he tried to expand their business from Gujranwala to other cities and open more offices in other cities like in Lahore and Rawalpindi but the Gujranwala office is the main and head office off all offices which is situated in Trust Plaza Gujranwala. The firm is poised to deliver value added prompt professional services to their valued clientele with strong professional team lead by its Partners and professional staff with country wide reach through its offices in Gujranwala, Lahore and Rawalpindi. The list of firm clients to whom professional services are being provided currently or in the past includes Financial Institutions, Non Banking Financial Institutions, Manufacturing and Servicing Companies, State owned Corporations, Multinational and National Public and Listed Companies. M.A Chaudhari & Co. provides industry-focused services for public and private clients in order to build public trust and enhance value through the application of what we call Linked Ideas. Our service culture combined with our cumulative knowledge culminates into innovative solutions to help promote the growth of our clients business. Before rendering innovative advice we minutely ensure that all the legal and ethical obligations are respected. This is what we call Innovative Solutions.

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Nature of the organization: M.A Chaudhari & Co. endeavor to elevating finance and accounting outsourcing from transaction processing to the level of a true business transformation to provide auditing, accounting, taxation, management consultancy and other consultancy services. It is sensitive to selecting a firm to entrust your accounting, financial, financial services, and business development coaching and mentoring needs is an important decision requiring great care and forethought. Rapid economic changes and increases in competitive pressures magnify the significance of the decision as every business, organization and individual must make the very most of their valuable resources. It can provide its clients with valuable information to help you make the right decisions with tools such as benchmarking, cash flow, forecasting, payroll and much more. Clients of M.A Chaudhari & Co: In Gujranwala M.A CHAUDHARY & CO is working as market leader, it has more than 70 clients in different sectors. Client portfolio comprises of large as well as medium to small-sized organizations in the public and private sectors. M.A Chaudhari has serviced clients in the following sectors:

Agriculture Automobile Cement Electrical Goods Power Engineering HealthCare Hospitality Mineral Mining Oil & Gas PUGC

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Textile Tobacco Utility Companies

As Gujranwala is a rural urban area so clients of M.A Chaudhari & Co are not very big firms but it has more clients as compared to other audit firms operating in Gujranwala. Actually M.A Chaudhari & Co is an audit firm which provides the financial help and service to their clients which registered in ICAP. M.A Chaudhari & Co. has a very big business volume because of long history and a great goodwill. Mubarak Ali Chaudhari is a very hardworking person which built up a good name in his field and has so many high clients like, Coca Cola Co. Pak Pipe Co. Pak pipes steel industry Master Tiles Super Asia Pioneer industry Climax Asia Fan Faisal Industry Golden Pumps Gujrat Chamber of commerce Different Schools Hospitals

And so many others, all clients of M.A Chaudhari & Co are very satisfied from the work of it. The market share of M.A Chaudhari & Co is so high. Mubarak Ali Chaudhari running his business in three cities Gujranwala, Lahore and Rawalpindi and planning to expand further more. In Gujranwala he has his own building the worth of Rs 80,00,000 but in Lahore and Rawalpindi the offices is in rental buildings. M.A Ch. has purchased Cars for his employs, which they use when go outside the firm for the purpose of audit. 10 |P a g e PUGC

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Major Competitors: There are not so many competitors of M.A Chaudhari & Co in Gujranwala. There are three main competitors of M.A Chaudhari & Co in Gujranwala which are as follows 1. Iyaz saeed & Co. which started their business since 7 years and not a very big competitor of M.A Chaudhari & Co. 2. The second competitor of M.A Chaudhari & Co is Ch. Shafaqat Ali & Co. Which started their business from 3 years which also not a very shocking competitor of M.A Chaudhari & Co. 3. And the third one competitor of M.A Chaudhari & Co. is Waqas & Co. which started their business in Gujranwala from 8 years. Comparison Competitors: No doubt M.A Chaudhari & Co is best from their all competitor in all aspects. M.A Chaudhari & Co. is very old firm and has a very great goodwill and then I come to know that more people rely and feel confident on it. There are so many aspects which made M.A Chaudhari & Co. best from their competitors and some of these are as follows. Old history Good reputation People confident Clients priority Employs seniority Confidential Employs loyalty High market share

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Internship Report Business explorer High clients like coca cola, master tile, super Asia and Gujarat Chamber of commerce.

Audit Audits are performed to ascertain the validity and reliability of information; also to provide an assessment of a system's internal control. The goal of an audit is to express an opinion on the person / organization / system (etc.) in question, under evaluation based on work done on a test basis. Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements - a concept influenced by both quantitative (numerical) and qualitative factors. Auditing is a vital part of accounting. Traditionally, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business (see financial audit). However, recent auditing has begun to include non-financial subject areas, such as safety, security, information systems performance, and environmental concerns. With nonprofit organizations and government agencies, there has been an increasing need for performance audits, examining their success in satisfying mission objectives. As a result, there are now audit professionals who specialize in security audits, information systems audits, and environmental audits. In financial accounting, an audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. It is performed by competent,

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Internship Report independent and objective person(s) known as auditors or accountants, who then issue an auditor's report based on the results of the audit. In cost accounting, it is a process for verifying the cost of manufacturing or producing of any article, on the basis of accounts measuring the use of material, labor or other items of cost. In simple words the term, cost audit, means a systematic and accurate verification of the cost accounts and records, and checking for adherence to the cost accounting objectives. According to the Institute of Cost and Management Accountants of Pakistan, a cost audit is "an examination of cost accounting records and verification of facts to ascertain that the cost of the product has been arrived at, in accordance with principles of cost accounting." Types of auditors: Auditors of financial statements can be classified into two categories: 1. External auditor / Statutory auditor : External auditor / Statutory auditor is an independent Public accounting firm engaged by the client subject to the audit, to express an opinion on whether the company's financial statements are free of material misstatements, whether due to fraud or error. For publiclytraded companies, external auditors may also be required to express an opinion over the effectiveness of internal controls over financial reporting. External auditors may also be engaged to perform other agreed-upon procedures, related or unrelated to financial statements. Most importantly, external auditors, though engaged and paid by the company being audited, are regarded as independent auditors.

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Internship Report The most used external audit standards are the US GAAS of the American Institute of Certified Public Accountants; and the ISA International Standards on Auditing developed by the International Auditing and Assurance Standards Board of the International Federation of Accountants. 2. Internal auditor: Internal auditors are employed by the organization they audit. They perform various audit procedures, primarily related to procedures over the effectiveness of the company's internal controls over financial reporting. Due to the requirement of Section 404 of the Sarbanes Oxley Act of 2002 for management to also assess the effectiveness of their internal controls over financial reporting (as also required of the external auditor), internal auditors are utilized to make this assessment. Though internal auditors are not considered independent of the company they perform audit procedures for, internal auditors of publicly-traded companies are required to report directly to the board of directors, or a sub-committee of the board of directors, and not to management, so to reduce the risk that internal auditors will be pressured to produce favorable assessments. The most used Internal Audit standards are those of the Institute of Internal Auditors.

