INTERNSHIP TRAINING REPORT

A Report is submitted to NGM College for the award of the degree of

Bachelor of commerce – Professional Accounting

Submitted By

A.JAGADESHWARAN

(19-CP-08)

Under the guidance of

Dr. N. SUMATHI M.Com., M.Phil, PGDEC, MBA, Ph.D.,

Assistant Professor

UNDER GRADUATE DEPARTMENT OF COMMERCE PROFESSIONAL ACCOUNTING

NALLAMUTHU GOUNDER MAHALINGAM COLLEGE

(An Autonomous and Affiliated to Bharathiar University)

Re-Accredited by NAAC

An ISO 9001:2019 certified institution

Pollachi – 642 001

April - 2022

1
 Certificate
2
 CERTIFICATE
This is to certify that the project prepared by A. JAGADESHWARAN (19-CP-08) is a
Bonafide work done under my supervision

Place:

Date:

----------------------- -------------------

GUIDE HEAD OF THE DEPARTMENT

--------------------- ----------------------

INTERNAL EXAMINAR EXTERNAL EXAMINAR

3
 AUDITOR PROFILE
4
 AUDITOR PROFILE
NAME : S. PUNNIYA MOORTHI

ORGANISATION NAME : PENTAGONS AUDITING AND TAX

CONSULTANTS

ADDRESS : NO 126/22, Praveen Plaza, 3rd Floor Near SAP

Theatre, Avinashi Road, TIRUPUR – 641 603

EDUCATIONAL QUALIFICATIONS : MBA (FINANCIAL MANAGEMENT)

DESIGNATION : Auditing & Tax Consultant

PHONE NO. : 98420 21097

EMAIL ID : pentagonstax86@gmail.com

NO OF STAFFS :6

NATIONALITY : INDIAN

AREA OF SERVICE. : Internal Auditing, Income Tax & TDS Consultations,

GSTIN Registration.

5
 DECLARATION
6
 DECLARATION
I do hereby declare that this project report entitled PRACTICAL AUDITING
INTERNSHIP TRAINING REPORT is submitted to Nallamuthu Gounder Mahalingam College
(an Autonomous and affiliated to Bharathiar University) in partial fulfillment of the requirement
for award of B.Com (PA)., degree is a record of original work done by us during the period of
our study 2019 - 2022, under the supervision and guidance of Dr. N. SUMATHI M.Com.,
M.Phil, PGDEC, MBA, Ph.D., Assistant Professor NGM College, Pollachi.

Signature of the candidate

Place:

Date:

7
ACKNOWLEDGEMENT
8
 ACKNOWLEDGEMENT
Blessings of almighty to complete the research, being a team work, are almost impossible
to complete without the help of others. This study became possible due to the whole hearted
co-operation of many scholastic person and well-wishers. I deem it a pleasure to acknowledge
them here.

My Sincere thanks to our Principal Dr. R. MUTHUKUMARAN M.A., M.Phil., B.Ed.,

Ph.D. Principal, Nallamuthu Gounder Mahalingam College, Pollachi for providing the necessary
facilities to carry out the research.

I show my gratitude and thanks to Dr. S.B.GAYATHRI M.Com., M.Phil., Ph.D.

Associate Professor and Head of Commerce Professional Accounting, Nallamuthu Gounder
Mahalingam College, Pollachi for moral support and motivating me to complete this project.

My pleasure to record my thankfulness to my guide, Dr. N. SUMATHI M.Com., M.Phil,

PGDEC, MBA, Ph.D., Assistant Professor of Commerce Professional Accounting, Nallamuthu
Gounder Mahalingam College, Pollachi for her valuable guidance, constant encouragement and
motivating me in successful completion of this project work within short span of time.

It’s my bounded my heartiest thanks to other Faculty Members of Commerce

Professional Accounting, Nallamuthu Gounder Mahalingam College, Pollachi for their
encouragement to carry out this course.

I committed to place my heartfelt thanks to S. PUNNIYA MOORTHI., MBA (Financial

Management) (Auditing) (Tax Consultant), and other office colleagues, Pollachi for their
continuous support, suggestions and encouragement in the completion of this project.

I feel happy to express my thanks to My Parents & My Friends who always stand with
me and render all necessary help in all my efforts and accomplishment during the period of
project.

- A. JAGADESHWARAN

9
 CONTENT
10
CHAPTER NO. LIST OF CONTENTS PAGE NO.
1 INTERNSHIP
13
Definition
13
Meaning of Internship
13
Types of Internship
14
Objectives of Internship
15
Purpose of Internship
16
Advantages of Internship

2 AUDITNG AND ASSURANCE

19
Meaning
19
Types of Audit
20
How an Audit conducted
21
Assurance
21
Objectives
22
Benefits
22
Conclusion

3 VOUCHING
23
Introduction
23
Definition
23
Points to be considered
25
Types of Vouchers
26
Screenshots of Vouchers

11
4 GOODS AND SERVICE TAX (GST)
29
Introduction
29
Features
32
Types of GST
33
Objectives and Benefits
34
Advantages and Disadvantages
35
GST Statistics
36
Filing of GST returns

5 TALLY
37
Meaning
37
Features
38
Editions
38
Accounting features in Tally
41
Some of the screen shots

6 SUMMARY AND CONCLUSION

47
Summary
48
Conclusion

12
 INTERNSHIP
Definition:
An internship is a period of work experience offered by an organization for a limited
period of time. Once confined to medical graduates, internship is used for a wide range of
placements in businesses, non-profit organizations and government agencies. It is the position of
a student or trainee who works in an organization, sometimes without pay, in order to gain work
experience or satisfy requirements for a qualification.

