Audit Tax Project

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Audit tax project
Services Marketing (S. P. Jain Institute of Management and Research)
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SCHOOL OF MANAGEMENT STUDIES

[BBA]
A PROJECT REPORT
ON
“A STUDY OF AUDIT AND TAX OF KRISHNA ASSOCIATES”
UNDER THE GUIDANCE OF

Prof. MARIA BOALER
B
Y
SHEETAL ARORA
R19BM601
BBA (HONORS) VI-SEM
JUNE2022
RUKMINI KNOWLEDGE PARK, KATTIGENAHALLI,

YELAHANKA,
BENGALURU-560064

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DECLARATION
I, Ms. Sheetal Arora student of BBA(HONS), belong into School of
Management Studies, Reva University, declare that this Project Report/
Dissertation entitled “ A Study of Audit and Tax of Krishna Associates” is the
result of project/ dissertation work done by me under the supervision of Dr/
Prof. Maria Boaler and co-guider(s) if any, with affiliation, at Reva University
School of Management Studies
I am submitting this project report/ Dissertation in partial fulfillment of the
requirements for the award of the degree of BBA(HONS) in <Name of sbject>
by the REVA UNIVERSITY, Bangalore during the academic year 2019-22.
I declare that this project report has been tested for plagiarism, and has passed
the plagiarism test with the similarity score less than 25% and it satisfies the
academic requirements in respect of project work prescribed for the said
degree.
I further declare that this project/ dissertation report or any part of it has not
been submitted for award of any other degree/ Diploma of this University or
any other University/ Institution.
(Signature of the candidate)

Signed by me on <date, month and year>
Certified that this project work submitted by Sheetal Arora has been carreid
out under my/ our guidance and the declaration made by the candidate is true
to the best of my knowlwdge.
Signature of Guide
Date: …………………
Signature of Director of School
Date: ………………
Official Seal of the School

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SCHOOL OF MANAGEMENT STUIDES

CERTIFICATE
Certified that the project work entitled A STUDY OF AUDIT AND TAX OF
KRISHNA ASSOCIATES carried out under my/ our guidance by SHEETAL ARORA,
R19BM601, a bonafide student of Reva University during the academic year
2021-22, is submitting the project report in partial fulfillment for the award of
Bachelor of Business Administration in BBA (HONOURS) during the academic
year 2019-22. The project report has been tested for plagiarism, and has
passed the plagiarism test with the similarity score less than 25%. The project
report has been approved as it satisfies the academic requirements in report of
project work prescribed for the said Degree.
Signature with date Signature with date

Prof. Maria Boaler Dr. Nitu Ghosh
Guide Director
External Examiner
Name of the Examiner with affiliation Signature with date
1.
2.

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ACKNOWLEDGEMENT
This is a matter of pleasure for me to acknowledge my deep sense of gratitude

to REVA UNIVERSITY and my college, School of Management Studies for giving
me an opportunity to explore my abilities via this internship program.
I would like to express my sincere gratitude to our internship guide Prof. Maria
Boaler for her valuable guidance and advice in completing this organization
study.
Let me take this opportunity to thank School Director, Dr. Nitu Ghosh A for the
whole hearted support extended to me throughout the conduct of the study.
Madam gave me lot of inputs and suggestions to bring out the best in me. The
encouraging words that have been extended were great boost for the
completion of this work.
I would like to record my sincere appreciation and gratitude towards all the
officials and employees of KRISHNA ASSOCIATES, without whose kind
assistance, my internship program would not have succeeded.
I am also very thankful and grateful towards my seniors, colleagues and

authorities of School of Management Studies, REVA UNIVERSITY for their
support, encouragement, and valuable suggestions for the completion of this
organization study.
Last but not the least, I would like to express my sincere thanks to my family
members, friends for their immense support and best wishes through-out the
internship duration and the preparation of this report.
Sheetal Arora
Place: Bangalore
Date:

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S. NO. TABLE OF CONTENT PAGE NO.

Executive Summary 6-8
1 Introduction
- About firm summary
- What is audit? And its types
9-16
- What is tax audit? and its importance
- Who cannot be tax auditor?
- Effectiveness of tax audit
- Typical and relevant records
- Section and its regulations
2 Industry and Company Profile

- Service provided
- GDP Contribution
17-27
- Growth development
- SWOT analysis
- CSR of company
- Future prospects/growth
- Summary of future challenge
3 Research Methodology
- Literature review
- Objectives
28-35
- Limitations
- Nature and scope
- Tax hypothesis
- Statement of hypothesis
- Conclusion and recommendations

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Chapter Scheme
Executive Summary
The complexity of law doesn’t allow every individual to understand

the guidelines and policies drafted and implemented by the
Government. These laws are written to maintain social and economic
equality.
All the government departments have their own base which they
operate on, an ACT providing guidance read with a set of rules is that
base for them.
Every department whether it is Justice Department, Admin
Department, Tax Authorities, Labor Department etc. have their own
set of rules which are meant to be followed by the citizens of the
country.
Keeping everything aside and focusing more toward the economic
growth, there are Laws which governs the Taxation Policies, Business
Rules, and Labor Protection.
Since these laws are complex and not easy to be understood by a lay
man on an easy note there are professionals who guide the business
men and other individuals.
Whether you are a small business or a complex organization, keeping
track of all your financial activities can be a daunting task. And
accounting does just that for you by keeping track of your business.
It reliably records every aspect of financial activities taking place,
which is a crucial piece of information for the management of your
company. One key function of accounting is keeping you updated
about the company’s performance.

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This helps in identifying the areas of underperformance and those

that require corrective measures. The information derived from
accounting assist in the long term project planning of the business as
well.
 AUDIT REPORT
An audit report is to be prepared after an audit is
conducted. The purpose of the report is to report what has
been seen and the evaluated result. The contents of the report
are very important as it is the record of the audit that has been
performed.
 TYPES OF AUDIT REPORT:

There are four types of Audit Report:
1. Unqualified Opinion
This type of audit report is prepared when after the auditing the
auditor finds that the records and the documents were free of
misrepresentation. It is also prepared when the auditor finds that
everything, the process, functioning, and the system were in
accordance with the guidelines and the principles.
2. Qualified Opinion
This type of report is formulated by the auditor when the reports are
not maintained as per the set guidelines but there was no
misrepresentation found in the documents and the report. The
writing is similar to the unqualified ones but with an additional
paragraph explaining the reason why the report is not unqualified.

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3. Adverse Opinion
This is the worst kind of report that an auditor can issue about the
company or an organization. In this report, the auditor mentions that
the records and the documents and not maintained and are also
misrepresented. This kind of report indicates fraud.
4. Disclaimer of Opinion
There are occasions when an auditor is unable to complete the
report on the audit he conducted. The report that is presented is not
accurate. There can be various reasons for that. In cases like this, the
auditor issues a disclaimer of opinion which states that the auditor
was unable to determine the status of the whole audit that was
conducted. That means he was unable to find any result or
conclusion.
 AUDIT EXECUTIVE
An audit executive summary is an important part of any
audit report. This document or the section of the report is prepared
at the end of the formulation of the report but mentioned on the
first page of the report. The idea behind preparing the summary is to
give the reader a brief idea about the main content.
Therefore the executive summary is an imperative section to be
submitted whenever an audit report is formulated. To help the
reader understand the main idea it is necessary that a brief
explanation is presented. The audit executive summary plays the
same role as an audit report.

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Chapter - 01
Introduction
Krishna Associates is a Professional Body in the service sector

consisting of Team of Professional Accountants in Bangalore
providing guidance and consultancy to Businessmen & Other
Professional to help them manage their books of accounts and their
business-related statutory compliance applicable to them.
Krishna Associates also provides other services which include

Accounting, Auditing, Business & Marketing Consultation, Financing
and Tax Planning.
 WHAT IS AUDIT?
Audit typically refers to a review of the financial statements. A
financial audit is an impartial analysis and evaluation of an
organisation's financial statements to ensure that the financial
reports are a fair and correct reflection of the transactions that they
appear to represent.
The audit can be carried out internally by the organisation's
employees or externally by an independent Certified Public
Accountant (CPA) company.
Audits are a legal necessity for individual businesses because of
the persuasive reasons to misinterpret financial details to commit
fraud deliberately.

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 Types of Audits
1. External Audits
Audits carried out by third parties can be extremely helpful
in eliminating any prejudice in the analysis of the financial state
of a corporation. Business reviews are intended to determine
whether the financial statements contain any material
misstatements.
An unbiased or clean opinion from an auditor gives consumers

of financial statements confidence that the financial statements
are both correct and full. Therefore, external audits enable
stakeholders to make smarter, more informed decisions about
the business being audited.
2. Internal Audits
Internal auditors are appointed by the corporation or
entity for which they conduct an audit, and the resulting audit
report is presented directly to the management and the board
of directors.
Although not working internally, consultant auditors use the

business standards of the company they are auditing, as
opposed to a different collection of guidelines. Such types of
auditors are used when a company does not have the capacity
in-house to audit those parts of its operations.
 What is a Tax Audit?
 Tax Audit refers to the verification of the books of accounts of

the taxpayer. The auditor examines or reviews the books to
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form an opinion on matters related to taxation compliances

that are carried out by the assessee.
 Tax audit also ensures proper maintenance of books of
accounts concerning the provisions of tax laws.
 It also ensures that tax liability has been discharged on time,
and there is no concealment of income by the assessee.
 The main goal of a tax audit is to ensure that the details related
to the income, expenditure, and tax-deductible expenditure
information is filed correctly by the business undergoing an
audit.
 The assessee must comply with the provisions of the Income
Tax Act, 1961, while preparing the books of accounts,
particularly from Section 28 to Section 44DB.
 The provisions specified in these sections deal with the income
from any business or profession that is chargeable to tax
computes incomes, chargeability, various allowances, or
disallowances.
 Section 44AB of the Income Tax Act, 1961, lists all the relevant
requirements and provisions to carry an Income Tax Audit as
per the Act.
 Importance of Tax Audit in Organisation

A Tax Audit will have the following advantageous or importance
in an organization:
I. A Tax Audit will maintain the books of accounts and all other
records regarding the revenue and expenditure properly so that
the eleventh hour rush and panic can be avoided
II. It will ensure that the total income and the claims for deduction
are correctly and accurately entered by the businessman
III. It restricts the chance of fraudulent practices.
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IV. Tax Audit helps proper presentation of accounts before the tax
authorities. It identifies the weaknesses in the accounting
system and enables to suggest the improvements.
V. An Audit facilitates the provision of advice that can have real
financial benefits for a business. An Audit adds credibility to
published information for employees, customers, suppliers,
investors and tax authorities.
VI. An Audit provides assurance to shareholders that the figures in
the accounts show a true and fair view.
VII. An Audit builds up the reputation of the company.
VIII. Government authorities accept audited statements as true and
fair for the purpose of taxation.
IX. Auditors can give concrete suggestions regarding the
improvements of business on the basis of their findings in the
record.
 Who cannot be a tax auditor?