Objectives and advantages of Audit: The objectives of an audit may broadly be classified as; 1. Primary Objectives 2. Secondary objectives. Primary Objectives: The main purpose of audit is to judge the reliability of the financial statements and the supporting accounting records for a particular financial period. The Companies Act, 1956 requires that the auditor of a company has to state whether in his opinion the accounts disclose a true and fair view of the state of company's affairs, profit and Loss Account and Balance Sheet of the state of affairs of a business, the auditor carries out a process of examination and verification of books of accounts and relevant documents. Such an examination will enable the auditor to report to his client on the financial condition and working results of the organization. While carrying out the examination of the various books of accounts, relevant documents and 14 |P a g e PUGC

Internship Report evidences, the auditor may came across certain errors and frauds. Despite such a possibility the detecting of errors and frauds is an incidental object. However, laymen have always associated the detection of errors and frauds as the main function of an auditor which is not true. At the same time audit also discloses how far the accounting system adopted in the organization is adequate and appropriate in recording the various transactions as well as the weakness of these systems.

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Internship Report Secondary Objectives: As stated above, an auditor has to examine the books of accounts and the relevant documents in order to report on the financial condition of the business. In the process of such an investigation of accounts certain errors and frauds may be detected. These are discussed under the following two heads: Detection and Prevention of Errors Detection and Prevention of Frauds Detection and prevention of Errors:

Various types of errors are mentioned below: 1. Clerical Errors: Such an error arises on account of wrong posting. For example, an amount received from Thomas is credited to Sunny. Though there is wrong posting still the trial balance will agree. Clerical errors are of three types as follows: i) Errors of Commission: There errors are caused due to wrong posting either wholly or partially of the amount in the books of original entry or ledger accounts or wrong calculations, wrong totaling, wrong balancing, and wrong casting of subsidiary books. For example Rs. 500 is paid to a vendor and the same is recorded in the cash book. While posting to the ledger, the Vendor's account is debited by Rs. 500. It may be due to carelessness of the clerk. Most of the errors of commission are reflected in the trial balance and these can be discovered by routine checking of the books. ii) Errors of Omission: Such errors arise when the transactions are not recorded in the books of original entry or posted to the ledger. For example, sales are note recorded in the sales book or omission to enter invoices in the purchase book. For example Rs. 200 is paid to a vendor. The entry in the cash book is made on the credit side but posting to the vendor side is omitted. Errors due to entire omission will not affect the trial balance whereas errors due to partial omission will affect the trial balance and can be detected. iii) Compensating Errors: When two or more errors are committed in such a way that the result of these errors on the debits and credits is nil, they are referred to as a compensating errors. For example, Anil's account which was to be debited for Rs. 500 was credited for Rs. 500 and similarly, Sunil's account which was to be credited for Rs. 500 was debited for Rs.500. These two mistakes will nullify the effect of each other. Both the sides of the

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Internship Report trial balance are equally affected. As such, these errors are difficult to locate unless detailed investigation is undertaken. 2. Errors of Principle: Such errors are committed when some fundamental principle of accounting is not properly observed in recording transaction. For example, if there is incorrect allocation of expenditure or receipt between capital and revenue or when closing stock is overvalued. Though trial balance will not disagree, the Profit and Loss Account may be very much affected. Sometimes, such errors are committed deliberately to falsify the accounts or unintentionally due to lack of knowledge or sound principles of accounting. Thus, a thorough examination is to be done to locate such errors. Detection and Prevention of Frauds:

Frauds are always committed deliberately and intentionally to defraud the proprietors of the organization. If the frauds remain undetected, they may affect the opinion of the auditor on the financial condition and the working results of the organization. It is, therefore, necessary that the auditor should exercise utmost care to detect such frauds.

History of ICAP and Audit in Pakistan The Chartered Accountants Ordinance, 1961, received the asset of the President of Pakistan on March 3, 1961, and was published in Part 1 of Extraordinary Gazette of the Pakistan on March 10, 1961. The Institute of Chartered Accountants of Pakistan came into being on July 1, 1961. A draft of the Chartered Accountants bylaws was also prepared and published for inviting public comments. The Institute of Chartered Accountants of Pakistan is now a statutory autonomous body and is administered by a council of thirteen. The Chartered Accountants bylaws also provided for the foundation of regional committee to look after the interests of their members. At present there are two such committees, one each in Lahore and Karachi. The members are divided into two classes namely. Associates and Fellows chartered accountants (ACA & FCA). REQUIREMENT OF LAW: 17 |P a g e PUGC

Internship Report According to the law every public limited company and every Private Limited company having share capital of more than three million should get it books of accounts audited from a Chartered Accountants as defined in Chartered. APPOINTMENT OF AN AUDITOR: The management of a private company appoints the auditor while the auditor of the public company is appointed in the Annual General Meeting by the Shareholders International Standards of Auditing (ISA) Early history: Groundwork for an international set of standards for auditing began in 1969 with the publication of a number of reports focusing on international auditing by the Accountants International Study Group, comparing the situation in Canada, the UK, and US. A few years later, the establishment of the International Accounting Standards Committee in 1973 generated many calls for a similar body to be set up on the auditing front. Amongst the many calls was a well researched argument from Maurice Moonitz, Director of Accounting Research at AICPA, in his 1978 book 'International Auditing Standards' which set out the case for a set of standards, and went on to recommend the establishment of an International Auditing Standards Committee (IASC). The title from Moonitz is useful in comparing the situation worldwide prior to the adoption of an international set of standards, and in identifying the various calls for international standards at the time. In the late 1970s the Council of International Federation of Accountants (IFAC) created the International Auditing Practices Committee (IAPC) which would be a standing committee of the IFAC Council and subsequently the IFAC Board (in May 2000 the IFAC Council was renamed the IFAC Board). Between 1980 and 1991 the IAPC issued International Auditing Guidelines (IAG) and addendums to these. The first International Standard on Auditing (ISA) was issued in 1991, and this has remained the series to the present day. 2001: IFAC issued a press release reporting on the recommendations from the IAPC Review Task Force which identified a need to "More clearly establish and communicate the authority of IAPC International Standards on Auditing and other guidance". 2002:

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Internship Report The IAPC was renamed as the International Auditing and Assurance Standards Board (IAASB). Membership of the organization was widened to include non-auditors.

1January2003: The IAASB made available the full text of International Standards on Auditing for free on its website and stated that all future final pronouncements would be published for free online. Access to IAASB publications is available to users who register via the IFAC website. May2003: The European Commission issued the communication, "Reinforcing the Statutory audit in the European Union" (COM/2003/286) on 21 May 2003 which identified the requirement to use ISAs for all EU statutory audits from 2005 onwards as a short term priority. The communication was issued with the press release Audit of company accounts: Commission sets out ten priorities to improve quality and protect investors. 6May2004: The Auditing Practices Board (UK) issued a press release announcing their intention to adopt the International Standards of Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB). 22December2004: The APB issued International Standards on Auditing (ISAs) (UK and Ireland). The APB press release stated that these would 'apply to all audits of financial statements for periods commencing on or after 15 December 2004. The APBs previous standards, Statements of Auditing Standards (SASs), are applied for audits of financial statements for periods commencing before that date.' 2009: The International Auditing and Assurance Standards Board (IAASB) completed a project (known as the 'Clarity Project') to update and reformat the International Standards on Auditing (ISAs) which sought 'to improve the understandability of the ISAs and make them more compatible with regulatory frameworks, including the ECs Statutory Audit Directive.' The Clarified ISAs and other related documentation (including FAQs) are available from the IAASB Clarity Center. 19 |P a g e PUGC

Internship Report 2ndMarch2009: The APB issued a press release announcing its intention to update UK and Irish Auditing Standards for the New International Standards on Auditing for 2010. The APB press release states that 'The new UK and Irish auditing standards will be effective for audits of financial statements for periods ending on or after 15 December 2010.'