Meaning:
Typically, an internship consists of an exchange of services for experience between the
intern and the organization. Internships are used to determine if the intern still has an interest in
that field after the real-life experience. In addition, an internship can be used to create a
professional network that can assist with letters of recommendation or lead to future employment
opportunities. The benefit of bringing an intern into full-time employment is that they are already
familiar with the company, their position, and they typically need little to no training.
Internships provide current college students with the ability to participate in a field of their
choice to receive hands-on learning about a particular future career, preparing them for full-time
work following graduation.

Types:
Internships exist in a wide variety of industries and settings. An internship can be paid,
unpaid, or partially paid (in the form of a stipend). Internships may be part-time or full-time and
are usually flexible with students' schedules. A typical internship lasts between one and four
months, but can be shorter or longer, depending on the organization involved. The act of job
shadowing may also constitute interning.

Insights:

Many large corporations, particularly investment banks, have "insights" programs that
serve as a pre-internship event numbering a day to a week, either in person or virtually.

Paid internships:

Paid internships are common in professional fields including medicine, architecture,

science, engineering, law, business (especially accounting and finance), technology, and
advertising. Work experience internships usually occur during the second or third year of
schooling. This type of internship is to expand an intern's knowledge both in their school studies
and also at the company. The intern is expected to bring ideas and knowledge from school into
the company.

13
Work research, virtual research (graduation) or dissertation:

This is mostly done by students who are in their final year of school. With this kind of
internship, a student does research for a particular company. The company can have something
that they feel they need to improve, or the student can choose a topic in the company themselves.
The results of the research study will be put in a report and often will have to be presented.

Unpaid internships:

Unpaid internships are typically through non-profit charities and think tanks which often
have unpaid or volunteer positions. State law and state enforcement agencies may impose
requirements on unpaid internship programs under Minimum Wage Act. A program must meet
criteria to be properly classified as an unpaid internship.

Partially-paid internships:

Partially-paid internships are when students are paid in the form of a stipend. Stipends are
typically a fixed amount of money that is paid out on a regular basis. Usually, interns that are
paid with stipends are paid on a set schedule associated with the organization.

Another type of internship growing in popularity is the virtual internship, in which the
intern works remotely, and is not physically present at the job location. It provides the capacity
to gain job experience without the conventional requirement of being physically present in an
office. The internship is conducted via virtual means, such as phone, email, and web
communication. Virtual interns generally have the opportunity to work at their own pace.

Objectives:
A Trial Run:

One of the main objectives of an internship is to expose you to a particular job and a
profession or industry. While you might have an idea about what a job is like, you won’t know
until you actually perform it if it’s what you thought it was, if you have the training and skills to
do it and if it’s something you like. For example, you might think that advertising is a creative
process that involves coming up with slogans and fun campaigns. Taking an internship at an
advertising agency would help you find that advertising includes consumer demographic
research, focus groups, knowledge of a client’s pricing and distribution strategies, and media
research and buying.

Resume Building:

When you apply for jobs, the more experience and accomplishments you have, the more
attractive you’ll look to a potential employer. Just because you have an internship with a specific
title or well-known company doesn’t mean your internship will help you land a nice gig. Make
an impact where you work by asking for responsibility and looking for ways to achieve
accomplishments. Be willing to work more hours than you’re required and ask to work in
different departments to expand your skill set. Don’t just fetch coffee, make copies and sit in on
meetings, even if that’s all it will take to finish your internship.

14
Network Contacts:

Another benefit of an internship is developing business contacts. These people can help
you find a job later, act as references or help you with projects after you’re hired somewhere
else. Meet the people who have jobs you would like some day and ask them if you can take them
to lunch. Ask them how they started their careers, how they got to where they are now and if
they have any suggestions for you to improve your skills.

Potential Job:

If you like your internship, you have the opportunity to excel and possibly land a job with
the company. Employers have an easier time hiring a person they know because they can get a
feel for that person’s work ethic, skills, creativity, and ability to work with others and overall fit
with a company. Do more than you’re required to do, learn the office politics and make friends
with key people to increase your chances of landing a job with the company.

Assist the student's development of employer-valued skills such as teamwork,

communications and attention to detail.

Expose the student to the environment and expectations of performance on the part of
accountants in professional accounting practice, private/public companies or government
entities.

Enhance and/or expand the student's knowledge of a particular area(s) of accounting.

Expose the student to professional role models or mentors who will provide the student
with support in the early stages of the internship and provide an example of the behaviors
expected in the intern's workplace.

Most of our interns have little or no substantial accounting experience so objective #4

above is very important but not required. The accounting program is embedded in the
Department of Business which requires a minimum of 100 hours of the internship experience.

Purpose of an Internship:
An internship can help you gain skills that can be applied to future jobs. Internships may
be paid or unpaid, and they tend to last about the length of a school semester or a summer break.
If you are entering a new career, there are many benefits to completing an internship.

Test the Waters:

You can read books and take tests for years, but applying what you’ve learned is a whole
different ballgame. Completing an internship can help you apply what you’d studied but now are
applying to a real-world setting. Because you’ll be mentored by a seasoned professional during
your internship, you can see what the job is like and and you can gain insight into what a career
in that field entails.

15
 An internship also enables you to see what the work setting looks like, and if it’s a place
you can picture spending your career doing. If you’re going to have an internship at a news
station, you’ll be able to determine if you like the fast pace and busy atmosphere of television
news programming. If you’re interning at a research library, you may find the quiet, solitary
work makes for too long of a day.

If you’re not sure if a specific career is right for you, an internship can help you figure
that out. Likewise, it can also confirm that you’ve picked the right career path.