There are specifically specified prohibitions on the appointment
of tax auditors, which are enumerated below:
 Any member in part-time practice is not eligible to perform a
tax audit.
 A chartered account cannot audit the accounts of a person to
whom he is indebted for more than Rs.10, 000.
 A statutory auditor will be deemed to be guilty of professional
misconduct if he/she accepts the appointment of Public Sector
Undertaking/Government Company/Listed Company and other
Public Company having turnover of Rs 50 crores or more in a
year and accepts any other work, assignment or service
regarding the same undertaking/company on a remuneration
which in total exceeds the fee payable for carrying out the
statutory audit of the same undertaking/company.
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 The Chartered Accountant who is assigned with the task of

writing and maintaining the books of account of the assessee
should not audit such accounts.
 The audit of accounts of a professional firm of Chartered
Accountants cannot be performed by any partner or employee
belonging to such a firm.
 An internal auditor of the assessee cannot be appointed as a
tax auditor.
 An auditor cannot accept more than 45 tax audit assignments in
a particular financial year.
 Effectiveness of Tax Audit on an Organization
Since Tax Audit is the re-evaluation of a company’s role as a

taxable body by the government, its efficacy on an organization is
very significant.
I. A Tax Audit protects the rights of the tax payer. The tax payer
has been granted the right to verify the professional
identification cards of the tax auditors.
II. He can obtain a copy of the tax audit notification. He can attend
the auditing procedures and obtain copies of any original paper
or digital documents
III. It maintains the professional confidentiality. The FTA employees
are prohibited to disclose any information obtained if not
requested by the judicial authorities.
IV. It gives guidance to a tax payer. Its aim is to settle any questions
and problems related to tax as thoroughly as possible through
an open dialogue between the tax recipient and the tax payer.
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V. A Tax Audit increases the credibility of the business and avoids

loss of reputation. The true value of the business is known after
the audit
 Typical matters examined during Tax Audit
There is no fixed frequency to conduct the audit nor will all the
VAT registered business be audited. It is the FTA’s discretion to select
the businesses required to be audited. The selection is based on
either the complexity of the business or the past compliance history
or late submission of returns, incorrect Return Filing, etc.
The auditors check the following typical areas during the

examination:
I. Whether the given details about the company's business

operations and the records in its accounting do match.
II. Whether the tax returns, information returns and the company
accounting records do match.
III. Whether the company satisfies the requirements of the tax
legislation.
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 Relevant records to be kept for the audit
Article78 of the Federal Decree Law of the Government states

that a Taxable Person should maintain the following records for the
Tax Audit:
1) The records of all supplies and Imports of Goods and Supplies

2) All tax invoices and alternative documents related to receiving
goods or services
3) All Tax Credit Notes and alternative documents received
4) All Tax Invoices and alternative documents issued
5) All Tax Credit Notes and alternative documents issued Records
of Goods & Services that have been disposed of or used for
matters not related to Business, showing taxes paid for the
same
6) Records of Goods & Services purchased and for which the input
tax was not deducted
7) Records of Exported Goods & Services Records of adjustments
or corrections made to Accounts or Tax Invoices
8) Records of any taxable supplies made or received in accordance
with Clause (3) of Article 48 of this Decree-Law, including any
declarations provided or received in respect of those Taxable
Supplies
9) Tax Record that includes the following information:
- Due Tax on Taxable Supplies

- Due Tax on Taxable Supplies pursuant to the mechanism in
Clause (1) of Article (48) of this Decree-Law
- Due Tax after the error correction or adjustment
- Recoverable Tax for Supplies or Imports
- Recoverable Tax after the error correction or adjustment
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 The following other sections under the Income Tax

Act of 1961 also lay down regulations related to an
income tax audit in India:
Section 44BB: For Non-Resident Indians (NRIs) involved in the

business specializing in the mineral oils industry, like exploration.
Section 44BBB: International Company that is involved in the
business of civil construction etc. or in specific power projects.
Section 44AD: Any business except those businesses that are
specified under Section 44AE.
Section 44ADA: This section covers the regulations with regard to
the income tax audits for eligible professionals.
Section 44AE: This section focuses on businesses specializing in
leasing, hiring, and plying of goods carriages.
 What triggers a tax audit?
 Having higher than average income

 Taking deductions that are disproportionate to the
income
 Claiming of business losses every year
 Taking irrelevant deductions
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Chapter - 02
Industry and Company Profile
India has emerged as a preferred destination for business in the

accounting and auditing sector. There are major Accounting &
auditing Firm in India like KPMG, Deloitte, EY, PWC. Along with these
there are a lot of Chartered Accountant Firms who practice either
individually or in partnership. These Firms provide different types of
services. Some are experts in Direct taxes while some are into
Indirect taxes and some labor law.
Krishna Associates is a sole proprietorship firm run by Mr. Gourav
Jangid Y who employees a team of professional accountants. He has
team of 6 people for providing accounting and other statutory
services. This firm was formed in March 2021 and is located in
Cubbonpet main road Bangalore.
Board:
The firm’s Major decisions are taken by the founder Gourav Jangid Y
who is one of the KMP and the other KMP in the firm is his father
who is a direct tax expert Mr. Yuvraj Jangid, they together take
decision to run the firm and handle the business.
A Manager is appointed to take day to day small decisions of the firm

in managing the office and client communication keeping the KMP’s
in the loop of communication.
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Organisation Structure of Krishna Associates
Decision Making CEO & CFO
Manager Manager Manager Finance &

(Accounts) Finalising (Direct Tax) (Indirect Tax) Marketing
AssistantData
1 Entry & Computation
Assistant 2 Assistant 1 Assistant 1 Assistant 2
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The services provided by Firm are as below:

 Book Keeping Services to Small & Medium Firms
KRISHNA ASSOCIATES handles bookkeeping work.
Bookkeeping, in business, is the recording of financial transactions,
and is part of the process of accounting. Transactions include
purchases, sales, receipts and payments by an individual or
organization. The accountant creates reports from the recorded
financial transactions recorded by the bookkeeper and files forms
with government agencies. There are some common methods of
bookkeeping such as the single-entry bookkeeping system and the
double-entry bookkeeping system. But while these systems may
be seen as "real" bookkeeping, any process that involves the
recording of financial transactions is a bookkeeping process.
Bookkeeping is usually performed by a bookkeeper/accountant. A
bookkeeper (or book-keeper), is a person who records the day-to-
day financial transactions of an organization. A bookkeeper is
usually responsible for writing the "daybooks". The daybooks
consist of purchases, sales, receipts, and payments. The
bookkeeper is responsible for ensuring all transactions are
recorded in the correct day book, supplier’s ledger, customer
ledger and general ledger.
The bookkeeper brings the books to the trial balance stage. An
accountant may prepare the income statement and balance sheet
using the trial balance and ledgers prepared by the bookkeeper.
Few common book keeping software's for mid to big size
corporates is SAP, Oracle & Xero Accounting Software and for
SME's (small and medium enterprises) they are Tally ERP 9,
QuickBooks, Marg, Busy & Profit Books.
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 Consultancy in Indirect Taxes
Indirect taxes prevail in each and every part of a

company’s business. They have a huge impact on costing and
profitability of the company, cash flow and other aspects of the
business. The existing regime requires every business to
undertake diligent analysis of the tax costs involved in
transactions ensuring such back up documents which support
the tax positions. Further, as India has entered the reign of
uniform Goods and Service Tax (GST), this needs to be factored
in any significant tax approach developed at present.
Goods and Services Tax, Value Added Tax (VAT)/Sales Tax,