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Vision statement

We believe in adding value to your organization and building mutually beneficial long term business relationship by delivering high quality service to your organization.

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Mission statement

Our mission is to provide our valued clients the quality they deserve.

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Management Hierarchy

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Management Hierarchy As there is not a large number of workers in audit firms and its management hierarchy is traditional controlled by CEO, M.A CHAUDHARI & CO Gujranwala is managed and controlled by Mr. Mubarak Ali Chaudhari (FCA), than manager and other employees. The structure of M.A CHAUDHARI & CO is very simple Mubarak Ali Ch. is a main person in firm whos final all reports and his decision is the final. You can say he is on the top in hierarchy, after his sign the audit report is finalize. Mr. Safyan is audit manager in this branch and he is a second key person. On previous page you can see the hierarchy chart of M.A CHAUDHARI & CO. Gujranwala branch. In the audit firm four are three layers of the staff and their responsibilities. Above all are the Partners who are the owner of the business Below the Partners there are different managers who deals in different department of the business e.g. Tax, legal and Audit managers who directly report to the Partners and they are responsible of their area. Mr. Raza is the manager of the Tax consultancy and Mr. Safyan is responsible to manage the activities of the audit. Below the managers there are supervisors and clerical staff and the trainees students who perform different tasks assigned them by the manager. There are senior as well as junior student trainees. When an audit team is formed, it consists of the senior, junior clerical and the Supervisor as well.

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Departments There are following department in M.A CHAUDHARI & CO;

1. Taxation Department:

In the taxation department, tax consultancy and guidance is provided to different clients whenever it is needed. Monthly E-filing of sales tax returns and E-filing of income tax return is also done in this department of the firm. Following are the services that are provided under the head of auditing department. Tax consultancy:

M.A Chaudhari & Co. is one of the market leaders for tax services. We assist businesses, individuals and organizations with tax strategy, planning, and compliance, whilst also delivering a wide range of business advisory services with dedicated tax professionals. We take a holistic view, combining industry insight with the technical skills of financial and tax professionals and our other in-house resources as necessary, to develop comprehensive integrated solutions. We have experience of working with an expansive and diverse client-base comprising all types of businesses multinationals, local companies, privately-owned organizations, entrepreneurs, family businesses, trusts, partnerships and private individuals. Tax services include the following: Income Tax Corporate Taxation Non Resident Taxation Personal Taxation Specialized Services Indirect Taxation (Sales Tax, Customs & Federal Excise) Income Tax

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Internship Report The objective of our tax services is to deliver integrated solutions that result in most tax efficient structure. We also provide business advice tailored to meet the specific needs of individual clients. We suggest doable options always keeping in view the fact that such options should be within the legal framework. Corporate Taxation

Our range of services in the area of corporate taxation includes: Preparation and filing of tax returns. Advisory services on interpretational issues in the tax laws. Determination of income and chargeability of tax. Obtaining exemptions and withholding tax certificates on behalf of clients. Assisting the client in preparation, review and filing of various statutory statements. Compliance services relating to corporate taxation including advance payment of tax. Assisting the client in preparation of reply of notices issued by various taxation authorities. Representations before tax authorities and Central Board of Revenue. Representing the clients before various appellate forums.

Non Resident Taxation

The tax services are also provided to non residents and the partners are capable to handle intricate tax issues involving nonresident taxation. The services interlaid include the following: Advising nonresident on transactions before these are entered into. Obtaining Advance Ruling from CBR on tax treatment of any proposed transaction. Advising on tax implications of stock options plans. Advising the tax implications under various Agreements for Avoidance of Double Taxation (Treaties). Personal tax services including International Executive Tax Services. 26 |P a g e PUGC

Internship Report US Tax Returns.

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Specialized Services

Our specialized services encompass the following: Researching tax implications of proposed business transactions or of new businesses. Assisting in the preparation of and in obtaining various approvals for employee retirement schemes such as Provident Fund, Gratuity Fund and Pension Fund. Indirect Taxation (Sales Tax, Customs & Federal Excise)

Over the past few years, the indirect tax net has spread all over the economy, covering almost all sectors of business. Lack of knowledge on the part of tax administrators / tax payers coupled with abrupt changes in law require the provision of timely and effective business advice to help organizations plan and implement the required compliance measures.

2. Auditing Department:

In the audit department audit teams visit the client premises and verify the different accounts and balances when the financial year closes. Following are the services that are provided under the head of auditing department. Assurance:

The role of assurance services in the running of a successful business has changed beyond just fulfilling statutory requirements. We offer appropriate and timely advice in addition to statutory reporting, which enable our clients to effectively handle issues requiring immediate attention and further assist them in taking informed decisions on timely basis. Assurance services include the following: Corporate Reporting Improvement Financial Statement Audit Sustainability Reporting Independent Controls & Systems Process Assurance Internal Audit 28 |P a g e PUGC

Internship Report Regulatory Compliance and Reporting Corporate Reporting Improvement

Reporting more comprehensively on important non-financial assets can often improve the valuation of your company in the capital markets. Research shows that investors and analysts consider financial reports by themselves to be of limited use in determining a company's prospects. M.A Chaudhari & Co. can assist organizations that need to ensure the quality and credibility of internal management information and external disclosures and, in particular, nonfinancial indicators. Our professional leadership on issues related to nonfinancial performance reporting, has not been limited to simply advocating reform. Instead, M.A Chaudhari & Co. can help its client in the practice of non-financial performance reporting with the development of Value Reporting the most comprehensive and robust approach to reporting transparency available in the marketplace. Financial Statements Audit

The financial statement audit has never been more important. In today's business environment there is more scrutiny and skepticism of a company's financial statements than ever before. For organizations that require an audit for statutory or regulatory reasons associated with the filing of their annual and periodic financial information, M.A Chaudhari & Co. can provide high quality audit services. M.A Chaudhari & Co work takes into account all current and where appropriate prospective auditing, accounting, and reporting regulations and guidance. Sustainability Reporting

Shareholders expect your company to generate profits. But, they also want your company to assume its responsibilities to contribute to society while minimizing any negative effects on the environment. For companies looking to improve business performance and create long-term shareholder value, M.A Chaudhari & Co. can help develop a corporate social responsibility (CSR)/sustainability strategy that focuses on key issues for your business and enhances relationships with key stakeholder groups. We can assist our clients in the areas of corporate governance and business ethics, environmental health and safety management, social responsibility, strategy and economics, responsible supplychain management, and reporting and assurance of non-financial information. 29 |P a g e PUGC