Gain Needed Experience:

Most employers want you to have some experience before they will hire you. If you’ve
never held a job, your resume may not appeal to many employers. Having an internship on your
resume gives you a chance to gain the needed experience and to build your resume.

Through an internship, you increase your knowledge and skills. Doing that gives you
greater confidence and a sense of accomplishment that future employers will be excited to see.
While you are completing your internship, you can also increase your communication,
organizational and teamwork skills, all of which will come in handy in future positions.

Make Helpful Connections:

The purpose of an internship is also to help you make useful connections. The person or
people who manage you during your internship may become mentors, who can provide helpful
information and who can help guide you during your career. You can use them as references for
future jobs, because they have seen you in action and they know your competencies.

In some cases, an internship can even lead to a permanent position. Many companies
bring on some of the interns they've used and hire them for full-time positions, provided they
have available positions. Once a company knows you and sees that you’re interested in a job and
you're skilled, they are more likely to hire you for their team.

You can do one or several internships to explore if a career is right for you. The more
internship you do, the more experience, skills, confidence and connections you gain. These can
all put you ahead of the curve when entering a job market, whether right out of school or when
switching careers.

Advantages of Internship:
1. Gain valuable work experience:
The hands-on work experience interns receive is invaluable and cannot be obtained in a
classroom setting, making this one of the most important benefits of internships. Interns have
the opportunity to apply acquired knowledge to real work experiences, witnessing firsthand the
day-to-day job duties they can expect to encounter in their chosen field. In addition to learning

16
the specialized skills of a particular field, transferable skills such as communication, teamwork,
and computer proficiency are also obtained in an internship, fully preparing interns to enter the
workforce upon graduation.
2. Explore a career path:
Exploring is an important part of the college experience, and internships are a great way
for students to acquaint themselves with the field they are interested in. Some students begin
college with a major or career path in mind, and end up changing their minds later on. Taking on
an internship while in college allows students to work in their desired field, helping them decide
if the field is right for them. By graduation, students who interned are more likely to feel
confident they chose the right degree.
3. Give yourself an edge in the job market:
One of the most important internship benefits is that college graduates who already have
some work experience in the form of an internship stand out to potential employers. Internship
experience makes a college grad more marketable as they usually require less training and can
handle more responsibilities. You may also receive a higher starting salary than those who do not
have internship experience and are entering the workforce or starting a new career.
4. Develop and refine skills:
You can learn a lot about your strengths and weaknesses during an internship. Internships
allow for feedback from supervisors and others who are established in the field, and offer a
unique learning opportunity that you may not have again as a working adult. Embrace the
mistakes you make as an intern and the many things that you won’t know. Ask questions,
observe, and take risks to get the most out of your internship training experience.
5. Receive financial compensation:
Much internship are paid which means you can gain valuable work experience and make
money at the same time. A paid internship will provide money to fund your college tuition and
expenses.
6. Network with professionals in the field:
In the working world, it’s all about who you know. As an intern, you will be surrounded

17
by professionals in the industry. Internships are more than just about earning credit, getting a
grade, or making money; internships provide an opportunity to learn from the people around you,
ask questions, and impress. The professionals you encounter during an internship can be your
future colleagues or the connection to your first job.
7. Gain confidence:
Internships allow you to test out specific techniques learned in the classroom before
entering the working world. It’s an opportunity to apply what you have learned in a safe
environment where mistakes are expected – rather than learn the hard way in your first job out of
college.
8. Transition into a job:
Many companies use internships as a way to enhance their recruitment efforts. In some
cases, a company may decide to hire an intern at the end of the assignment. Even if a job offer
doesn’t happen right away, an intern who makes a favorable impression could receive an offer
down the line when an opening occurs. It’s a way for companies to test out an employee before
committing to hiring them.

18
 Auditing and Assurance
Meaning:

An audit is a systematic review and assessment of information or documents.

There are a few different types of audit but, in the specific context of professional services, an
audit is usually financial. It is intended to provide reasonable assurance, but not absolute
assurance, that the financial statements give a true and fair view in accordance with the financial
reporting framework.
Not all companies are required by law to have audits. Many companies who do not
require audits by law opt to have their financial information assured independently, usually by
accountancy firms.
Assurance is a professional service with the aim of improving the quality and
transparency of information, to reduce the chance of problems occurring from incorrect
information. An audit is a type of assurance service.
Assurance services can be regulatory or compliance-based. They work to ensure that a
company or organization is following guidelines, rules and policy, and provide both internal and
external confidence for financial statements.
Types of Audit:
In addition to financial audits, there are also operational audits and compliance audits.

 Financial Audit – The most commonly conducted type of audit; a financial audit is an
official retrospective inspection of an organization’s financial accounts, typically by an
independent body. It will offer an opinion on whether the accounts have been properly
prepared and whether they show a true and fair view of the company or organization’s
financial position.

 Compliance Audit – A compliance audit is to ensure that the business or organization is

acting in compliance with regulatory or internal standards, and is commonly carried out
in regulated industries.

 Operational Audit – This is a detailed analysis of procedure, planning, processes, goals

and results of the operations of a business, with recommendations for improvement.

All audits can either be internal or external:

 Internal Audit – A company often wishes to maintain a high standard of control inside the
organisation and wants to reduce the amount of work done by external auditors.

An internal audit is often an operational audit. An internal audit could also be a financial

19
 or compliance audit carried out in preparation for an external audit.