Service Tax, Custom and Excise Duty and other similar taxes are
broadly based on transactions and liability will arise regardless
of profitability. As most countries impose such indirect taxes,
they affect mostly all transactions.
We at KRISHNA ASSOCIATES, will offer you support to improve

your day-to-day reporting for indirect tax and help you to
manage your indirect taxes effectively. Our team can help you
develop and refine your Indirect Tax Strategy and provide
insights regarding applicability of indirect taxation on most
types of business transactions.
 Statutory Compliances:
A company will succeed at safeguarding itself from a

variety of serious legal troubles if it is statutorily compliant. This
will also eschew sustainable growth. This is because when
employees are fairly treated, they continue to deliver quality
work.
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Some of the statutory compliance provided by Krishna associates to

their clients are as follows:
- Registrations (Partnership, Company, GST, PAN, TAN,
Trademark etc.)
- GST Payments & GST Return Filings
- Reconciliation of GSTR 2B
- GST Annual Returns
- Revocation of Cancelation
- TDS Payments & Return Filing
- Payments of Advance Tax
- Generation of TDS Certificates
- Payroll Management; Salary Register
 Tax Planning Consultancy (Direct Tax)
Today’s tax planning blends technology and business acumen

to focus on consistency, compliance and the organization’s
strategic objectives.
Careful tax planning is critical for business success in an

unpredictable global economy. Tax planning is also necessary
for individuals who face their own challenges owning, managing
and preserving businesses and wealth in a complex regulatory
environment.
 Filing of Income Tax Returns
A lot of individuals seem to think that filing tax returns is

voluntary and therefore dismiss it as unnecessary and
burdensome. As we will see, this is not a very healthy
perspective on tax-filing.
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Filing tax returns is an annual activity seen as a moral and social

duty of every responsible citizen of the country. It is the basis
for the government to determine the amount and means of
expenditure of the citizens and provides a platform for the
assesses to claim refund, among other forms of relief from time
to time.
Why it is mandatory to file income tax return here are

reason as follows:
- Filing returns is a sign you are responsible
- Filing returns is mandatory in some cases
- Your loan or card company may want to see your return
- If you want to claim adjustment against past losses, a return is
necessary
- Filing returns may prove useful in case of revised returns
 Appearing for IT & Sales Tax Assessments
A sales tax assessment is basically a determination that

you owe additional tax on certain transactions you either
claimed as exempt from sales tax or taxable transactions you
failed to report. A sales tax assessment may be based on actual
facts or information disclosed during a sales tax audit or may be
based on the lack of evidence or information to support
deductions or exemptions claimed on a return.
 Life Insurance Advisor (Life Insurance Corporation)
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A professional who provides specialized guidance and advice for

investment in various insurance schemes is an insurance
advisor or insurance consultant.
 Medical Insurance Advisor (Star Health and Allied

Insurance)
A professional health insurance advisor is the one who has in-

depth knowledge of the health insurance industry. The advisor
knows the concepts and working of this industry. He/she is also
well-equipped with answers to any queries that a potential
policyholder may have.
Star Health and Allied Insurance Co Ltd is an Indian

multinational health insurance company headquartered in
Tamil Nadu, Chennai. The company provides services in health,
personal accident and overseas travel insurance, directly as well
as through various channels like agents, brokers and online.
 Audits & Other Services

- Internal Auditing
- Finalisation of Books of Accounts
- Statutory Audits
- Tax Audits
- Project Report
- Provisional & Projected Financial Statements
- Stock & Debtor Statements
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 GDP Contribution
A great contribution of Chartered Accountants in Indian
economy post-independence, rather we should say world economy
as members of ICAI has a presence in almost every developed and
developing countries of the world engaged in providing quality
services in the field of accountancy, finance, auditing, business
consultancy etc.
- In providing services right from the inception of the business till the
closure of the business, a business can never grow and prosperous
without a Chartered Accountant.
- It has played a very important and crucial role in Nation building,
they are partners in building nation’s economy, that is the reason
why CA’s has got special powers from the government and
parliament for auditing of books of accounts.
- It has played a very important role in successful implementation of
GST law by providing quality suggestions and consultancy to the
government on timely basis.
- They also provide clarification and guidance if any required to
specific industry.
- CAs with vast knowledge of tax laws also engaged in training and
taking seminars of various govt. officials like Income tax department
officers and GST officers etc.
At last, would like to conclude that role and contribution of Chartered

Accountants in Indian Economy was unquantifiable and will continue
in future also, will take Indian economy to new heights one day.
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 Growth and Development
- India is a unique among the big economies of the world in

statutorily mandating compulsory audit for all companies,
irrespective of their size and characteristics.
- In view of the significant role played by companies in India in the
economic growth and development of the Nation, it is essential that
the regulatory environment is conducive to support, and not burden,
the growth in business and economic activities of these entities.
- Major economies of the world require statutory audit for small
companies only in case some minimum criteria of public interest are
satisfied.
- Even in India, income tax audit is now not compulsory where the
turnover is Rs. 2 crore or less provided not more than 5% of the
transactions are in cash. GST audit has also been introduced.
Therefore, there is a steady growth and requirement of Chartered
Accounts and professionals in the field of commerce. In a country like
India, a developing nation has a very big demand for the book
keepers and tax planners who are expert in it to guide the lay man in
the situation of their tax filings and being compliant.
With upcoming changes in the policies by the government, this
industry has a very big scope of growth as there is a lot of foreign
investment taking place. India as a country has attracted global
market to set up their manufacturing units here. Also, the new Make
in India, Make for India & Make for world campaigns has attracted a
lot of attention which would require a steady and strong professional
to carry out the structurization of the companies and the
compliances.
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CSR Activities of the company

The founder of Krishna Associates Mr. Gourav Jangid Y likes gardening and does
a bit of for the society by planting trees as an individual. Further as a
responsible citizen, he and his team are working towards a paperless office.
The Vision of the company is to go green and avoid usage of paper and support
digitalisation of data, books of accounts and further documentation of the
clients.
Further, the firm invites interns to apply and understand the concept and
importance of book keeping and taxation in the nation’s growth.
 SWOT Analysis
The SWOT frameworks is the most popular strategic tool for auditing
an organization, based on its external and internal factors,
influencing its business performance.
-The strengths and weaknesses determine the internal factors
-The opportunities and threats determine the external factors.
Strengths
 Adaptability and adoption of technology and availability
of a wide range of systems and software.
 We have strong professional associations and societies
that promote the profession and keep track of legislation.
 As a profession we are relatively free of debt.
 Key employees with low turnover.
 Strong firm cultures.
 Accounting firms are learning organisations.
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Weakness
 Lack of diversity of staff and also of the client base.
 Some firms have very high employee turnover, an older
management base, are not learning organisations, and
have no partner energy or synergy.
 Building up the skill levels of staff to support partners and
services and then not promoting them because they do
not generate new business.
 Minimal soft skills training.
Opportunities
 To be able to not only grow with our client’s nut in many
cases to lead client’s growth.
 The colleges provide a steady stream of entry level
personnel and, as we add services, we can draw the
people we need from the colleges.
 The accountant usually finds out early on about personnel
services that a client needs, enabling us to enter that
space.
 The need for advisory services is expanding very rapidly
and many of the innovative firms are jumping on these
opportunities.
 Business transparency is increasingly becoming more
important, and that means added services for
independent accountants.
Threats
 Inattention by partners could cause the loss of clients or
key staff.
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 Swift, more frequent and wide range of tax changes.

 Government regulations.
 Negative publicity of other accounting firms’
shortcomings or errors.
 Fear of change by older partners who are complacent and
risk averse, and who dominate many practices.
 Future prospects/ Growth
Working models brought about by COVID-19 have hastened the

move to a more flexible, technologically aware and diverse
auditing profession.
- Audit firms are likely to move to a more flexible working

model based on the needs of the individual, audit firm and
audited company.
- As businesses become more complex, audit firms will need
to access a wide range of knowledge resources as part of
their multidisciplinary model.
- Audit teams will become more diverse, with greater
technical and business knowledge.
Summary of future challenges

The shift to remote working during the COVID-19 pandemic has
accelerated a trend that was already in place in the auditing
profession.
Audit firms are now expected to move to more flexible ways of
working based on the requirements of the audited company, the firm
and the individual.
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The new environment has also highlighted the need for auditors to
leverage available technology, have an agile mindset that embraces
change and disruption, and to operate effectively in teams.
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Chapter - 03
Research Methodology
 Literature Review
This chapter discusses the literature about the study of
audit and tax , it also covers the empirical literature about the audit
and tax and shows the conceptual framework and lastly the research
hypothesis will be elaborated.
It is observed that there is an increasing amount of evidence
from experimental studies and survey data that show that citizens
trust in others and by his or her perceptions of the trustworthness of
the government lead to equal tax assesment.
Therefore, from this perspective citizens are likely to fruit the
government only when they believe that it will act on their interests,
its procedures are fair and reasonable, and their trust in the state and
other people is reciprocated.
Auditing
Audit typically refers to a review of the financial statements. A
financial audit is an impartial analysis and evaluation of an
organisation's financial statements to ensure that the financial
reports are a fair and correct reflection of the transactions that they
appear to represent.
Audits are a legal necessity for individual businesses because of
the persuasive reasons to misinterpret financial details to commit
fraud deliberately.
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 RESEARCH OBJECTIVES OF THE STUDY
To examine the necessity of conducting the audits for the clients, why
it is a requisitefor the firms to get the Audits done of their financial
accounts and the timely filing ofthe taxes levied on them.
For examining whether the services provided by the CA firms are
satisfactory and theactivities are conducted while maintaining the
authenticity and confidentiality for theclient companies or not.
To learn about what is taxation and auditing, how they are made
mandatory and why itis necessary for companies, individuals to pay
taxes.
 Tax Hypothesis
The theoretical and empirical literature on tax hypothesis establishes

that the corporate tax rate, term structure, and asset variability are
important factors that influence the firms’ capital structure and debt
maturity choice. The empirical literature has identified three proxies
for testing tax hypothesis
- Tax Rate
- Term Structure
- Asset Variance
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 Research Design & Sampling
Planning
Audit Engagement
Gather Information
Identifying Risks
Audit check list
Fieldwork
Conduct interviews
Physical Verification
Review Documentation & Transactions
Reporting
Draft reporting (for comments)
Obtain Corrective action plans
Distribute Final report to appropriate individuals
Follow Up
Interview Staff
Review new process & train the employees
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Sampling Methods
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Research Instruments
There are a lot of instruments available in the market for the professionals to
use for the audit purposes. There is software used for book keeping which
allows an auditor check and verify the transactions.
Certain Questionnaires can be prepared to gather information, online tools for