Internship Report Independent Controls & Systems Process Assurance

Attention to the design, documentation and operation of controls is critical to ensuring the accuracy and timeliness of information used for financial reporting and management decisionmaking. M.A Chaudhari & Co. provides services related to controls around the financial reporting process, including financial business process and IT management controls. Internal Audit

Internal audit function in todays world needs to walk on a fine line between providing assurance and consulting to management without impairing its objectivity and independence. We can assist organizations that need help improving the quality and effectiveness of their internal audit processes in a number of ways. First, by advising and assisting in the development of internal audit and risk management methodologies, including assessing whether the internal audit function is delivering effectively to stakeholders. Second, by providing internal audit resourcing solutions, including full outsourcing or complementing in-house functions with specialist skills or geographical coverage. In addition, we can develop training for internal auditors using our extensive market and industry knowledge to create highly tailored solutions. Regulatory Compliance & Reporting

Regulatory compliance and reporting needs to be viewed as a natural extension of the governance duties entrusted on top management and corporate boards. For all organizations engaged in activities that come under the control of a regulator, M.A Chaudhari & Co. provides support, advice, and assurance to help you manage your regulatory risks. In an ever-changing regulatory environment, we help ensure that you identify, manage, and control any existing and future regulatory risks. A proactive rather than a monitoring approach to regulation is now a full time strategic necessity. M.A Chaudhari & Co. experienced regulatory risk specialists, who not only know the rules, but have also, implemented and assessed compliance against them. Our people can help you at the strategic level by maximizing any competitive advantages from regulation through to the operational level and by minimizing the costs and disruptions to your business, thereby freeing up management time in the process.

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3. Corporate consultancy department:

Financial consultancy: Finance professionals provide comprehensive financial advice and

M.A Chaudhari & Co.

execution expertise, encompassing mergers, acquisitions, divestitures, restructurings, private placements, privatizations and equity capital markets to clients ranging from corporations and financial institutions; adding value for our clients throughout all stages of the process. Financial Consulting services include the following: Financial Performance Improvement Financial Accounting Accounting Valuation Advice on Fundraising Financial Due Diligence Mergers & Acquisitions Advisory Project Finance Structuring Services Financial Performance Improvement

We support CEOs, CFOs, Controller and Treasurers to optimize the structure of their Finance functions thus improving contribution to business. We structure our support to ensure that Finance addresses the challenges of achieving appropriate standards of control, efficient back office opportunities and support to the business through insight and challenge. Recently, the emphasis of Finance has been control and efficiency characterized by a heavy focus on compliance delivered through streamlined back office models. Financial Accounting

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Internship Report With the advancement in International Financial Reporting Standards (IFRS) for many of our clients, financial accounting has become a lot more complicated. And if the past few years are any guide, the future holds more regulations, new requirements, and an increasing compliance burden. Accounting Valuation

International Financial Reporting Standards (IFRS) introduce significant changes to the way that accounts must be prepared and presented, requiring a wider range of assets to be valued on an annual basis. IFRS changes the accounting treatment for acquisitions. All assets (tangible and intangible) from a merger or acquisition now have to be included in the balance sheet of the acquirer at their current market value and are depreciated over their useful economic life. Goodwill is now tested for impairment annually, and is marked down according to the conclusions of that annual process. A range of financial assets now also need to be valued under IFRS, including financial instruments and insurance contracts. IFRS requires# share options to be valued as they are charged against the profit and loss account on an annual basis. These considerable changes call for specialist valuation services that both understand the specific accounting implications and the wider commercial context in which those accounting valuations will apply. M.A Chaudhari & Co. valuation services draw on considerable technical and financial specialization, as well being able to access accounting specialists to deliver integrated advice to our clients. Advice on Fundraising

Raising finance to fund expansion plans means examining a wide range of issues and answering a complex set of questions. The capital markets have a challenging environment and selecting the right location and structure requires considerable insight and experience.

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Internship Report M.A Chaudhari & Co. has experience of advising businesses on their fund-raising plans in all markets. Whether through a public or private market, through equity or debt instruments, our experience covers all possible scenarios and our independence means that we focus solely on identifying and structuring the best source of finance for our client. We have understanding of local markets, and can help clients to negotiate the challenges that may otherwise derail the unprepared. Our networks of contacts and deep relationships with countless sources of finance place us in the best possible position to make sure that our clients get the finance that fits their purposes and helps them meet their goals. Financial Due Diligence

All businesses involved in an acquisition, as buyers or sellers, need to ensure that the financial information they hold is as accurate as possible, not only to prevent paying too much (or in a sellers case receiving too little) but also to ensure that their governance and risk management objectives are met. Mergers & Acquisitions Advisory

A merger or acquisition can add considerable value to a business, but making sure that each stage of the transaction process from valuation to negotiation and completion is successful demands considerable experience and knowledge. Our services are designed to help our clients reach their strategic goals by Identifying and then implementing opportunities to merge with or acquire other businesses. Many drivers can affect a deal; from regulatory restrictions to tax issues. As the professional services organization, we can call upon our dedicated specialists to address any specific challenges that may arise. Project Finance

Funding for large projects (like infrastructure projects) is a complex area, and there are specific challenges involved in creating the appropriate finance structures to manage risks effectively. 33 |P a g e PUGC

Internship Report M.A Chaudhari & Co. has experienced professionals who have working experience with both governments and private sector bidders. We help the public sector develop the right approach to procurement. We help private sector partners to get the best out of the process. Structuring Services

A number of different considerations can influence the optimal structure for a deal requiring a balance between the objectives behind the deal and accounting, tax, regulatory and commercial considerations. We help clients to identify the principal concerns that will determine the right structure for a transaction. We can assist with marshalling the complex range of factors including tax, legal, accounting and regulatory issues that will need to be considered together. We create a feasibility plan to assess the chosen structure and once this is confirmed as the right choice we will provide continuous support throughout implementation. Business Consultancy:

Today's business world is fast-paced. To succeed, you must seize the opportunities while also managing the risks. You need to move quickly, but you also need long-term strategies to help ensure your business can cope with the demands placed on it today and tomorrow. M.A Chaudhari & Co. business consulting practices: Take an objective, long-term view. Deploy professional resources that can bring global knowledge to local issues. Have an integrated approach to client service with teams of experienced professionals with a breadth of specific technical and industry sector skills. M.A Chaudhari & Co. provides advice and assistance to companies, corporations and other concerns. Our services can help you respond to immediate needs as well as put in place the strategies for the longer term. Business consulting includes the following: Business Recovery Services Dispute Analysis & Investigations 34 |P a g e PUGC

Internship Report Commercial & Market Due Diligence Modeling And Business Planning Information Technology Consulting Enterprise Risk Management Human Capital Aid to Industry Third Party Assurance Business Process Outsourcing:

Business Process Outsourcing (BPO) provides accounting, financial reporting and transactionintensive process support to clients. While your management concentrates on enhancing the core business, our skilled professionals focus on your financial accounting and reporting. We perform these functions efficiently and cost-effectively, using a broad knowledge of business processes and financial software packages. These resources not only enhance our ability to help clients with their finance, accounting and applications outsourcing, but also assists them in selecting and implementing software systems; establishing company-wide networks; writing policies and procedures; creating call centers; and, standardizing processing after mergers and acquisitions. Through Business Process Outsourcing (BPO) services, we take over a client's back-office F&A and related procurement business processes and manage them on an ongoing basis. We offer a full IFRS compliant services and solutions, including transaction processing; financial accounting and reporting; statutory/regulatory accounting and reporting; and, transaction processing. Our transaction processing services cover payables, disbursements and expenses; receivables, receipts and revenues; general ledger; and, payroll. Our approach to BPO is a highly collaborative blend of client and firm strengths. We customize each engagement according to our client's processes, internal controls and system requirements.