 External Audit – An external audit is when an independent firm comes into a business
and performs audit work on behalf of the company or its shareholders. Firms such as
PricewaterhouseCoopers (PwC), Deloitte, KPMG and Ernst & Young (EY) are examples
of external auditors.
External auditors usually carry out financial audits or compliance audits.

How is Audit Conducted?

An audit is usually carried out by a registered auditor and must comply with certain
standards.
In preparation for a financial audit, the company or organization’s financial report is
prepared in accordance with the appropriate legal and financial requirements. The report is then
approved internally.
The auditors will need an overview and understanding of the company and the
company’s activities and to consider outside factors which may have affected any business
during the reporting period.
The auditors will identify, consider and assess any risks relating to the financial
performance or position, and any internal controls the organisation has deemed appropriate to
mitigate those risks.
The auditor will then consider what has been done to ensure the financial report is
accurate and examine supporting evidence based on the risks and controls identified.
Each individual line in a set of published accounts needs to be tested. Auditors do not test
every transaction that led to that figure. Rather they perform two kinds of testing:

 Substantive Testing. Here an auditor will select a sample of transactions that go to

produce a certain figure. For example, if an auditor is testing the sales figure, they might
select a number of sales and ask to see evidence of these sales. This might be copies of
cheques, purchase orders or correspondence/contracts with customers. Auditors will test
enough of these until they feel comfortable that the sales figure is correct.

 Control Testing. A process in a company which is designed to reduce the risk of error or
fraud. A good example is the requirement for two signatories on payments, one person
fills in the cheque and the second person signs it.

In companies where good controls exist, auditors can test the control rather than a sample
of transactions. If they are satisfied that the control works effectively they will be
comfortable with the final figure. For example, if customers purchase through a website
then the sales figure may be generated by a computer and the auditors may be
comfortable with this.

20
 At the end of the audit, an audit opinion is produced in a standard report included with the
financial statements. The auditor will also communicate any internal weaknesses to the company
or organization’s management.
What is Assurance?
Assurance is the process of analyzing and used in the assessment of accounting
entries and financial records. Assurance is the process of verifying the records available in the
company’s accounting record is as per accounting standard and principle, and it also confirms
that accounting record is accurate or not. Assurance is the assessing process, operations,
procedure, etc. The main aim of assurance is to check the accuracy of financial reports. It also
assures all the stakeholders that there is no misrepresentation done in financial records, no
misuse of funds, no fraud, and no fraudulent activities done in a company or done by the
company. Assurance check financial reports are as per accounting standard and accounting
principle. Assurance is applied to assess the process, the procedure, and operations, and these
processes, procedures, systems are observed closely to assure the process is right, and it gives
optimum results. Assurance specializes in assessing and improving the quality of the information
in a company. It helps in decision making in an organization as it works on customer
feedback, financial information, employee feedback, or areas where information is very much
required in decision making in an organization.

Objectives:
The main objective of an assurance engagement is to let the professional and independent
audit firms perform their works and express their opinion based on the level of assurance that
they are engaging in.
There are two common levels of assurance engagements that audit firms normally offer
and provide. First is the reasonable assurance and second is limited assurance engagement.
Reasonable assurance normally express in the positive form. It is sometimes called positive
assurance.
This type of assurance engagement expresses their opinion that reduces the assurance
engagement risks to the acceptable low level for the subject matter that the firm being expressed
on.
For example, an audit on financial statements is an example of the reasonable assurance
engagement. Auditors will express their opinion based on the result of their examination. Those
opinions will be based on a positive form.
Limited assurance engagement is normally express in the negative form and the best
example for these types of assurance would be the review of financial statements engagements.
To explain this, for example, the entity borrows a certain amount of loan form the bank.
The bank approves the loan and as part of its requirement, the entity needs to submit their
quarterly financial statements to the bank. Those financial statements need to be review by the
qualified auditor.
In this case, the entity needs to engage with the qualified auditors to review its financial
statements.

21
 And this kind of engagement is called limited engagement. The opinion that the audit
would express for this kind of engagement is in negative form.

Benefits:
•a closer look at a business through the eyes of a skilled business professional
•ensures users are more confident that the information presented to them is reliable
•gives more credibility to business reporting processes
•facilitates the running and management of the business
•advice and recommendations will be given during the process
•improves business processes
•aids the process of obtaining finance
•assists management in understanding and reducing business risks
•better controls can increase profit
•gives more confidence in internal controls
•More valid conclusions can be drawn from the accounts

Conclusion:
Audit and assurance work hand in hand if it is a statutory audit. A statutory audit is a type
of assurance service regarding the accuracy of financial statements. However, audit procedures
such as risk assessment and analysis of internal controls of the company come under assurance
services.

VOUCHING

22
Introduction
Vouching is a technical term, which refers to the inspection of documentary evidence
supporting and substantiating a transaction, by an auditor. Vouching can be described as the
essence or backbone of auditing. The success of an audit depends on the thoroughness with
which vouching is done. After entering in all vouchers, only then can auditing start. Vouching is
defined as the "verification of entries in the books of account by examination of documentary
evidence or vouchers, such as invoices, debit and credit notes, statements, receipts, etc.

Definition
According to RONALD A. IRISH: “Vouching is a technical term, which refers to the
inspection of documentary evidence supporting and substantiating a transaction”

Points to be considered in Vouching:

● Serial number: The auditor should see that the vouchers are consecutively numbered

according to date and the order of transactions. If this is not done then the auditor’s time
would be unnecessarily wasted in finding out required vouchers.

● Date: The auditor should carefully check the dates on vouchers. The vouchers should

relate only to the year for which the accounts are audited. Otherwise the vouchers of
earlier year may be produced again and cash or goods might be misappropriated.

