Indian tax authorities have once again pressurized chartered
accountants’ (CAs) community for tax audits under the income tax law.
Several changes are now being proposed to be effective from June 1, on the eligibility criteria for CAs to undertake attestation (audit/certification) work.
These are to be implemented through a change in the meaning of an “accountant” in the income tax
law, a proposal to this effect has been made in the latest budget.
The overall objective seems to be to avoid conflict of interest and enhance comfort to the revenue authorities on the findings of tax audit reports.
More rigors are being brought into the aspect of judging “independence” of CAs, whose audit/certification is usually accepted by Indian tax authorities.
With the audit/certification work of CAs intended to protect the interest of the revenue, the Centre is of the view that an auditor who is not independent cannot meaningfully discharge his function of protecting the interest of revenue.
So, the latest budget has now proposed that a person who is not eligible to be appointed as an auditor of a company will not be eligible to carry out attest functions under the income tax law.
Also, detailed restrictions have been proposed on CAs as regards tax audit reports on non-corporate assesses where they have financial interest either directly or through relatives.
It is also now proposed that only CAs with full time certificate of practice could undertake attest functions under the income tax law.
This would mean that members of the CA Institute with part-time certificate of practice cannot legally attest reports for income tax purposes.
Currently, the income tax law, for the meaning of an accountant does not distinguish between CAs holding a certificate of practice and others.
This was misinterpreted as if the reports can be issued by any CAs whether he holds the certificate of practice or not, according to G Ramaswamy, former CA Institute President.
Now, the proposed amendment clarifies that those who are holding a valid (full time) certificate of practice only are eligible to issue such reports, Ramaswamy told Business Line.
Several changes are now being proposed to be effective from June 1, on the eligibility criteria for CAs to undertake attestation (audit/certification) work.
These are to be implemented through a change in the meaning of an “accountant” in the income tax
law, a proposal to this effect has been made in the latest budget.
The overall objective seems to be to avoid conflict of interest and enhance comfort to the revenue authorities on the findings of tax audit reports.
More rigors are being brought into the aspect of judging “independence” of CAs, whose audit/certification is usually accepted by Indian tax authorities.
With the audit/certification work of CAs intended to protect the interest of the revenue, the Centre is of the view that an auditor who is not independent cannot meaningfully discharge his function of protecting the interest of revenue.
So, the latest budget has now proposed that a person who is not eligible to be appointed as an auditor of a company will not be eligible to carry out attest functions under the income tax law.
Also, detailed restrictions have been proposed on CAs as regards tax audit reports on non-corporate assesses where they have financial interest either directly or through relatives.
It is also now proposed that only CAs with full time certificate of practice could undertake attest functions under the income tax law.
This would mean that members of the CA Institute with part-time certificate of practice cannot legally attest reports for income tax purposes.
Currently, the income tax law, for the meaning of an accountant does not distinguish between CAs holding a certificate of practice and others.
This was misinterpreted as if the reports can be issued by any CAs whether he holds the certificate of practice or not, according to G Ramaswamy, former CA Institute President.
Now, the proposed amendment clarifies that those who are holding a valid (full time) certificate of practice only are eligible to issue such reports, Ramaswamy told Business Line.
No comments:
Post a Comment