4. Other Consultancy: Feasibility studies: PUGC

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Internship Report Under the head of the feasibility studies, M.A Chaudhari & Co. can conduct the project feasibility study on behalf of the other companies. Firm conduct the study and furnish the comprehensive report on that and make the recommendation to other companies for the project. Foreign study consultancy: Foreign study consultancy is the new service provided by the M.A Chaudhari & Co. for those students who wish to study abroad and those who want the foreign immigration. Mr. Shoaib is expert in foreign study consultancy and he provides the consultancy for Canada, England and Australia.

Process of Audit The firm after getting appointed as the auditor, in the annual general meeting by the shareholders or by the management, starts the audit. First it asks the management for the Letter of Appointment. Then management is asked to give a list of all books of accounts maintained by the client and a list of all officers of the company along with their designation and authority. Previous years-audited accounts are also demanded. These documents are studied to gain about the clients business. If the audit of the client was also done in the previous year then these information's can be obtained from the working papers i.e. file maintained by the audit firm containing documents received from the client. INTERNAL CONTROL/MANAGEMENT CHECKING: 36 |P a g e PUGC

Internship Report Senior and semi-seniors examined internal control. This was done in order to examine the weaknesses of system, to consider the proposition of introducing test check, to be performed during the course of audit and to determine exactly the extent of work to be performed. It enables the auditor to express his opinion on the given books of accounts. Audit Plan: After getting the required information and documents the one of the seniors makes an audit plan including audit program. The audit program includes the detail of the work to be done by the audit team, estimated time period required, distribution of work among the members of audit team. Then the audit plan is discussed with the Principal of the firm and necessary changes are made in the audit plan to carry on the work of audit most effectively and efficiently. After finalizing the audit plan the senior makes an audit team. The senior gives the team member's necessary information's about the client and the work to be done by them. He then distributes the work among the team members and assigns different initials and different colors and marks which they have to put against the work they have completed. The seniors and the principal periodically supervise the work in order to check whether the work is being performed according to audit plan or not. After analyzing the work performed they make necessary changes to ensure that the work is done efficiently. In the audit planning the following things are discussed with detail: Business address and Details. Knowledge of business of the client. System notes and areas. Audit program. Risk assessment. Timeliness and staff involved. Materiality assessed by variance analysis. Strategy. Audit procedure. Previous year's outstanding points. Current year's pinots to be carried forward.


Internship Report An audit program was prepared by our seniors, with due care and skill. It was decided to conduct the audit under the supervision of a senior. During the conduct of audit, some notes were prepared like: Audit Review Notes: Audit Queries: To note the points that needs further discussion with the management. To not all those vouchers that remains insufficiently vouched. A complete record as to how they were cleared and all those, which remained unclear and reported to management, is maintained. Important Balances: Compliance testing: Notes of important closing balances particularly in respect of cash and bank accounts and stock. In this part it is checked that the business comply with all its rules and regulations or not. For this the article and memorandum of association is checked. The articles are checked to see the general business practices and the commencement of the annual report and declaration of dividend and bonus. Checking Of Books of Accounts: When the audit work starts first the books of accounts are checked for errors which may be due to wrong entries, omission of transaction, wrong total, wrong carry and brought forward etc. The checking of books of accounts may or may not include detail checking, it may involve test checking. It depends upon the control system involved. OPERATION OF AUDIT: The audit was operated / conducted with the help of following techniques. Vouching: In vouching every transaction is checked with it documentary evidence. Documentary evidence includes vouchers, invoices, and goods inward and outward notes, cash memos and receipts. It is also checked that the transaction is authorized by a proper person having powers to do so. Verification: When vouching is complete then the verification of assets and liabilities takes place. Assets of the firm are verified by checking them if the assets are held by others then a letter is written to them to verify their presence and their title. For confirmation of major debtors a letter is written to them to confirm the balance due from them. T confirm bank balance account, statement is 38 |P a g e PUGC

Internship Report received from the client's banker. For the confirmation of liabilities letters to the creditors is written to confirm their balance due to them. In order to check the stock of the client, stock taking is done, where the members of audit team visits the storerooms of the factory and see the counting of the stock done by the store keepers and if they find something wrong they themselves count the stock. During the stock taking storerooms records are also checked to see that they are maintained properly. If due to some reason any asset cannot be verified then a certificate is received from the management certifying the existence of the asset. Ticking: During the checking of various books, the entries that were checked were marked/ticked with red pen indicating that the entry has been examined for certain purpose. Variously shaped marks were used to denote checking of additions; postings carry forwards, balances etc. Posting Check: Then it was checked whether the transactions are correctly and accurately posted to ledger or not. Special care in checking posting to personal ledgers in needed as to names and titles of accounts; otherwise a wrong posting may remain undetected. Cross Checking: It is the comparison of entries in two or more books or of an entry in a book with its supporting evidence or voucher. My seniors assisted me in this step. Accuracy of cross checking plays a vital role in the process of auditing. Therefore, it should be made with due care. Trial Balance Checking: Then trail balance was checked and important balances were noted in the working papers for reference use in further process. If during the course of audit different queries or unexplained events are seen, then these are noted and explanations asked from management and they are asked to make necessary adjustments. If during the course of audit some irregularity is witnessed that is also reported to the management and reported in the auditors report. Analytical Procedure: After the end of the audit analytical procedure is adopted in order to confirm the accuracy and correctness of the results obtained from above procedures, Profit and Loss Account and Balance Sheet. In analytical procedure results are compared with prior period results, ratios, expected results and industrial information. Any major difference is looked into. At this stage the stock valuation, Material variations, Financial Ratio, and Variance Analysis are done. 39 |P a g e PUGC

Internship Report

OTHER MATTERS OF CONSIDERATION: Physical Existence of Assets: Physical existence of assets, particularly stocks, was checked. It was also ensured that assets are the property of business and that each asset is correctly valued and correctly stated in the balance sheet. This check was made for the date of balance sheet. Capital and Revenue Expenditures Checked: Distinction of capital and revenue expenditures was made and the accuracy of maintenance of these expenditures was examined. Depreciation of Assets: Identification of errors for manager: Provision for depreciation of assets was checked and tallied with the balance sheet. After doing all these process and vouching and verification the report of errors is prepared and this report is submitted to the supervisor or the manger, which checks it and made any corrections and finalizes it to be presented to the partner or principle. Summarization of matters of variance for partner:

After that the report of errors are submitted to the partner by the supervisor who again check it thoroughly and pinot out any errors and the matters of further analysis. Auditor's Report: After that auditor's report is given. If the auditor is satisfied with all the information required by him has been provided to him and books of accounts have been properly maintained and profit and loss account. Balance Sheet has been properly drafted and show fair view of the company's affairs, the auditor gives an `Unqualified Report'. If the auditor is not satisfied with the explanation of the management and finds irregularities then he gives 'Qualified Report'. Review of Performance: At the end of an audit the auditor and the seniors review the performance of the audit team. They try to find out where mistakes were done, was the audit completed on time, were the team members vigilant during their work? Team members are assessed as a group as well as individually. If something is found to be unsatisfactory then proper steps are taken to ensure that

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Internship Report these irregularities do not appear in future audits. During the course of audit documents, balances and papers etc. are collected which at the end of the audit are kept in a file for the future audits.