compliances, thorough knowledge is must for any sort of work done in this
field.
Using of Microsoft excel, and log-based accounting software, which shows a
trail for the transaction are to be used. ERP software and SAP allows auditor to
view the information required.
 Scope of Tax Audit
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The scope of a tax audit encompasses an examination or

review of the books of accounts of any business or profession
maintained by taxpayers, conducted by a Chartered Accountant (CA).
The tax audit is performed from an income tax viewpoint.
The purpose of the tax audit is to check whether the calculation of
income tax liability is correct and according to the provisions of the
Income Tax Act. The tax audit certification from a CA allows the
Income Tax Department to place confidence in the information
submitted by the assesses in the return of income.
 To ensure accurate maintenance and correctness of the books
of accounts by means of certification of the accounts by a CA
and to facilitate the Income Tax Department to verify the truth
and correctness of the information constituting the income tax
returns filed by the taxpayer
 To report observations and discrepancies noted by the auditor
after conducting a systematic examination of the books of
account
 To make available to the Income Tax Department the relevant
information required by the Act, including depreciation
allowable under the Act and ensuring compliance with the
various provisions of the Act
 Limitations of auditing
1. Non-detection of errors/frauds: - Auditor may not be able to
detect certain frauds which are committed with mala fide intentions.
2. Dependence on explanation by others: - Auditor has to depend on
the explanation and information given by the responsible officers of
the company. Audit report is affected adversely if the explanation
and information prove to be false.
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3. Dependence on opinions of others: - Auditor has to rely on the

views or opinions given by different experts viz Lawyers, Solicitors,
Engineers, Architects etc. he cannot be an expert in all the fields
4. Conflict with others: - Auditor may have differences of opinion
with the accountants, management, engineers etc. In such a case
personal judgement plays an important role. It differs from person to
person.
5. Effect of inflation: - Financial statements may not disclose true
picture even after audit due to inflationary trends.
6. Corrupt practices to influence the auditors: - The management
may use corrupt practices to influence the auditors and get a
favourable report about the state of affairs of the organisation.
7. No assurance: - Auditor cannot give any assurance about future
profitability and prospects of the company.
8. Inherent limitations of the financial statements: - Financial
statements do not reflect current values of the assets and liabilities.
Many items are based on personal judgement of the owners. Certain
non-monetary facts cannot be measured. Audited statements due to
these limitations cannot exhibit true position.
9. Detailed checking not possible: - Auditor cannot check each and
every transaction. He may be required to do test checking
Corporate Tax Rate (TAXRATE):

The optimal debt maturity involves the trade-off between tax
advantage of debt, bankruptcy cost, and debt issue flotation cost.
Higher the transaction cost associated with the debt issue, the
greater is the optimal debt maturity since more time is required to
amortize the debt flotation cost. Because, at lower tax advantage, a
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longer debt maturity is required to amortize flotation cost incurred in

issuing debt.
The tax hypotheses establish that corporate tax rate negatively
relates to debt maturity. We test the empirical hypothesis that tax
rate and debt maturity are inversely related. The tax rate measured
as the ratio of the tax paid to taxable income.
Tax rate = Tax paid (TP)
Pre-tax income (PTI)
Term structure
The optimum debt maturity and establish that debt maturity
directly relates to term structure. The tax advantages to corporate
borrowing and a non-flat term structure of interest rates, firm value
may increase for long-term debt when the term structure increases.
The term structure of interest rate is measured as the
difference between the month-end yields on 10-year government
bond and 6-month government bond matched to the firm’s fiscal
year end.
Term Structure (TERM) = (Month end yield on 10-year Govt.
Bond) -(Month Yield on 6-month Govt. Bond Matched to firm’s fiscal
year end)
Asset variance (ASSETVAR)

the optimal debt maturity inversely relates to volatility in the
firm value. The decreasing firm value volatility reflecting the fact that
with less volatile the asset variance, firms rebalance their capital
structure less frequently. A low asset variance causes firms to avoid
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rebalancing their capital structure frequently due to the concerns

about expected bankruptcy costs
The empirically testable research hypothesis is that debt maturity is

inversely related to asset variability. The asset variability (ASSETVAR)
is proxied to the standard deviation of the first difference in earnings
before interest and taxes and depreciation and amortization
(EBITDA), scaled by the average book value of asset (BV).
Asset Variance = EBIDTA

Book value of Asset (BV)
 Statement of Hypothesis
1. Desk audit has no significant relationship with tax evasion.
2. Field audit has no significant relationship with tax evasion.
3. Back duty audit has no significant relationship with tax evasion.
4. Tax investigation has no significant relationship with tax
 Objectives of the study
The broad objective of this study was to determine the

impact of tax audit and investigation on tax evasion, Specifically,
the study was conducted to
1. Determine the impact of desk audit on tax evasion
2. Investigate the effect of field audit on tax evasion
3. Determine the effect of back duty audit on tax evasion
4. Ascertain the impact of tax investigation on tax
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 Chapter Scheme
Tax is an important source of government revenue. As such, the
government must adopt strategies that will promote a sustainable
level of tax revenue and avoid leakages that will defer government
developmental projects. The study found that tax audit and
investigation are important compliant tools that can reduce the level
of tax evasion and increase government revenue.
Specifically, the study found that tax audit in the form of a desk audit,
field audit and back duty audit is capable of reducing tax evasion.
Similarly, it was also revealed that tax investigation asserts a
significant influence on tax evasion, suggesting, that the more tax
evaders are investigated and prosecuted for their fraudulent act, less
evasive behaviours will be recorded amongst tax payers.
In line with the above, we recommend that tax audit and
investigation be continuously applied by relevant tax authorities.
Specifically,
1. Tax audit should be carried out on a routine basis to serve as a
check and a preventive too l for tax evasion.
2. Emphasis should be placed on ethics, such that tax auditors
embarking on field audit will perform their duties diligently and avoid
any form of collusive acts that may result in loss of revenue to the
government.
3. It is important taxpayers are adequately profiled and selected for
audit to avoid in efficiencies and audit delays.
4. Lastly, tax evaders and abettors should be investigated and
prosecuted to ensure that revenue due to the government is not lost
to evasion.
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Chapter - 04
Data Analysis & Interpretation
Here in Krishna Associates the work is divided on the monthly basis

as per statutory compliance which is to be taken care as prescribed
by the law.
The First thing at the start of the month client approach with the
books of accounts to their office and get them accounted in a
software called Tally ERP. This software collects all the data of the
clients’ business i.e., Accounting of Sales, Purchases, Expenses,
Receipts & Payments done and lastly the Bank Reconciliation. They
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follow the Generally Accepted Accounting Policies and also the Indian
Accounting Standards as notified under section 133 of the
Companies Act 2013.
Once the Accounting of the clients are done, they further proceed
towards filing of GST Returns.
 GSTR 1 – Return filed declaring all the sales of the client at the
GST portal by 11th of every month. Here all the details of B2b &
B2c Supplies as prescribed in the format of GSTR1
 GSTR 2B – Auto generated Purchase statement based on GSTR
1 filed by every other business in the country. This will show the
details of B2b Purchases of the client by 14th of every month.
 GSTR3B- After GSTR1 & 2B the team has to reconcile the GSTR
2B with the purchases in the books of accounts and figure out
the suppliers who has not filed there GSTR 1and follow up on
the same. Further after reconciliation the calculation of GSTR1
and GSTR 2B helps them determine the tax liability due of their
client. Once the liability is determined a challan is sent to client
and the tax is been paid by the client and return is filed by
verifying with an OTP received on the client’s number. This is
done by 20th of every month.
Post 20th the work of reconciling the bank account starts and party
ledger of the clients are finalised.
The whole process is repeated every month along with other flings
such as Comp -08 filing which is done for quarterly filers of GST. TDS
calculations and payments are done which are due on 6th of every
month. TDS returns which are due every quarter.
Along with these the employees here are given training and updated
with the changes in law by the proprietor on one of the Saturdays of
every month. They are trained for client interaction and asked to
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study the latest changes after briefing them with the concepts of the
changes.
The proprietor works on business development and work on the
clients whose work needs expertise. Clients take appointments for
consultancy with regard to business, tax planning, marketing from
him. He also holds an agency of Life Insurance and guides clients to
purchase Insurance Policies as per their suitability.
They also file Income Tax returns perform internal audits along with
routine work. They take up the work of IT & Sales Tax Assessments,
Registrations, and any other statutory compliances.
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Data Source:
The data required for conducting the study was collected from the
auditor’s office. It also included the secondary data that is taken from
the clients, which they maintain on day-to-day basis. The data from
the client acts as the base data for the filing and maintaining the
books of account and filing GST Returns on regular basis.
Here in this study, we will try to understand the process of
maintaining the books of accounts and how the data is calculated for
the filing of GST Returns and the books of accounts are closed on the
monthly basis.
So, to start, we collect the day-to-day transaction received from the
clients. The clients maintain the sales books in which they bill their
customers. Due to company’s policy the data presented here is
altered as the company does not want to share its data as it could
lead to competition as the source of supply is been revealed.
Therefore, the purchase data will contain fictitious names and GSTN
No.
Also, sales are been slightly changed as it contains B2B Transaction
and are to be kept confidential.
After a lot of requesting one company data is been collected.
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Mahalaxmi Textiles
#861, Chickpet,
Bangalore
Sales Register
1st April 2022 to 30th April 2022
HS
Invoice N
Date Party Name GSTN Qty Rate Taxable CGST SGST IGST Round off Total
No. co
de
01/04/2 50
022 0001 Cash Consumer 74 3 780.00 2,340.00 58.50 58.50 - - 2,457.00
01/04/2 50
022 0002 Card Consumer 74 2 685.00 1,370.00 34.25 34.25 - 0.50 1,439.00
01/04/2 50
022 0003 Cash Consumer 74 7 900.00 6,300.00 157.50 157.50 - - 6,615.00
02/04/2 50
022 0004 UPI Consumer 74 2 1,200.00 2,400.00 144.00 144.00 - - 2,688.00
03/04/2 50
022 0005 Cash Consumer 74 6 1,350.00 8,100.00 486.00 486.00 - - 9,072.00
03/04/2 37AAAPD67 50 1,44,300. 1,51,515.