● Name: The vouchers should be in the name of client. The transactions recorded in the

books of a client would be correct only if they are supported by bills, documents and
other evidences in the name of that particular client. The name of the party from whom
the voucher is received should be compared with the name of supplier in the books of
accounts.

● Address: The voucher should be addressed to the client in whose books the transaction is

recorded. If the voucher is in the personal name of director, partner, or manager, the same
may not be relating to business itself.

23
● Amount: The amount shown in the voucher should tally with the amount recorded in the

books of accounts. The amount in voucher should be indicated both in figures and in
words, so that the alterations in figures can be avoided.

● Particulars: The auditor should carefully examine the particulars mentioned in the

voucher. From the particulars given in the vouchers, auditor is able to ascertain whether
the item is of a revenue or capital nature. This distinction is of great importance, since the
capital income and expenditure are shown in the Balance Sheet whereas revenue income
and expenditure are shown in Profit and Loss Account.

● Approval and Signature: Each voucher should be properly approved and authenticated.

The person who authorizes payment or other transaction should put his signature in
support of having approved the voucher. The auditor should have with him specimen
signature of various officers, with schedule of their powers.

● Revenue stamp: For payments exceeding RS. 5000/- the relative receipts should bear

revenue stamp of Re. 1.00. However, where the items are purchased for cash and a cash-
memo is obtained, there is no need to obtain stamped receipt.

● Continuous vouching: As far as possible the auditor should complete the vouching of a

particular period of a book in single sitting. If the vouching is kept pending or

incomplete, then there are chances of figures being altered and a fraud being committed
after the vouching is over.

● Cancelling the voucher: Once the voucher is audited, the same should be cancelled so

that it may not be produced again. Rubber stamp, Seal or Ticks of particular color is used
to cancel the voucher.

● Period: The auditor should pay particular attention to the period to which the voucher

relates. If the expenditure is for the period beyond the accounting year of client, the
proportionate amount of expenditure should be debited to prepaid expense accounts.
Similarly, from verification of period, the auditor gets an idea about income received in

24
 advance, income due but not received for which correct adjusting entries should have
been passed.

● Entry in the books of accounts: While examining vouchers, the auditor should see that

correct entry is passed in the books of accounts and he should see that there is no voucher
which is left to be recorded in the books of accounts. Moreover, as per details of voucher,
correct classification of revenue and capital is done.

● List of Missing Vouchers: After vouching is over, the auditor should go through the

relevant books or register and find out the un-ticked items. The items may not be ticked
for want of vouchers. The auditor should prepare a list of missing vouchers and ask the
person concerned to obtain the same. If he does not get the vouchers within reasonable
time or if he has not offered satisfactory explanation about missing vouchers, he should
mention the facts in his report. In several types of expenses vouchers are not received e.g.
Tea and breakfast, cartage.
The types of documentation include:
Requirements: Statements that identify attributes, capabilities, characteristics, or qualities
of a system. This is the foundation for what will be or has been implemented

Voucher Types
There are 18 vouchers already created in Tally software, which is divided into two parts:
1. Accounting Vouchers
2. Inventory Vouchers.

Accounting vouchers
Accounting vouchers in tally are used to record the financial transactions. Examples of these
vouchers include contra, payment, receipt, journal, sales, purchase etc. While inventory vouchers
in tally used to maintain the record related to inventory. Examples of such vouchers are purchase
order, sale order, rejection in, rejection out, dely note, receipt note, physical stock etc.

Inventory Voucher
Inventory Vouchers perform the function in the inventory system that accounting
vouchers do in the accounting system. Inventory Vouchers are also means of entering

25
transactions. Accounting vouchers will update only Accounts, but Inventory vouchers will
update both Accounts and Inventory. Inventory vouchers record the receipt and issue of
goods/stock (Movement of goods), the transfer of stock between locations and physical stock
adjustments

Accounting Vouchers
 Payment voucher
 Receipt voucher
 Sales voucher
 Purchase voucher

Payment Voucher
Gate way of tally. ERP> accounting vouchers > f5: payment display the payment voucher

26
Receipt Voucher:

Gate way of tally. ERP > accounting vouchers > f6: receipt display the receipt voucher.

27
Sales Voucher:
Gate way of tally. ERP9

28
RP> accounting voucher > F8: sales display the sales voucher.

Goods and Service Tax (GST)

Introduction:
Goods and Services Tax (GST) is an indirect tax (or consumption tax) used in India on
the supply of goods and services. It is a comprehensive, multistage, destination-based tax:
comprehensive because it has subsumed almost all the indirect taxes except a few state taxes.
Multi-staged as it is, the GST is imposed at every step in the production process, but is meant to
be refunded to all parties in the various stages of production other than the final consumer and as

29
a destination-based tax, it is collected from point of consumption and not point of origin like
previous taxes.
Goods and services are divided into five different tax slabs for collection of tax - 0%, 5%,
12%, 18% and 28%. However, petroleum products, alcoholic drinks, and electricity are not taxed
under GST and instead are taxed separately by the individual state governments, as per the
previous tax system. There is a special rate of 0.25% on rough precious and semi-precious stones
and 3% on gold.[1] In addition a cess of 22% or other rates on top of 28% GST applies on few
items like aerated drinks, luxury cars and tobacco products. Pre-GST, the statutory tax rate for
most goods was about 26.5%, Post-GST; most goods are expected to be in the 18% tax range.
The tax came into effect from 1 July 2017 through the implementation of the One
Hundred and First Amendment of the Constitution of India by the Indian government. The GST
replaced existing multiple taxes levied by the central and state governments.
Salient features of GST:
 (i)GST is applicable on ‘supply’ of goods or services as against the present concept on
the manufacture of goods or on sale of goods or on provision of services.