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Area of Internship
Chartered accountant sector is the most growing sector of Pakistan and it was the 1st finance field. So, I think it is a great opportunity for me to work with M.A Chaudhari & Co. which is good company in this regard. I joined .A Chaudhari & Co on 15th July 2010. Internship prolonged for one month from 15th July 2010 to 15th August 2010. In my Internship tenure I have performed different works there. I have tried my best to enhance my ability and apply the knowledge that I gained during studies. When I start my Internship session it was the peak working period for C.A firm, because it was financial year ending of most companies that were client of .A Chaudhari & Co. On my first day at firm, Mr. Safyan gave me training session about book keeping; maintain records and stock takeover for different companies and also shared his practical experience with me and gave me some techniques of this process. He also guided me that how to develop relations with customers, and how to face them in all this audit period. During the period of my internship I preformed the different task in different areas of the M.A Chaudhari & Co. which are the following;

1. The audit process 2. The audited reports 3. Maintain of Accounts/Book keeping 4. Preparation of the financial which include the following;
a. Current year financials b. Projected financials c. Spread

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Work done during internship

I started my internship as junior trainee. My two months training enabled me learn a lot about accounting, taxation, auditing, management consultancy and corporate affairs. Although two months is very short period to learn everything and to get perfect in the art of accounting and auditing, Working at M.A Chaudhari & Co. (Chartered Accountants) gave me a golden opportunity to learn some valuable things not only about auditing and accounting but also about Corporate Law and Income Tax. My work at the firm made my concepts of accounting and auditing very clear. The guidance of my colleagues and principal of the firm was very helpful and they provided all necessary information to me. My internship training at M.A Chaudhari & Co. (Chartered Accountants) under these staff of the firm: In Audit, Finance, Accounts, Corporate and others sections: Mr. Safyan Mr. Khurram Mr. Shoaib Mr. Azeem Mr. Talal Mr. Abubakar

1st Week (18-July-2010 to 24-July-2010):

Fist day was just an introductory day at office. Sir Safyan gave me a comprehensive briefing about history and working of their CA firm. He introduced me with all other staff. He also told me about clients of their CA firm. For practical work he gave me task to manage the file of the different companies that are the clients of the M.A Chaudhari & Co. and during the first week of my internship I assist my seniors and learn how the financials of the different companies are prepared. Work Accomplished: Manage the different files of the companies.

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Internship Report I prepared ledger of the different clients of the M.A Chaudhari & Co. as the task assigned by the audit manager of the M.A Chaudhari & Co.

2nd Week (25-July-2010 to 31-July-2010):

During the second week of the internship I have learned the use of M.S Excel for the purpose of financial reporting, for reporting errors, for making tax return forms and other purposes. I learn the different dimensions of Excel. Sir Safyan sends us on the audit of the kidney Dialysis center (KDC) Civil hospital Gujranwala. Where I learned the different aspect of the audit process and check & audited the record of the Kidney Dialysis center (KDC) Civil hospital Gujranwala. Before going on the audit we were given a brief introduction of the clients business, audit program and plan. Then we were told about the work to be done at the client's office. Each one of the audit team members was given a specific job and different signs were assigned to each of us whom we had to put in front of the entries that were checked. We were also required to put our initials on the audit program when we completed our assigned jobs. Initial work: For the first week I was given the duty of checking the totals, costing, posting, carry forwards, brought forwards, journal entries for wrong entries and their posting, in ledgers. During this period I gained valuables about maintaining books of accounts. While checking the accounts not all the entries were checked, only a limited number of entries were checked, it is called Test checking. Only a sample of entries were checked, the size of the sample depend on different matters like materiality level, efficiency of internal control system, possibility of occurrence of error and other condition. Apart from applying test check method some transactions of unusual nature or amounts were also checked to find out errors or frauds. If the errors in an account exceeded from the expected level then that account was thoroughly checked and the method of test checking was abandoned for that account. After checking ever entry a tick mark was put against the entry to show that the entry has been checked. Vouching: After checking of accounts vouching was done. Vouching is done to make sure that entry is original and not a fictitious one. Different organizations maintain different types of documents 44 |P a g e PUGC

Internship Report and there are different documents for different transactions. The selected transactions were checked with their supporting documents. Not only the amount on each document was compared with the entry but other thing like proper authorization by a responsible person, name of the client etc. was also checked. Supporting documents includes sale and purchase invoices, cash memos, bills, receipts, vouchers, minutes, goods in and out notes, freight receipts, letter of credit in case of import, goods inward register, etc. Verification: After vouching verification of assets of the firm and to avoid any wrong liability, verification is done to find out, whether the asset or liability appearing in the account really exists or not, whether they are being properly valued or not, confirm the ownership of assets and liabilities, are these assets being disclosed according to the requirements of the law, whether any asset is suffering from any kind of charge if yes then it is disclosed in the accounts. Whether the acquisition of assets and liabilities is authorized under the memorandum of association and articles of associations. The existence of an asset was checked by seeing, weighting, measuring, and counting the assets. If the asset could not be checked due to some unavoidable reasons then a certificate to the existence of the asset was obtained from the management or a responsible person of the organization. For this stock take is done. As we have to audit the past two years thats why we have to work back the stock from the stores ledgers. This was new thing me and I learn a lot about it. Special stress was laid upon the counting of the cash in hand and it was done on the balance sheet date in the presence of the members of audit team. Bank balance was verified by obtaining a certificate directly from the client's banker. My senior has work back the cash and I assist him it also increase my knowledge. Investments held were verified by physically examining them. Some of the investments held by the bank on behalf of the client were verified by obtaining a certificate directly from the client's banker. Investments held were verified by physically examining them. Some of the investments held by the bank on behalf of the client were verified by obtaining a certificate from the bank and confirming that the investment was not held as a security for a loan.