022 0006 Soorya Collection 891ZD 74 185 780.00 00 - - 7,215.00 - 00
03/04/2 50
022 0007 UPI Consumer 74 10 850.00 8,500.00 212.50 212.50 - - 8,925.00
04/04/2 50
022 0008 Card Consumer 74 10 785.00 7,850.00 196.25 196.25 - 0.50 8,243.00
04/04/2 27COOPF67 50 1,30,000. 1,36,500.

022 0009 Hanuman Textiles 892ZF 74 200 650.00 00 - - 6,500.00 - 00
04/04/2 0010 Cash Consumer 50 9
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022 74 650.00 5,850.00 146.25 146.25 - 0.50 6,143.00

04/04/2 50
022 0011 Cash Consumer 74 5 890.00 4,450.00 111.25 111.25 - 0.50 4,673.00
04/04/2 50
022 0012 UPI Consumer 74 10 780.00 7,800.00 195.00 195.00 - - 8,190.00
04/04/2 50
022 0013 Cash Consumer 74 6 450.00 2,700.00 67.50 67.50 - - 2,835.00
05/04/2 50
022 0014 Cash Consumer 74 7 640.00 4,480.00 112.00 112.00 - - 4,704.00
05/04/2 50
022 0015 Cash Consumer 74 3 850.00 1,001.00 25.03 25.03 - -0.05 1,051.00
05/04/2 50
022 0016 Card Consumer 74 10 570.00 5,700.00 142.50 142.50 - - 5,985.00
05/04/2 50
022 0017 Card Consumer 74 2 890.00 1,780.00 44.50 44.50 - - 1,869.00
05/04/2 50
022 0018 Cash Consumer 74 6 785.00 4,710.00 117.75 117.75 - 0.50 4,946.00
05/04/2 50
022 0019 UPI Consumer 74 3 970.00 2,910.00 72.75 72.75 - 0.50 3,056.00
05/04/2 50
022 0020 Cash Consumer 74 1 490.00 490.00 12.25 12.25 - 0.50 515.00
05/04/2 50
022 0021 Card Consumer 74 4 570.00 2,280.00 57.00 57.00 - - 2,394.00
05/04/2 50
022 0022 Cash Consumer 74 3 940.00 2,820.00 70.50 70.50 - - 2,961.00
06/04/2 29XUVFD234 50 97,500.0 2,437.5 1,02,375.

022 0023 Mordern Fabrics 51ZI 74 150 650.00 0 0 2,437.50 - - 00
06/04/2 50
022 0024 UPI Consumer 74 1 540.00 540.00 13.50 13.50 - - 567.00
06/04/2 50
022 0025 Cash Consumer 74 7 560.00 3,920.00 98.00 98.00 - - 4,116.00
06/04/2 0026 Card Consumer 50 9
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022 74 495.00 4,455.00 111.38 111.38 - 0.25 4,678.00

06/04/2 50
022 0027 UPI Consumer 74 6 780.00 4,680.00 117.00 117.00 - - 4,914.00
06/04/2 29AANPL009 50 2,75,000. 16,500. 16,500.0 3,08,000.

022 0028 HPT Creation 81ZH 74 250 1,100.00 00 00 0 - - 00
06/04/2 50
022 0029 UPI Consumer 74 7 690.00 4,830.00 120.75 120.75 - 0.50 5,072.00
07/04/2 50
022 0030 Card Consumer 74 3 580.00 1,740.00 43.50 43.50 - - 1,827.00
07/04/2 50
022 0031 Cash Consumer 74 7 790.00 5,530.00 138.25 138.25 - 0.50 5,807.00
07/04/2 50
022 0032 UPI Consumer 74 8 950.00 7,600.00 190.00 190.00 - - 7,980.00
07/04/2 29XUVFD234 50 1,40,400. 3,510.0 1,47,420.

07/04/2 50
022 0034 Card Consumer 74 5 920.00 4,600.00 115.00 115.00 - - 4,830.00
07/04/2 50
022 0035 UPI Consumer 74 4 870.00 3,480.00 87.00 87.00 - - 3,654.00
08/04/2 50
022 0036 Cash Consumer 74 8 780.00 6,240.00 156.00 156.00 - - 6,552.00
09/04/2 50
022 0037 Card Consumer 74 3 690.00 2,070.00 51.75 51.75 - 0.50 2,174.00
09/04/2 29AANPL009 50 1,10,000. 6,600.0 1,23,200.

022 0038 HPT Creation 81ZH 74 100 1,100.00 00 0 6,600.00 - - 00
09/04/2 50
022 0039 Cash Consumer 74 8 680.00 5,440.00 136.00 136.00 - - 5,712.00
09/04/2 50
022 0040 UPI Consumer 74 7 1,200.00 8,400.00 504.00 504.00 - - 9,408.00
09/04/2 0041 Card Consumer 50 6
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022 74 1,350.00 8,100.00 486.00 486.00 - - 9,072.00

09/04/2 50
022 0042 Cash Consumer 74 3 980.00 2,940.00 73.50 73.50 - - 3,087.00
09/04/2 50
022 0043 UPI Consumer 74 10 790.00 7,900.00 197.50 197.50 - - 8,295.00
09/04/2 50
022 0044 Card Consumer 74 8 890.00 7,120.00 178.00 178.00 - - 7,476.00
09/04/2 50
022 0045 Cash Consumer 74 3 990.00 2,970.00 74.25 74.25 - 0.50 3,119.00
10/04/2 50 10,900.0 12,208.0

022 0046 UPI Consumer 74 10 1,090.00 0 654.00 654.00 - - 0
10/04/2 50 11,088.0
022 0047 UPI Consumer 74 9 1,100.00 9,900.00 594.00 594.00 - - 0
10/04/2 50
022 0048 Cash Consumer 74 2 760.00 1,520.00 38.00 38.00 - - 1,596.00
10/04/2 37AAAPD67 50 91,000.0 95,550.0

10/04/2 50
022 0050 Cash Consumer 74 8 570.00 4,560.00 114.00 114.00 - - 4,788.00
11/04/2 50
022 0051 Card Consumer 74 4 670.00 2,680.00 67.00 67.00 - - 2,814.00
11/04/2 50
022 0052 Cash Consumer 74 3 980.00 2,940.00 73.50 73.50 - - 3,087.00
11/04/2 50
022 0053 UPI Consumer 74 2 800.00 1,600.00 40.00 40.00 - - 1,680.00
11/04/2 50
022 0054 Cash Consumer 74 10 820.00 8,200.00 205.00 205.00 - - 8,610.00
11/04/2 50
022 0055 Cash Consumer 74 8 930.00 7,440.00 186.00 186.00 - - 7,812.00
11/04/2 0056 UPI Consumer 50 3
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022 74 740.00 2,220.00 55.50 55.50 - - 2,331.00
12/04/2 31AAQPN45 50 6,30,000. 75,600.0 7,05,600.

022 0057 Singh & Sons 321ZH 74 600 1,050.00 00 - - 0 - 00
13/04/2 50
022 0058 UPI Consumer 74 8 805.00 6,440.00 161.00 161.00 - - 6,762.00
13/04/2 50
022 0059 Cash Consumer 74 10 790.00 7,900.00 197.50 197.50 - - 8,295.00
14/04/2 29XUVFD234 50 1,56,000. 3,900.0 1,63,800.

14/04/2 50 10,000.0 11,200.0

022 0061 UPI Consumer 74 10 1,000.00 0 600.00 600.00 - - 0
14/04/2 50 12,000.0 13,440.0

022 0062 Card Consumer 74 10 1,200.00 0 720.00 720.00 - - 0
14/04/2 50
022 0063 Card Consumer 74 2 1,100.00 2,200.00 132.00 132.00 - - 2,464.00
14/04/2 50
022 0064 Cash Consumer 74 9 900.00 8,100.00 202.50 202.50 - - 8,505.00
15/04/2 50
022 0065 UPI Consumer 74 8 800.00 6,400.00 160.00 160.00 - - 6,720.00
15/04/2 50
022 0066 Cash Consumer 74 3 700.00 2,100.00 52.50 52.50 - - 2,205.00
15/04/2 50
022 0067 Cash Consumer 74 4 750.00 3,000.00 75.00 75.00 - - 3,150.00
15/04/2 31AAQPN45 50 78,000.0 81,900.0

022 0068 Singh & Sons 321ZH 74 120 650.00 0 - - 3,900.00 - 0
16/04/2 50
022 0069 UPI Consumer 74 6 850.00 5,100.00 127.50 127.50 - - 5,355.00
16/04/2 0070 Cash Consumer 50 1
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022 74 950.00 950.00 23.75 23.75 - 0.50 998.00

16/04/2 50
022 0071 Cash Consumer 74 3 600.00 1,800.00 45.00 45.00 - - 1,890.00
16/04/2 50
022 0072 Card Consumer 74 1 550.00 550.00 13.75 13.75 - 0.50 578.00
17/04/2 50
022 0073 Cash Consumer 74 5 670.00 3,350.00 83.75 83.75 - 0.50 3,518.00
17/04/2 29AANPL009 50 55,000.0 3,300.0 61,600.0