 (ii) GST is based on the principle of destination-based consumption taxation as against

the present principle of origin-based taxation.

 (iii) It is a dual GST with the Centre and the States simultaneously levying tax on a
common base. GST to be levied by the Centre would be called Central GST (CGST) and
that to be levied by the States would be called State GST (SGST).

 (iv) An Integrated GST (IGST) would be levied an inter-state supply (including stock
transfers) of goods or services. This shall be levied and collected by the Government of
India and such tax shall be apportioned between the Union and the States in the manner
as may be provided by Parliament by Law on the recommendation of the GST Council.

 (v) Import of goods or services would be treated as inter-state supplies and would be
subject to IGST in addition to the applicable customs duties.

 (vi) CGST, SGST & IGST would be levied at rates to be mutually agreed upon by the
Centre and the States. The rates would be notified on the recommendation of the GST
Council. In a recent meeting, the GST Council has decided that GST would be levied at
four rates viz. 5%, 12%, 16% and 28%. The schedule or list of items that would fall
under each of these slabs has been worked out. In addition to these rates, a cess would be
imposed on “demerit” goods to raise resources for providing compensation to States as
States may lose revenue owing to the implementation of GST.

 (vii) GST would replace the following taxes currently levied and collected by the
Centre:-

30
  a) Central Excise Duty

 b) Duties of Excise (Medicinal and Toilet Preparations)

 c) Additional Duties of Excise (Goods of Special Importance)

 d) Additional Duties of Excise (Textiles and Textile Products)

 e) Additional Duties of Customs (commonly known as CVD)

 f) Special Additional Duty of Customs(SAD)

 g) Service Tax

 h) Cesses and surcharge in so far as they relate to supply of goods and services.

 (viii) State taxes that would be subsumed within the GST are:-
 a) State VAT

 b) Central Sates Tax

 c) Purchase Tax

 d) Luxury Tax

 e) Entry Tax (All forms)

 f) Entertainment Tax and Amusement Tax (except those levied by the local
bodies)

 g) Taxes on advertisements

 h) Taxes on lotteries, betting and gambling

 i) State cesses and surcharges in so far as they relate to supply of goods and
services.

31
 (ix) GST would apply on all goods and services except Alcohol for human consumption.

 (x) GST on five specified petroleum products (Crude, Petrol, Diesel, and ATF & Natural
Gas) would by applicable from a date to be recommended by the GSTC.

 (xi) Tobacco and tobacco products would be subject to GST. In addition, the Centre
would have the power to levy Central Excise duty on these products.

 (xii) A common threshold exemption would apply to both CGST and SGST. Tax payers
with an annual turnover not exceeding Rs.20 lakh (Rs.10 Lakh for special category
States) would be exempt from GST. For small taxpayers with an aggregate turnover in a
financial year up to 50 lakhs, a composition scheme is available. Under the scheme a
taxpayer shall pay tax as a percentage of his turnover in a State during the year without
benefit of Input Tax Credit. This scheme will be optional.

 (xiii) The list of exempted goods and services would be kept to a minimum and it would
be harmonized for the Centre and the States as well as across States as far as possible.

 (xiv) Exports would be zero-rated supplies. Thus, goods or services that are exported
would not suffer input taxes or taxes on finished products.

 (xv) Credit of CGST paid on inputs may be used only for paying CGST on the output and
the credit of SGST paid on inputs may be used only for paying SGST. Input Tax Credit
(ITC) of CGST cannot be used for payment of SGST and vice versa. In other words, the
two streams of Input Tax Credit (ITC) cannot be cross-utilized, except in specified
circumstances of inter-state supplies for payment of IGST
 a) ITC of CGST allowed for payment of CGST & IGST in that order;
 b) ITC of SGST allowed for payment of SGST & IGST in that order;
 c) ITC of IGST allowed for payment of IGST, CGST & SGST in that order.

 (xvi) Accounts would be settled periodically between the Centre and the States to ensure
that the credit of SGST used for payment of IGST is transferred by the Exporting State to
the Centre. Similarly, IGST used for payment of SGST would be transferred by the
Centre to the Importing State. Further, the SGST portion of IGST collected on B2C
supplies would also be transferred by the Centre to the destination State. The transfer of
funds would be carried out on the basis of information contained in the returns filed by
the taxpayers
 (xvii) The laws, regulations and procedures for levy and collection of CGST and SGST
would be harmonized to the extent possible.

32
 The whole GST system will be backed by a robust IT system. In this regard, Goods and
Services Tax Network (GSTN) has been set up by the Government. It will provide front end
services and will also develop back end IT modules for States who opted for the same.

The types of GST:

CGST (Central Goods and Services Tax): The tax is collected by the central government
on the intrastate sale of goods and services.
SGST (State Goods and Services Tax): The state government collects this tax based on
the intrastate supply of services and products.
IGST (Integrated Goods and Services Tax): The tax is charged on the supply of products
and services between two states. The taxes are shared between the central and state governments.

Objectives of GST:
 The foremost objective of GST is to create a common market with uniform tax rate in
India. (One Nation, One Tax, One Market)
 To eliminate the cascading effect of taxes, GST allows set-off of prior taxes for the same
transactions as input tax credit.

33
  To boost Indian exports, the GST already collected on the inputs will be refunded and
thus there will be no tax on all exports.
 To increase the tax base by bringing more number of tax payers and increase tax revenue.
 To simplify tax return procedures through common forms and avoidance of visiting tax
departments.
 To provide online facilities for payment of taxes and submission of forms. Goods and
Services Network (GSTN), a robust Information Technology system has been created for
the operation of GST.