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Internship Report After verification of the existence of assets and liabilities, their value was examined. Assets were valued by using different methods depending upon the type of assets. Usually fixed assets are valued at cost less depreciation, while current assets are valued at lower of cost or net realizable values. The ownership of an asset was verified by looking at the title documents of the assets or by obtaining a certificate from the banker of the client if the bank held the asset. The liability balances were confirmed by obtaining confirmation letters from the creditors. To see whether the asset was disclosed according to the requirements of the law Company's Ordinance 1984 and related IAS were consulted. The assets suffering from a charge were also disclosed in the balance sheet. It was also checked that the loan against the asset was obtained for the business and not by one else for his personal use and the mortgage was in accordance with the provisions of the Memorandum of Association and Articles of Association. If the assets were held by third party then a certificate from the concerned party was obtained as the ownership of the asset. During the course of audit if any information was needed then management was asked to prove the required information which they are legally bound to provide. Errors discovered were also noted and explanation and correction were asked. In Some cases while checking the salary sheet such names of employees appeared which had no record their named even did not appeared on the attendance sheet? Mainly that was due to the fraud of the management. The tax deducted by the management is of 12 months while the salary paid is only of 11 months. Most of the records maintained by the client were computerized so they had less errors and faults in them. Sometimes debtors make the payment and entry for the same is not written. Another mistake witnessed was the wrong distinction between the capital and revenue expense and earning. For example an advertisement for the sale of asset was added to the value of the said asset as cost of addition. Some expenses have neither the original nor the rough sporting especially the entertainment expenses. Income Estimation: 46 |P a g e PUGC

Internship Report M.A Chaudhari & Co. (Chartered Accountants) also provides professional services in estimating incomes of various businesses, small and medium in the organized and unorganized sectors for disbursement of loans pertaining to car loan, house loans, business loan and other customer finance products. I did help my seniors and staff members in income estimation for some different firms. In the process, last three or five years' income of the applicant (for loans) is averaged to decide whether he can or cannot repay the loan. During the audit of KDC, the profit and tax calculated by the bank of the fixed deposit did not matched with our calculation, the our supervisor Sir Shoaib assist us to solve out the problem of the profit and tax calculation on FD.

Work Accomplished:
During the audit of Kidney Dialysis Center: Physical checking of the. inventory Physical inspection of the Assets. Checking of the record of KDC which include the medicine purchase receipt, new assets purchase receipt.

3rd Week (1-July-2010 to 7-July-2010) :

During the third week of my internship I learned a new concept of work backing in which the latest record of cash and stock is used to assess the cash and stock of the previous periods. In this all sales are added and all purchases are minimized to reach the opening stock of the previous periods. I also learn from my senior, how the projected financials of the different companies are prepared. For the purpose to make the projected financials of the different companies they used the different ratios of the previous year such as gross profit ratio (GPR) net profit ratio (NPV) etc. Work Accomplished: I prepared the audited report of the kidney dialysis center (KDC) which include the following: o Audited Balance Sheet. o Audited Receipt & Payment account.

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Internship Report o Audited Income & Expenditure account. And also prepared the different projected financials statements of the different clients of the M.A Chaudhari & Co. such as Madina Rice Mills.

4th Week (8-July-2010 to 14-Aug-2010):

During the last week of my internship, I learn how to prepare the spread of the different companies which is a pre-constructed MS Excel Sheet and consist of the five pages. First page include the different formulas or ratios formulas which are automatically change as we enter the data in the remaining four pages of the document. Second page contain the headings of the balance sheet, upper part of the page contain the items of assets side and lower part contain items of the liabilities side. Third page contain the items of the income statement and fourth page contain the items and detailed record of the deprecation. In short spread is the summarized form of the financial statements of the company. Below the every page there is the check, if that check is zero then it considered to be correct. Work Accomplished: I prepared the spread of the different clients of the Allied Bank Limited, trust plaza, Gujranwala who is the one of the clients of the M.A Chaudhari & Co.

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The experience in M.A Chaudhari & Co. was very great there so many things for gathering. I am so happy that I did my internship in M.A Chaudhari & Co. I gain the different kind of knowledge and learn the following work.

Check the company bank account in different cities Maintaining the files in M.A Chaudhari (chartered accountants) Understand that how we can checks the books of accounts How we can prepare the reports Verifying the general entries, ledger and cashbook How to check the balance sheet Comparison the reports with previous Reconciling How to deal with clients Check vouchers Prepare financial So many others

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Duties & Responsibilities:

During my internship, I have to follow steps which were directed to me from my supervisor. I have different tasks to perform like Book keeping, Stock takeover , make Purchase & Sales invoices, E - Filing. So many Duties and Responsibilities were applied on me in respect of tasks which were given to me. Some of the responsibilities and duties are as follows: Reach the office in time and never waste the time. Complete the work in time which was given to me. Maintain the Accounts / Book keeping of companies from the supporting documents given to me. Make sure that the information given in books of accounts and prepared by me is in well mannered and have no mistakes and error in that. After prepare the records and books of accounts took the documents in their right place from where I get them. Detecting the mistakes and errors in books of accounts, After detecting the mistakes in accounts correct them nicely. After completing the report and documents arrange them in file and re-check them whether any mistake is left or not. After completion my work gives the related documents to supervisor. Submit weekly progress report to Sir. Safyan for verification. Correction of mistakes at the end of week which were made by me during the weekly work.

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Rights as internee:
I have also some rights as an internee. Some of them are as follows:

Right to access the books of accounts of the company. Right to get the documents and information about the company. Right to know about the each and every thing that I need related to documents prepared
by me. Above I explain the duties, responsibilities and right which were applied on me during internship. I tried my best to follow the rules of organization and perform all my duties in well mannered.

New Knowledge Acquired:

The whole internship program was full of learning. I gain lot of practical knowledge which will help me lot in my future. It was the chance for me to implant my bookish knowledge in practical work. So, it gave me chance to meet more people and learn from their experience. Some of the things which I have learned are as follow; I learn about the environment in an organization. I come to learn the importance of time and how to complete the task with in time. My communication skill is improved. I learn how to work as a team member. I got a chance to improve my capabilities and practical knowledge regarding to Accounts, Tax and Audit. I come to know that how Chartered Accountant maintains the accounts of different companies and what kind of Duties and responsibilities they have to making an audit. I get knowledge that how the information & data get from companies and compiling them and prepared and filed. perform during

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Internship Report I learn from the Assistant of Sir. Safyan that how the audit of a firm is being performed and kind of documents will require during making an audit. I learn how to use the theoretical knowledge in an organization. I come to know what kinds of services are provided by a Chartered Accountants firm. I get the chance to come know about the culture of different companies. I come to know how take work from employees within time

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SWOT Analysis
SWOT is the abbreviation of strengths weakness opportunities and threats. In is the first two strengths and weakness are the internal factors of the organization, to whom an organization can control. The other two factors are external factors which are beyond the control of the organization. The SWOT analysis of M.A Chaudhari & Co. is as follows:

Following are the strength of the M.A Chaudhari & Co. that I observed in that auditing firm during my internship; Experienced Mgt: M.A Chaudhari & Co. has the well qualified and experienced management and the trainees students are also experienced as most of them have completed one or more year articles. They know their work and its all technicalities. That experienced management is the actual strength of the M.A Chaudhari & Co. Quality Services: All the services of the business are available under roof from business consultancy to audit and Tax affairs all are available at one place. From all the services provided by M.A Chaudhari & Co. customers are much satisfied. And these services are provided with perfection and excellence. Accounting Consultancy: M.A Chaudhari & Co. also provides accounting consultancy and services, which are the need of the day. Technological improvement is very necessary for every organization, thats why M.A Chaudhari & Co. also provides the computerized accounting consultancy and assistance to the different organization for efficient and accurate reporting. Personal Interaction: The partners have personal interaction with each member of the firm, which increase the motivation of the employees. M.A Chaudhari & Co. has the decentralized management. Every member and internee allows to directly interacting with the senior managers if members and internee needs any assistant for them.

