Step By Step Guide To Tax Audit for AY 2015-16

Step By Step Guide To Tax Audit for AY 2015-16, Recently CBDT Issued Notification for No extension of Tax Audit Due date for AY 2015-16 So Now this is clear that CBDT not extend due date of Tax Audit for AY 2015-16. Due date of Tax audit is now confirmed is 30th September 2015, Here we are providing Step By Step Guide on Tax Audit for AY 2015-16. Check complete steps for How to do Tax Audit For AY 2015-16. In this article you can find all steps for how to do tax audit for ay 2015-16. Recently we provide details for Tax Audit – All About You want to Know. Now you can scroll down below and check more details for “Step By Step Guide To Tax Audit for AY 2015-16”

We understand, it is a high time for all CA’s & also for their article trainees. So, here is a step by step guide on how to do a Tax Audit.

Step 1: Get all the books of accounts of your client for the previous year whose audit is being conducted.

Step 2: Read the form 3CD & try to keep in mind or make a separate checklist of the details which are required to completely fill up the form 3CD. Some of this information can be about – the details of fixed asset, details of inventory, previous report data, payments made to related persons, payments exceeding Rs. 20,000/- made during this previous year, etc. Also, Don’t forget to take the details about TDS deducted by the assessee and also the details of Indirect Taxes paid by the assessee.

Step 3: Check the opening balances from the previous report. This is an important step & if any of the opening balances do no tally with the previous year’s report, we will face difficulty in making the Balance Sheet of the current year.

Step 4: VOUCHING

This is one of the most important steps in doing a Tax Audit. Vouching involves the complete checking of all the vouchers of the enterprise. Detecting the possibility of any misrepresentation or fraud done by the client is very probable at this step. Utmost care should be taken & all the vouchers should be thoroughly checked. Commonly we do cash expenses vouching, bank expenses vouching, purchase vouching, sales vouching, etc.

Step 5: Bank Reconciliation

In order to verify whether all the transactions related to bank have been duly accounted, we verify the bank book with the bank statements. If there is a mismatch of some transactions, we prepare a BRS i.e., a Bank Reconciliation Statement.

Step 6: Check whether payments exceeding Rs. 20,000/- in cash have been made? If the same are done, they need to be reported in our report. Also, we should make sure that cash is not going negative in the books of accounts in any part of the year.

Step 7: Prepare the Balance Sheet & the Profit & Loss Account

As we have to upload the scanned copies of the financial statements with our Tax audit report, make sure we make CA certified Financial Statements first & get scanned copies of the same ready.

Step 8: Ledger Scrutiny

Make sure all the ledgers of your client have been carefully overlooked by you. The general nature of the ledger & the transactions present in the ledger do not show anything unusual or exceptional. In case, it does, make sure you receive satisfactory explanation of the same from your client. Otherwise, the auditor should appropriately classify his report.

Step 9: Proper Notes & Disclosures

If you find anything worth mentioning in Step 8 or non – compliance of any of the Accounting Standards, the same should be properly reported by you, the auditor.

Step 10: You need to fill up the form 3CA-3CD or 3CB-3CD, as required and generate .xml to be uploaded. Also, make sure you have up to date DSC of the auditing CA as well as of the client assessee.

Step 11: Go to https://incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome.html. Sign in from your client’s profile & Go to ADD CA option from My Account drop down menu. After Adding your CA, the auditor needs to sign in from his profile made for uploading the report & upload the tax audit report along with the scanned copies of financial statements. After this done, we need to again go the client’s profile & approve the tax audit report. With this, we complete the submission of the Tax Audit Report with the CBDT.