Benefits of GST:

A. To the Society and country

 Unified common national market will attract more foreign investment. GST has
integrated the economy of all States and Union Territories.
 It brings parity in taxation among imported goods and Indian manufactured goods. All
imported goods will be charged with IGST which will be more or less equivalent to the
total of CGST and SGST levied on manufactured goods. Removal of several taxes will
make the price of Indian products more competitive at world market.
 It will boost manufacturing, export, GDP leading to economic growth through increase in
economic activity.
 Creation of more employment opportunities which will result in poverty eradication.
 It will bring more tax compliance (more tax payers) and increase revenue to the
Governments.
 It is transparent and will improve India’s ranking in the ‘Ease of Doing Business’ in the
world.
 Uniform rates of tax will reduce tax evasion and rate arbitrage between States.

B. Business Community:

 Simpler Tax System with fewer exemptions. 17 taxes were abolished and one tax exists
today.
 Input tax credit will reduce cascading effect of taxes. Reduction in average tax burden
will encourage manufacturers and help “Make in India” campaign and make India as a
manufacturing hub.
 Common procedures, common classification of goods and services and timelines will
lend greater certainty to taxation system.
 GSTN facility will reduce multiple records keeping, lesser investment in manpower and
resources and improve efficiency.

34
  All interactions will be through common GSTN portal and will ensure corruption free
administration.
 Uniform prices throughout the country. Expansion of business to all states is made easy.

C. To Consumers:

 Input tax credit allowed will lower the prices to the consumers.
 All small retailers will get exemption and purchases from them will cost less for the
consumers.

Advantages of GST:

 GST eliminates the cascading effect of tax

 Higher threshold for registration
 Composition scheme for small businesses
 Simple and easy online procedure
 The number of compliances is lesser
 Defined treatment for E-commerce operators
 Improved efficiency of logistics
 Unorganized sector is regulated under GST

Disadvantages of GST:

 Increased costs due to software purchase

 Being GST-compliant
 GST will mean an increase in operational costs
 GST came into effect in the middle of the financial year
 GST is an online taxation system
 SMEs will have a higher tax burden

Delayed IGST refund has hit Exporters and caused a slowdown:

Although efforts are being made by the department towards timely sanctioning of refund,
yet over a few months, we can expect a slowdown in the Export sector in India.

Sentiments around claiming of Input Tax Credit:

Admission of ITC is currently being allowed on a provisional basis to the recipient of the
credit. Authorities are in process of reconciliation between Different GST returns and hence,
many taxpayers are receiving mismatch notices for ITC claimed as per GSTR-3B and allowed as
per GSTR-2A supplier data. Development of recon tools on the GST portal will help a buyer be
cautioned before claiming any wrong ITC, thus avoiding the interest or penalties that follow.

35
Statistics:
The collection of GST amounts for the financial year 2018-2019 and 2019-2020 are as
follows:

How to file GST return online:

Step-1: Visit the GST portal (www.gst.gov.in).
Step-2: A 15-digit GST identification number will be issued based on your state
code and PAN number.
Step-3: Upload invoices on the GST portal or the software. An invoice reference
number will be issued against each invoice.
Step-4: After uploading invoices, outward return, inward return, and cumulative monthly
return have to be filed online.
Step-5: File the outward supply returns in GSTR-1 form through the information section
at the GST Common Portal (GSTN) on or before the 10th of the following month.
Step-6: If there are any errors, you have the option to correct it and refile the returns.

List of GST returns:

 GSTR-1 - The registered taxable supplier should file details of outward supplies of
taxable goods and services as affected.

36
  GSTR-2 - The registered taxable recipient should file details of inward supplies of
taxable goods and services claiming the input tax credit (Currently Filing facility of
GSTR-2 is not available on the portal).
 GSTR-3B - The registered taxable person should file the monthly return on the basis of
finalization of Summarized details of outward supplies & inward supplies plus the
payment of an amount of tax.
 GSTR-4 (CMP 08) - Composition supplier should file the quarterly return for depositing
the payment.
 GSTR-5 - Return for the non-resident taxable foreign taxpayer.
 GSTR-5A - Return for the OIDAR.
 GSTR-6 - Return for input service distributor.
 GSTR-7 - Return for authorities carrying out tax deduction at source.
 GSTR-8 - E-commerce operator or tax collector should file details of supplies effected
and the amount of tax collected.
 GSTR-9 - The registered regular taxpayer should file an annual return.
 GSTR-9A - The composition traders should file an annual return.
 GSTR-9C - Turnover above 2 crores (Regular Taxpayers) in a Particular FY.
 GSTR-10 - The taxable person whose registration has been canceled or surrendered
should file the final return.
 GSTR-11 - The person having UIN claiming the refund should file details of inward
supplies.

TALLY
What is Tally?

37
 Tally is an ERP accounting software package used for recording day to day business data
of a company. The latest version of Tally is Tally ERP 9.Tally ERP 9 Software is one acclaimed
financial accounting system and inventory management system with power computer.
Tally.ERP 9 is one best accounting software that can integrated with other business applications
such as Sales, finance, Purchasing, Payroll, Inventory, etc. Tally software stores all the business
transactions of each account in detail. Tally ERP 9 follows double entry accounting system and
hence eliminates and rectifies possible errors.

Features of tally:

 Tally ERP 9 supports multi languages, so it is called as multi-lingual tally software.