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Internship Report Learning Behavior:

There is the learning behavior among the trainee students which enhance their knowledge. In M.A Chaudhari & Co. audit firm, there are no of experienced managers from whom internees can learn the so many things that help them in their work. I feel the learning environment in M.A Chaudhari & Co. and learn a lot of things from my seniors. Job Opportunities: M.A Chaudhari & Co. CA firm also provides the job opportunity to its members. Different clients of M.A Chaudhari & Co. approach to the firm for professional accountants for their organizations. In this way M.A Chaudhari & Co. recruits the different internee to different organizations.

Internet facility: Lack of internet facility to the students, which affects their learning capabilities and change them according to the changing environment. In M.A Chaudhari & Co. auditing firm there is the restriction that internee are not allowed to use the internet facility, which may affect the internees ability to enhance their knowledge. Compensation package Compensation package especially for the students is not so good. They are not according to work performed by them, which decrease their commitment towards work. There is a lot of burden on the employees and internees but their reward is not according to their work that may create the dissatisfaction among the employees. Office timing: Office timing is not very strictly followed. Office timing is 9:00 am to 5:00 pm, but most of the employees and managers come at 10:00 am. That kind of behavior towards the timing shows the non-professionalism on the side of employees and managers. Rules & Regulations: There are the defined rules and regulation in M.A Chaudhari & Co. But there is no one in that organization that strictly follows these rules and regulation of the firm. That also shows the non professional behavior of the members of the firm. 54 |P a g e PUGC

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To Enhance the Business: Most of the local business man are illiterate and do not know the tax and legal implications of the business, so the audit firm can get business very easily. That is the opportunity for M.A Chaudhari & Co. to approach and communicate with such businesses for the purpose to enhance firms own volume of business. To take Advantage of location: M.A Chaudhari & Co. located in the prime location of the Gujranwala. Trust plaza is the financial hub of the business in the city of Gujranwala. By using such opportunity, firm can increase the no of clients and also increase the business volume. To make a network: M.A Chaudhari & Co. is the oldest auditing firm of the Gujranwala. It is the well known auditing firm of the Gujranwala region. By using that advantage and making a network with clients within and outside the city which allows its customs to negotiate and communicate with firm easily, it can enhance its business volume. To build long term relation: Clients of M.A Chaudhari & Co. are very loyal with the organization. And some clients have the strong relationship with the firm. M.A Chaudhari & Co. has the opportunity to convert the loyalty and strong relationship into the long term business relationship which is very important for the growth of the organization.

Economic Conditions: There is no business due to the poor economic conditions of the country. And due to those poor economic conditions mostly persons shift their business to the other countries of the world. That is the alarming situation for such firm and the country as well. Competitors: The firm has the competition with a lot of firms. There is instance competition among the market for the clients as the firm has to compete at Lahore as Well as Rawalpindi and Gujranwala. That

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Internship Report competition is the major threat for the M.A Chaudhari & Co. which is strong enough to snatch the business or clients form the firm

M.A Chaudhari & Co Gujranwala is a well-known and successful financial institution among the other audit firms working in Gujranwala, it is said, nothing is perfect in the world, and there is always room for improvement. Following are some recommendations for improvement: Although the firm has a network of many branches but it should spread its branch network throughout the world especially in the countries involved in international trade with Pakistan. Departments of the firm are not very proper according to the needs of clients. There should well define departments so those clients recognize their required departments without any difficulty. I personally feel that there is lack of staff in the firm, and the staff sometime feels exhausted due to workload, so there should be something for the motivation of staff members. Training and development of employees should be on continuous basis. Since the most work of audit is done by the internees so the selection of probationers should be such that the competent persons should be available. Internees should be well versed with the knowledge of audit, International Accounting Standards, Income tax and corporate laws. At least two new computers with latest software and a printer should be immediately purchased for the Office. The staff must be asked to learn operating the computers immediately. This would result in more efficiency is sending the inquiry letters to the client and other parties.

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Internship Report As most of the staff is students so, staff should be provided with the internet so that they can upgrade their knowledge and also know about the latest trends. Internet is very important for their knowledge up gradation. Audit staff should be according to the volume of business. Facilities to internees like 2-holidays in a week and other fringe benefits should be given. Performance sheet should be prepared to check the performance of the staff and internees. That sheet should be filled by the pears and the supervisor. The supervisor should be given the authority to take minor decisions, which will save the partner precious time. The supervisor should also give extra monitory benefits to his valuable contributions in the firm performance. The firm should market itself to meet the competition in Lahore and Gujranwala. Audit planning is the integral part of the audit so all the audit should be well planned and the audit team should be the part of the audit planning.

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In the nut shell, I conclude my 6 weeks of internship as a good learning experience of my life. It is that short time-period of my life when I used my all knowledge and skills which I learnt in 16years of academic career. I found M.A Chaudhari & Co Gujranwala branch as the backbone of the city among the other audit firms as it has 70 clients in the Gujranwala region. It is playing its role efficiently in the Audit and accounting sector of Gujranwala, Pakistan. It gives me a bridge of learning in practical field of working; here the employees are very co-operative and helpful. They really made to learn from them. Ive learnt all the major activities required for the working of an accountant and auditor.

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I collect all information to complete this report with the help of employees of the M.A CHAUDHARY & CO Branch office Gujranwala, I got interview of manager Mr. Khurram and discussion with colleagues and friends. Following are the sites form where I collect the data;

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ISA: International Standards on Auditing (ISA) are professional standards for the performance of financial audit of financial information. These standards are issued by International Federation of Accountants (IFAC) through the International Auditing and Assurance Standards Board (IAASB). STS: Sales Tax System is software designed to record the sales invoices with the specification of date, product code, customer name & address, Quantity, and amount of sales tax and total amount. FCA: Fellow Chartered Accountant ACA: Associate Chartered Accountant Audit Report: Audit report is the report which is prepared by audit firm after the completion audit workings to give opinion on the financial statements of the company. Query Sheet: Query sheet is prepared during the audit workings to note the questions which arise during the verification of different accounts, and to note the missing evidences. Audit File: Audit file is prepared for the record of office of the audit firm, it contains audit letter to management of the company, ledgers, opening and closing account balances, copy of financial statements, query sheet and copy of audit report. IASC: International Accounting Standards Committee was founded in June 1973 in London and replaced by the International Accounting Standards Board on 1 April 2001. It was responsible for developing the International Accounting Standards and promoting the use and application of these standards. IAPC: 60 |P a g e PUGC

Internship Report International Auditing Practices Committee (IAPC) IFAC: International Federation of Accountants (IFAC) is the global organization for the accountancy profession. IFAC has 164 member and associates in 124 countries. IAG: International Auditing Guidelines (IAG) IAASB: The International Auditing and Assurance Standards Board (IAASB) is the independent standard setting body which issue auditing, review, other assurance related services and quality control standards to be applied by the global auditing profession. It is a body initiated by the International Federation of Accountants (IFAC). IFRS: International Board (IASB). Financial Reporting Standards (IFRS) are principles-based Standards, Interpretations and the Framework (1989) adopted by the International Accounting Standards

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I attached the internship letter here with this report.

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