022 0074 HPT Creation 81ZH 74 50 1,100.00 0 0 3,300.00 - - 0
17/04/2 50
022 0075 UPI Consumer 74 3 620.00 1,860.00 46.50 46.50 - - 1,953.00
17/04/2 29XUVFD234 50 78,000.0 1,950.0 81,900.0

18/04/2 50
022 0077 UPI Consumer 74 5 780.00 3,900.00 97.50 97.50 - - 4,095.00
18/04/2 50
022 0078 Cash Consumer 74 2 790.00 1,580.00 39.50 39.50 - - 1,659.00
18/04/2 50
022 0079 Cash Consumer 74 10 600.00 6,000.00 150.00 150.00 - - 6,300.00
18/04/2 50
022 0080 Card Consumer 74 3 850.00 2,550.00 63.75 63.75 - 0.50 2,678.00
19/04/2 50
022 0081 Cash Consumer 74 8 800.00 6,400.00 160.00 160.00 - - 6,720.00
19/04/2 50
022 0082 Cash Consumer 74 5 570.00 2,850.00 71.25 71.25 - 0.50 2,993.00
19/04/2 50
022 0083 Cash Consumer 74 10 800.00 8,000.00 200.00 200.00 - - 8,400.00
20/04/2 50
022 0084 Cash Consumer 74 6 980.00 5,880.00 147.00 147.00 - - 6,174.00
20/04/2 50
022 0085 UPI Consumer 74 8 890.00 7,120.00 178.00 178.00 - - 7,476.00
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21/04/2 31AAQPN45 50 78,000.0 81,900.0

022 0086 Singh & Sons 321ZH 74 100 780.00 0 - - 3,900.00 - 0
21/04/2 50
022 0087 UPI Consumer 74 2 1,000.00 2,000.00 120.00 120.00 - - 2,240.00
21/04/2 50
022 0088 UPI Consumer 74 2 1,200.00 2,400.00 144.00 144.00 - - 2,688.00
21/04/2 37AAAPD67 50 52,000.0 54,600.0

21/04/2 50
022 0090 UPI Consumer 74 7 1,100.00 7,700.00 462.00 462.00 - - 8,624.00
22/04/2 50
022 0091 Cash Consumer 74 2 1,150.00 2,300.00 138.00 138.00 - - 2,576.00
22/04/2 50
022 0092 Card Consumer 74 2 790.00 1,580.00 39.50 39.50 - - 1,659.00
23/04/2 50
022 0093 Card Consumer 74 8 720.00 5,760.00 144.00 144.00 - - 6,048.00
23/04/2 50
022 0094 UPI Consumer 74 9 740.00 6,660.00 166.50 166.50 - - 6,993.00
23/04/2 50
022 0095 Cash Consumer 74 4 680.00 2,720.00 68.00 68.00 - - 2,856.00
23/04/2 Poonam Sales 29CADCP753 50 57,000.0 1,425.0 59,850.0

022 0096 Corporation 12ZF 74 60 950.00 0 0 1,425.00 - - 0
23/04/2 50
022 0097 Cash Consumer 74 9 640.00 5,760.00 144.00 144.00 - - 6,048.00
23/04/2 50
022 0098 Card Consumer 74 4 890.00 3,560.00 89.00 89.00 - - 3,738.00
24/04/2 50
022 0099 Cash Consumer 74 1 980.00 980.00 24.50 24.50 - - 1,029.00
24/04/2 50
022 0100 Cash Consumer 74 9 780.00 7,020.00 175.50 175.50 - - 7,371.00
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24/04/2 50
022 0101 UPI Consumer 74 7 470.00 3,290.00 82.25 82.25 - 0.50 3,455.00
24/04/2 50
022 0102 Cash Consumer 74 9 400.00 3,600.00 90.00 90.00 - - 3,780.00
25/04/2 50
022 0103 Card Consumer 74 5 370.00 1,850.00 46.25 46.25 - 0.50 1,943.00
26/04/2 50
022 0104 Cash Consumer 74 6 980.00 5,880.00 147.00 147.00 - - 6,174.00
26/04/2 50
022 0105 Cash Consumer 74 8 920.00 7,360.00 184.00 184.00 - - 7,728.00
28/04/2 27COOPF67 50 36,000.0 37,800.0

022 0106 Hanuman Textiles 892ZF 74 80 450.00 0 - - 1,800.00 - 0
28/04/2 50
022 0107 UPI Consumer 74 9 720.00 6,480.00 162.00 162.00 - - 6,804.00
28/04/2 50
022 0108 Card Consumer 74 1 640.00 640.00 16.00 16.00 - - 672.00
29/04/2 50
022 0109 Cash Consumer 74 7 790.00 5,530.00 138.25 138.25 - 0.50 5,807.00
29/04/2 50
022 0110 Card Consumer 74 8 890.00 7,120.00 178.00 178.00 - - 7,476.00
29/04/2 50
022 0111 Cash Consumer 74 10 800.00 8,000.00 200.00 200.00 - - 8,400.00
29/04/2 50
022 0112 Cash Consumer 74 6 900.00 5,400.00 135.00 135.00 - - 5,670.00
29/04/2 50
022 0113 UPI Consumer 74 3 700.00 2,100.00 52.50 52.50 - - 2,205.00
29/04/2 50
022 0114 Cash Consumer 74 7 600.00 4,200.00 105.00 105.00 - - 4,410.00
29/04/2 50
022 0115 Cash Consumer 74 8 1,000.00 8,000.00 480.00 480.00 - - 8,960.00
29/04/2 50
022 0116 Cash Consumer 74 7 1,010.00 7,070.00 424.20 424.20 - -0.40 7,918.00
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30/04/2 29XUVFD234 50 1,17,000. 2,925.0 1,22,850.

30/04/2 50
022 0118 Card Consumer 74 5 1,015.00 5,075.00 304.50 304.50 - - 5,684.00
30/04/2 50 10,282.0
022 0119 UPI Consumer 74 9 1,020.00 9,180.00 550.80 550.80 - 0.40 0
30/04/2 50
022 0120 Cash Consumer 74 9 900.00 8,100.00 202.50 202.50 - - 8,505.00
30/04/2 50
022 0121 Card Consumer 74 4 800.00 3,200.00 80.00 80.00 - - 3,360.00
30/04/2 50
022 0122 UPI Consumer 74 10 700.00 7,000.00 175.00 175.00 - - 7,350.00
3,383. 28,27,09 59,145. 59,145.1 1,06,065 30,51,45

00 1.00 15 5 .00 9.70 6.00
52

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Sales Summary
HSN
Party Name GSTN Qty Taxable CGST SGST IGST Round off Total
code
Cash Consumer 5074 301.00 2,34,771.00 6,760.73 6,760.73 - 4.55 2,48,297.00
Card Consumer 5074 119.00 95,830.00 3,353.88 3,353.88 - 3.25 1,02,541.00
UPI Consumer 5074 198.00 1,71,290.00 6,483.05 6,483.05 - 1.90 1,84,258.00
Soorya Collection 37AAAPD67891ZD 5074 405.00 2,87,300.00 - - 14,365.00 - 3,01,665.00
Hanuman Textiles 27COOPF67892ZF 5074 280.00 1,66,000.00 - - 8,300.00 - 1,74,300.00
Mordern Fabrics 29XUVFD23451ZI 5074 800.00 5,88,900.00 14,722.50 14,722.50 - - 6,18,345.00
HPT Creation 29AANPL00981ZH 5074 400.00 4,40,000.00 26,400.00 26,400.00 - - 4,92,800.00
Singh & Sons 31AAQPN45321ZH 5074 820.00 7,86,000.00 - - 83,400.00 - 8,69,400.00

Poonam Sales
Corporation 29CADCP75312ZF 5074 60.00 57,000.00 1,425.00 1,425.00 - - 59,850.00
3,383.00 28,27,091.00 59,145.15 59,145.15 1,06,065.00 9.70 30,51,456.00
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Mahalaxmi Textiles
#861, Chickpet, Bangalore
Purchase Register
1st April 2022 to 30th April 2022
Date Party Name GSTIN/UIN Total Purchase IGST 5% IGST Round Off
01-04-2022 Marvel Syntex Rajasthan 08AAXPA9297N1ZK 1,42,013.00 1,35,250.00 6,762.50 0.50