Accounts can be maintained in one language and reports can be viewed in another
language.
 You can create and maintain accounts up to 99,999 companies.
 Using payroll feature, you can automate employee records management.
 Tally has feature of synchronization, the transactions maintained in multiple locations
offices can be automatically updated.
 Generate consolidated financial statements as per requirements of company.
 Managing single and multiple groups are very important features of tally.

Editions:

38
 Tally.ERP 9 is available in Silver & Gold editions. Silver edition is for a single user,
while Gold is for unlimited users on a Local Area Network (LAN). All capabilities and features
are available in every edition.
Tally.ERP 9 Silver can be activated (as in licensed) on one computer and used from that
same computer. Tally.ERP 9 Gold can be activated on one computer and accessed from any or
all computers on that network.
Tally.ERP 9 both Silver & Gold can also be accessed remotely through a feature called
Remote Access. With the latest Tally.ERP 9 Release 6.6 users can access certain MIS Reports on
the web browser.
Reports of Tally.ERP9 can also be viewed and analyzed on a smartphone (Android/iOS)
with Tally on Mobile App. This is Tally Solutions Pvt Ltd approved third party app with
amazing features. With this app, anyone can also create a sales voucher, purchase voucher, order
voucher, receipt voucher, payment voucher from Mobile.
A new era began in November 2020, when Tally Solutions Pvt Ltd launches next-
gen business management software Tally Prime. Tally Prime came with a new interface and
several other additions to the existing features

What are the accounting features in Tally?

Accounting features in Tally is one of the important categories of company features that
consists of several configurations and functionalities used for accounting transactions and
reports. Accounting features can be opened by pressing function key F11 or click on the option
F11: Features (available at button toolbar)
Accounting features is further divided in to 6 sections:
1. General
2. Outstanding Management
3. Cost/ Profit Centre Management
4. Invoicing
5. Budgets/ Scenarios Management
6. Other Features

How to open Accounting Features:

To open accounting features in Tally ERP 9, use any one of the following method.
 Path: Tally Main > Gateway of Tally > F11: Features > Accounting Features
 Function key: F1: Accounts (Press function key F1 from your keyword)
The following screen displays after executing the accounting features in Tally

39
General:
 Maintain Accounts Only: Choose this option, if you are maintaining inventory
transactions
 Integrate accounts and inventory: Choose Yes option to include stock or inventory
balances from inventory records.
 Use income and expense a/c instead of profit & loss a/c: Choose this option to display the
income and expenses accounts as menu instead of profit & loss account.
 Enable Multi Currency: Choose this option to work company with multi currencies.

Outstanding Management:
 Maintain bill-wise details
 For non-trading accounts also
 Activate interest calculation
 Use advanced parameters

Cost / Profit center management:

 Maintain Payroll
 Maintain cost centers
 User cost center of job costing
 More than one payroll/cost category
 Use predefined cost centers allocation in transactions
 Show opening balance for revenue items in reports

Invoicing:
 Enable Invoicing
 Record purchases in invoice mode
 Use debit and credit notes
 Record credit notes in invoice mode
 Record debit notes in invoice mode

40
Budgets and Scenarios Management
 Maintain budgets and control
 Use reversing journals and optional vouchers

Banking
 Enable cheque printing
 Set/alter transaction type
 Set/alter banking features
 Set/alter postdated transaction features

Other Features
 Enabled zero valued transactions
 Maintain multiple mailing details for company and ledgers
 Enable company logo
 Mark changed vouchers

After enabling all the required accounting features for company, press enter or ctrl + A to save
the configured details in Tally ERP 9.

41
TALLY- ERP 9 SAMPLE SCREENSHOTS

GATEWAY OF TALLY

42
 CREATION OF COMPANY

CONTRA VOUCHERS (F4)

43
PAYMENT VOUCHER (F5)

RECEIPT VOUCHER (F6)

44
JOURNAL VOUCHER (F7)

SALESVOUCHER (F8)

45
PURCHASE VOUCHER (F9)

PROFIT&LOSSACCOUNT

46
BALANCE SHEET

47
 Summary and Conclusion
Summary:
Throughout the report we have seen about various topics like internship, auditing and
documentation types like excel, examination of documentary evidences i.e. vouching, usage of
tally, GST and about Auditing and Assurance. It shows us that accounting and information
technology needs integration always so that the work can be performed well. It also shows us
that certain necessary upgrades needed to be adopted.

CHAPTER-1:
In first we have discussed about internship and its meaning and how the internship is
useful for the students in obtaining jobs and how they can be able to improve their practical
knowledge. And we have seen about the objectives and advantages of internship.

CHAPTER-2:

In Auditing and Assurance we learned how an audit is conducted and meaning of Audit
and its objectives and importance of audit in a company. And we have also seen the meaning,
objectives and benefits of assurance.

CHAPTER-3:
Vouching is the most important process in an auditing. In this we have seen the types and
points to be noted during vouching and how vouching are important in auditing and some of the
screenshots of the vouchers.

CHAPTER-4:
GST is the most important change in the Indian economy, in that we have learned the
GST levels of products and benefits and disadvantages of gst, types and its objectives and how to
file the GST returns.

CHAPTER-5:
In the topic Tally we have seen its meaning, features and the development of tally from
its origin, accounting features of tally, and I have also displayed some of the screenshots of the
tally.

48
CONCLUSION:

On the whole, this internship was a useful experience. I have gained new knowledge, skills
and meet many new people and to make good repo with the unknown people. I achieved several
of my learning goals and I have gained some practical experience in auditing. From this
internship and time management I had to learn how to motivate myself through being in the
office for so many hours. This was the excellent experience and I hope that other interns got as
much out of it. It would be better that the knowledge level of the language is sufficient to
contribute fully to project.

***

49