Audit and Assurance

Internal Audit

Internal audit is the task of reviewing the internal process and internal control to ensure efficiency and economy of resource utilization. The purpose of an internal audit is to check the effectiveness and operational standards framed by an organization. An organization may have a set of rules for operations, such as placing orders, accepting deliveries, and making payments. An internal audit also helps in knowing whether the employees follow the internal operational standards. This makes it essential to review all the operations, process and internal controls of the entity and also evaluate the effectiveness of management.

Tax Audit

A tax audit is the process of verification and inspection of the accounts of a taxpayer to confirm their adherence to the provisions of the Income Tax law. Section 44AB of the Income Tax Act, 1961 deals with the Audit of the Accounts of a certain category of persons carrying on a business or engaged in a profession. The class of taxpayers listed under this section compulsorily have to get their accounts audited by a Chartered Accountant. The CA will check and verify that these accounts comply with the various provisions of the Income Tax law. Simply put, the audit that is required as per Section 44AB of the Income Tax Act, 1961 is called a tax audit.

Statutory Audit

Statutory Audit is an audit required under by the statute governing the entity, performed by an independent person with the end objective to provide opinion whether the financial statements give a true & fair view of the company & whether the same are free from material misstatements whether arising due to fraud or error during the year. Its primary purpose is to gather all relevant information so that the auditor can give his opinion on the true and fair view of the company’s financial position as on the balance sheet date.

Due Diligence Audit

Due diligence is a review or examination of a company’s financial records before entering a transaction with counter parties. The purpose of due diligence is to confirm facts given by the company and ensure it abides by standard practices. The procedure of due diligence audit identifies financial and legal vulnerabilities involved with investing resources in a specific business. It creates the basis for generating a report expressing the authenticity of a concerned business and its whole set of assets. Experts in this field provide consultancy on how to reduce investment risks while proceeding to buy parts of a company. With this being discussed let us now move on to the next part of our discussion where we are going to talk about the three fundamental elements of due diligence auditing and try to figure out how they are interconnected.

Management Audit

Management audit means the examination, review of various policies and action of the management on the basis of certain specified objectives. The management audit is conducted to critically evaluate the activities and efficiency of the management. It is an independent appraisal activity. Management Audit is of recent origin as compared to statutory audit. Management Audit is otherwise called Operational Audit. When the functions of the statutory auditor expanded, the need arose for the review of the management process.

GST Audit

Audit under GST involves an examination of records, returns, and other documents maintained by a GST registered person. It also ensures the correctness of turnover declared, taxes paid, refund claimed, input tax credit availed, and assesses other such compliances under GST Act to be checked by an authorized expert. Since GST is self -an assessment tax regime, an audit of the records of taxpayers is the bedrock for the proper functioning of a self-assessment-based tax system to ensure the accuracy of self-assessed tax liability, the tax paid, amount of refund claimed and input tax credit availed.