01-04-2022 Marvel Syntex Rajasthan 08AAXPA9297N1ZK 1,63,318.00 1,45,820.00 17,498.40 -0.40
04-04-2022 Shree Sachiya Ma Cotton Mills Mumbai 27AAGPM7208J1ZI 79,231.00 75,458.00 3,772.90 0.10
05-04-2022 Camy Creation Mumbai 27AAGFC8170M1Z0 41,731.00 37,260.00 4,471.20 -0.20
06-04-2022 Marcorishi Clothing Co. Mumbai 24AAUFM9390D1ZT 51,413.00 48,965.00 2,448.25 -0.25
07-04-2022 Marcorishi Clothing Co. Mumbai 24AAUFM9390D1ZT 25,510.00 24,295.00 1,214.75 0.25
08-04-2022 Yumilone Silk Mills Maharashtra 27AACFY4449B1Z7 41,213.00 39,250.00 1,962.50 0.50
08-04-2022 Sahil Synthitics Mumbai 27AHQPJ4753N1ZL 37,191.00 35,420.00 1,771.00 -
09-04-2022 Marvel Syntex Rajasthan 08AAXPA9297N1ZK 27,825.00 26,500.00 1,325.00 -
12-04-2022 Camy Creation Mumbai 27AAGFC8170M1Z0 55,300.00 49,375.00 5,925.00 -
12-04-2022 S G S Silk Mills Pvt. Ltd Maharashtra 27AAGCS9122E1ZD 44,625.00 42,500.00 2,125.00 -
13-04-2022 S.K.Fabrics Mumbai 27ADFPJ8720J1ZD 26,040.00 23,250.00 2,790.00 -
13-04-2022 S.K.Fabrics Mumbai 27ADFPJ8720J1ZD 50,635.00 45,210.00 5,425.20 -0.20
13-04-2022 S G S Silk Mills Pvt. Ltd Maharashtra 27AAGCS9122E1ZD 61,173.00 58,260.00 2,913.00 -
14-04-2022 S.K.Fabrics Mumbai 27ADFPJ8720J1ZD 43,187.00 38,560.00 4,627.20 -0.20
15-04-2022 S G S Silk Mills Pvt. Ltd Maharashtra 27AAGCS9122E1ZD 49,214.00 46,870.00 2,343.50 0.50
15-04-2022 Marvel Syntex Rajasthan 08AAXPA9297N1ZK 38,833.00 36,984.00 1,849.20 -0.20
16-04-2022 Jainam Fab Pvt.Ltd Bhilwara 08AACCJ2083R1Z1 51,767.00 49,302.00 2,465.10 -0.10
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16-04-2022 Jainam Fab Pvt.Ltd Bhilwara 08AACCJ2083R1Z1 44,373.00 42,260.00 2,113.00 -

16-04-2022 Jainam Fab Pvt.Ltd Bhilwara 08AACCJ2083R1Z1 24,413.00 23,250.00 1,162.50 0.50
16-04-2022 Jainam Fab Pvt.Ltd Bhilwara 08AACCJ2083R1Z1 26,322.00 25,068.12 1,253.41 0.47
18-04-2022 Marvel Syntex Rajasthan 08AAXPA9297N1ZK 15,049.00 14,332.50 716.63 -0.13
18-04-2022 Marvel Syntex Rajasthan 08AAXPA9297N1ZK 15,435.00 14,700.00 735.00 -
18-04-2022 Marvel Syntex Rajasthan 08AAXPA9297N1ZK 14,921.00 14,210.00 710.50 0.50
26-04-2022 Marcorishi Clothing Co. Mumbai 24AAUFM9390D1ZT 22,758.00 21,674.70 1,083.74 -0.44
26-04-2022 Marcorishi Clothing Co. Mumbai 24AAUFM9390D1ZT 23,940.00 22,800.00 1,140.00 -
27-04-2022 D. Mahendra Kumar Mumbai 27AACPJ5625J1ZO 29,267.00 27,873.60 1,393.68 -0.28
27-04-2022 Camy Creation Mumbai 27AAGFC8170M1Z0 1,42,063.00 1,26,842.00 15,221.04 -0.04
27-04-2022 Yumilone Silk Mills Maharashtra 27AACFY4449B1Z7 37,435.00 35,652.85 1,782.64 -0.49
29-04-2022 Camy Creation Mumbai 27AAGFC8170M1Z0 1,85,696.00 1,65,800.00 19,896.00 -
20,46,641.00 18,91,914.39 1,54,726.91 0.70
Purchase Summary
Party Name GSTN Total Purchase IGST 5% IGST Round Off
Marvel Syntex Rajasthan 08AAXPA9297N1ZK 5,24,185.00 4,89,501.50 34,682.48 1.03
Shree Sachiya Ma Cotton Mills Mumbai 27AAGPM7208J1ZI 79,231.00 75,458.00 3,772.90 0.10
Camy Creation Mumbai 27AAGFC8170M1Z0 4,24,790.00 3,79,277.00 45,513.24 -0.24
Marcorishi Clothing Co. Mumbai 24AAUFM9390D1ZT 1,23,621.00 1,17,734.70 5,886.74 -0.44
Yumilone Silk Mills Maharashtra 27AACFY4449B1Z7 78,648.00 74,902.85 3,745.14 0.01
Sahil Synthitics Mumbai 27AHQPJ4753N1ZL 37,191.00 35,420.00 1,771.00 -
S G S Silk Mills Pvt. Ltd Maharashtra 27AAGCS9122E1ZD 1,55,012.00 1,47,630.00 7,381.50 0.50
S.K.Fabrics Mumbai 27ADFPJ8720J1ZD 3,73,990.00 3,33,920.00 40,070.40 -0.40
Jainam Fab Pvt.Ltd Bhilwara 08AACCJ2083R1Z1 2,20,707.00 2,10,196.74 10,509.84 0.42
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Mahalaxmi Textiles
#861, Chickpet, Bangalore
Expenses
1st April 2022D.to 30th April
Mahendra 2022Mumbai
Kumar 27AACPJ5625J1ZO 29,267.00 27,873.60 1,393.68 -0.28
Date Particular Expense Type 20,46,642.00 Amount
18,91,914.39 1,54,726.91 0.70
01-04-2022 Carriage Inwards Direct Expense 3,200.00

02-04-2022 Letters sent to suppliers Indirect Expense 750.00
03-04-2022 Brought Pencils, Pens, Letter pad Indirect Expense 500.00
04-04-2022 Pooja Expense Indirect Expense 850.00
05-04-2022 Petrol charges Conveyance 2,100.00
06-04-2022 Coolie Hamali Expenses Direct Expense 400.00
07-04-2022 Telephone Expenses Indirect Expense 600.00
08-04-2022 Entertainment Expenses Indirect Expense 750.00
09-04-2022 Salaries Sales & Marketing Expenses 25,000.00
10-04-2022 Commission Sales & Marketing Expenses 5,400.00
12-04-2022 Insurance Business & Administration Expense 11,800.00
13-04-2022 Travelling Expenses Sales & Marketing Expenses 8,000.00
17-04-2022 Bank Charges Economic & Other Expenses 240.00
19-04-2022 Packing & Store Supplies Expense Sales & Marketing Expenses 6,000.00
21-04-2022 Agent Commission Indirect Expense 1,000.00
22-04-2022 Lunch Expenses Sales & Marketing Expenses 1,500.00
23-04-2022 Electricity Office Indirect Expense 4,000.00
24-04-2022 Wages (labour) Direct Expense 3,800.00
26-04-2022 Freight to Transporter Direct Expense 5,000.00
27-04-2022 Tailoring Indirect Expense 4,800.00
28-04-2022 Accountant Fees Indirect Expense 5,000.00
56
1,07,090.00
lOMoARcPSD|39164267
Sales Summary for GSTR 1

B2B Summary
Date Invoice Party Name GSTN Taxable CGST SGST IGST Total
03/04/2022 0006 Soorya Collection 37AAAPD67891ZD 1,44,300.00 - - 7,215.00 1,51,515.00
04/04/2022 0009 Hanuman Textiles 27COOPF67892ZF 1,30,000.00 - - 6,500.00 1,36,500.00
06/04/2022 0023 Mordern Fabrics 29XUVFD23451ZI 97,500.00 2,437.50 2,437.50 - 1,02,375.00
06/04/2022 0028 HPT Creation 29AANPL00981ZH 2,75,000.00 16,500.00 16,500.00 - 3,08,000.00
07/04/2022 0033 Mordern Fabrics 29XUVFD23451ZI 1,40,400.00 3,510.00 3,510.00 - 1,47,420.00
09/04/2022 0038 HPT Creation 29AANPL00981ZH 1,10,000.00 6,600.00 6,600.00 - 1,23,200.00
10/04/2022 0049 Soorya Collection 37AAAPD67891ZD 91,000.00 - - 4,550.00 95,550.00
12/04/2022 0057 Singh & Sons 31AAQPN45321ZH 6,30,000.00 - - 75,600.00 7,05,600.00
15/04/2022 0068 Singh & Sons 31AAQPN45321ZH 78,000.00 - - 3,900.00 81,900.00
17/04/2022 0074 HPT Creation 29AANPL00981ZH 55,000.00 3,300.00 3,300.00 - 61,600.00
17/04/2022 0076 Mordern Fabrics 29XUVFD23451ZI 78,000.00 1,950.00 1,950.00 - 81,900.00
21/04/2022 0086 Singh & Sons 31AAQPN45321ZH 78,000.00 - - 3,900.00 81,900.00
21/04/2022 0089 Soorya Collection 37AAAPD67891ZD 52,000.00 - - 2,600.00 54,600.00
23/04/2022 0096 Poonam Sales Corporation 29CADCP75312ZF 57,000.00 1,425.00 1,425.00 - 59,850.00
28/04/2022 0106 Hanuman Textiles 27COOPF67892ZF 36,000.00 - - 1,800.00 37,800.00
23,25,200.00 42,547.50 42,547.50 1,06,065.00 25,16,360.00
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B2C Summary to be
Uploaded
Party Name GSTN Taxable CGST SGST IGST Total
Consum 2,34,771. 6,760.7 6,760.7 2,48,297

Cash er 00 3 3 - .00
Consum 3,353.8 3,353.8 1,02,541

Card er 95,830.00 8 8 - .00
Consum 1,71,290. 6,483.0 6,483.0 1,84,258

UPI er 00 5 5 - .00
5,01,891. 16,597. 16,597. 5,35,096

00 65 65 - .00
58

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HSN Summary to be
Uploaded
HSN code Qty Taxable CGST SGST IGST
28,27,091 59,145. 59,145. 1,06,065

5074 3,383.00 .00 15 15 .00
DocumentSum
mary
Sales Invoice
Bill No
Bill No from to Cancelled Total documents
0001 0122 0 0122
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GSTR 3B Summary
Particulars Taxable IGST CGST SGST

(
Outward Supply (Output A 28,27,091 1,06,065. 59,145. 59,145.
Liability) ) .00 00 15 15
Less:
(B 1,54,726.
Inward Supply ) 91 - -
Payable (B) - (A)
Being IGST Input Set off -48,661. 59,145. 59,145.

with IGST Output (1) 91 15 15
Excess IGST Set off with 48,661.9 -48,661

CGST then lastly SGST (2) 1 .91 -
Net Payable GST Liability for 10,483. 59,145.

the month of April 2022 - 00 00
60

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61

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62

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ANALYSIS & INTERPRETATION OF THE DATA

KEY POINTS TO CONSIDER (FOR TAX AUDIT)
 Cash Payments should not be more than 20,000/-
 Depreciation on the Assets are ascertained on the basis of their
date of purchase 100% depreciation for 1-6 months old used
assets
More than 6 months – 50% of rate of depreciation is charged
 Unsecured Loans for more than 20,000/- are not allowed to
paid in Cash.
 Ensuring that the proprietor has issued TDS certificates to
the contractors, to the salaried workers and professional
heads etc. for the job rendered by them to the
company.
 Timely deposit of the quarterly Income tax returns
 TDS is deducted, deposited and filing of the TDS
returns with the Income Tax department.
 Also, the Income tax returns are timely sent to the IT
department.
 Matching the challans of the payment of VAT, purchase bills.
 Yearly analysis of the GPR, NPR, Stock-in-trade turnover ratios
and ensuring there are no abnormal losses incurred by the
company.
 Checking and tallying the bills of expenditures, rent, purchases
etc.
 Matching the Sales figures with the Sales tax returns and
purchases figures from DVAT
 Examining whether the stock-in-trade ratio is higher or smaller
 Analysis of the current debtors
Ensuring they must be just 3 months old otherwise create

provisions for bad debts for the debtors who are more than 6
months old.
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Chapter - 05
Summary of Findings, Recommendations and
Conclusion
 Summary of Findings
The findings drawn are as follows:
 Cash Payments are not more than 20,000/- and there is timely
payment to the creditors
 Depreciation on the Assets are ascertained on the basis of their
date of purchase 100% depreciation for 1-6 months old used
assets More than 6 months – 50% of rate of depreciation is
charged Mostly, the rate of depreciation used is at 18%.
 Unsecured Loans for more than 20,000/- are paid in Cash rather
they are paid through cheques and there is no bouncing of
those cheques observed.
 The proprietor has issued TDS certificates to their contractors,
to the salaried workers and professional heads etc. for the job
rendered by them to the company and also, they have been
issued the TDS certificates from the financial institutions.
 There has been timely deposit of the quarterly Income tax
returns as well as of sales tax returns which are tallied through
the sales tax website.
 TDS has been deducted, deposited and filing of the TDS returns
with the Income Tax department.
 Also, the Income tax returns are timely sent to the IT
department.
 The challans of the payment of VAT, purchase bills provided by
the clients are matching and hence, entered in the tally ERP
software.
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lOMoARcPSD|39164267
 Yearly analysis of the GPR, NPR, Stock-in-trade turnover ratios

and the business ensured that there are no abnormal losses
incurred by the company.
 Also, where there is higher stock-in-turnover ratio the firms
have been advised to hold the stocks and for the smaller ratios,
it suggested that the businesses are having good and the faster
flow of the stock movement.
 The bills of expenditures, rent, purchases are checked and
tallied etc.
 The Sales figures are in accordance with the Sales tax returns
and purchases figures from DVAT.
 Also, there has been no undue shortage or misappropriation of
funds observed along with the all the payments and incomes
statements in accordance with the figures mentioned in the
financial statements.
 Many clients’ business was observed that they set-off their
liabilities early and there was little delay in the payments to the
creditors and there has been less delay.
 Analysis of the current debtors: Ensuring they must be just 3
months old otherwise create provisions for bad debts for the
debtors who are more than 6 months old.
 The Relevant Tax Authority (RTA) employed tax audit
towards achieving target revenue.
 Tax audit reduces the problems of tax evasion, tax
avoidance and other tax irregularities.
 Tax audit aimed at ensuring the submission of accurate and
current returns for proper computation.
 Awareness on tax rules and regulation increase compliance and
reduce non-compliance tax payers
 That one of the reasons behind the tax audit is the suspicion
over the returns submitted by the tax payers.
 Tax payers do not usually co-operate with the tax audit
personnel during the exercise.
65

lOMoARcPSD|39164267
 Tax audit improves the level of tax compliance by the tax

payers.
 No effective sanctions over the non-compliance tax
payers with the tax rules and regulations.
 The personnel conducting the tax audit are skilful in the area of
tax audit.
 The tax audit personnel are not adequate and
equipped with necessary working materials.
 Recommendations
After the completion of the study, according to my
opinion, there still exists a possibility that biased approach
can be adopted by many CA ‘s performing the tax audits for the
companies. Though, ICAI has laid many stringent and strict rules
and regulations for maintaining the ethics always and there has
been heavy emphasis by them on the authorized audit
performance to give their judgments based on the facts which
are there in front of them and to their best knowledge without
having any undue influence of the particular clients for whom
they are performing the audit.
Also, the data provided to the CA’s are given by the companies
is not ensured that there is no falsification of the facts
mentioned hence, they need to perform internal audits and the
various kinds of audits which are not statutory in nature along
with those which are such as company audit. So that, when the
financial statements reach the CA is ensured to be true in all
sense.
 The Relevant tax authority at all levels should
improve the standard of tax audit employed for
effectiveness and efficiency.
66

lOMoARcPSD|39164267
 Tax audit should aim at reducing more problems of tax

evasion, tax avoidance and other tax irregularities for
standardization.
 The scope of tax audit should be wider in such
a way that will ensure proper submission of accurate
and current returns for proper computation.
 The RTA should provide a policy to the public on the
awareness of the importance of tax payment and the
effect of non-tax payment, so that the level of compliance
would be high and non-compliance will be low or even
none.
 The tax payers should have God fearing and submit the
accurate returns of their operation.
 RTA should also provide a policy that would allow the tax
payers to co-operate during the period of tax audit and at
the same time the tax payers should do their best toward
cooperating with the tax audit personnel during the
period of the exercise.
 RTA should also improve the standard of tax audit
personnel so that they can highly improve the level of tax
compliance by the tax payers.
 There should be effective sanctions by RTA over the non-
compliance tax payers with the tax rules and regulation.
Hence, it is advisable that in spite of indulging in

falsifications of the facts, companies should ensure that
they bring forth the right facts and not involved in tax
evasion activities also.
 Conclusion
67

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The primary goal of this project report was to identify the need
and the requirement for a company to conduct tax audits.
It showed that unless and until the companies conducts
of their accounts how will the assessor be able to ensure that
the figures and the data mentioned in the financial statements
by the companies are actual.
Audit of accounts in the corporate sector was always

mandatory by virtue of the provisions of The Companies Act,
1956. Realizing the importance of audit this requirement has
been extended to non-corporate assesses. Since by virtue of sec
44AB all assesses irrespective of their nature, if they fulfil the
criteria as laid out in the section have to get their accounts
audited.
The intention of bringing in this piece of legislation as observed

by the Finance Minister while presenting the Union Budget for
1984-85 is the compulsory audit is intended to ensure proper
maintenance of books of accounts and other records, in order
to reflect the true income of the tax payer and to facilitate the
administration of tax laws by a proper presentation of the
accounts before the tax authorities. This would also save the
time of the Assessing Officers considerably in carrying out the
verification.
The project study conducted helped in examining the

areas which are of upmost importance to be considered
while preparation of the audit report. The in-depth analysis of
the particular client’s financial statements helped in
analysing their growth, performance and any abnormal losses
occurrence.
68

lOMoARcPSD|39164267
The project also discussed about how chartered accountants’

firms conducts tax audit of the client’s companies’ accounts
which is statutory in nature and what are the various types of
advanced auditing which companies can incorporate so that
their growth, performance is increased. Also, while gathering
the information it was observed that the clients of the
KRISHNA ASSOCIATES are loyal and there is high
customer satisfaction meaning that these companies come to
the KRISHNA ASSOCIATES since they offer best services thereby
maintaining the ethics of the advisory. Hence, This study could
be concluded with the mentioning of there is a liability for the
assesse irrespective of their taxable income of Tax Audit.
69

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Audit tax project

Services Marketing (S. P. Jain Institute of Management and Research)

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S. NO. TABLE OF CONTENT PAGE NO.

2 Industry and Company Profile

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The complexity of law doesn’t allow every individual to understand

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This helps in identifying the areas of underperformance and those

 TYPES OF AUDIT REPORT:

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Krishna Associates is a Professional Body in the service sector

Krishna Associates also provides other services which include

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An unbiased or clean opinion from an auditor gives consumers

Although not working internally, consultant auditors use the

 What is a Tax Audit?

 Tax Audit refers to the verification of the books of accounts of

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form an opinion on matters related to taxation compliances

 Importance of Tax Audit in Organisation

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 Who cannot be a tax auditor?

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 The Chartered Accountant who is assigned with the task of

 Effectiveness of Tax Audit on an Organization

Since Tax Audit is the re-evaluation of a company’s role as a

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V. A Tax Audit increases the credibility of the business and avoids

 Typical matters examined during Tax Audit

The auditors check the following typical areas during the

I. Whether the given details about the company's business

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 Relevant records to be kept for the audit

Article78 of the Federal Decree Law of the Government states

1) The records of all supplies and Imports of Goods and Supplies

- Due Tax on Taxable Supplies

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 The following other sections under the Income Tax

Section 44BB: For Non-Resident Indians (NRIs) involved in the

 What triggers a tax audit?

 Having higher than average income

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India has emerged as a preferred destination for business in the

A Manager is appointed to take day to day small decisions of the firm

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