SHRI ONKARMAL SOMANI COLLEGE OF COMMERCE

PROJECT REPORT ON CHARTERED

ACCOUNTANTS
2013-2014


SUBMITTED BY:
KHEMCHAND DEVNANI
B.B.A. V SEM
ACKOWLEDGEMENT

Our personality are based on the foundation of education imparted
by one teacher who are next to god.
I wish to Mr. Ajay Chordia (designation) Proprietor of A.Chordia & Co.
Chartered accountants for giving me this opportunity to do y dissertation
with A.Chordia & Co. I also wish to acknowledge him for his continous
and unmatched guidance till the completion of the training period.
I also express my gratitude towards staff of A.Chordia & Co. for
providing me valuable inputs, supervision and cooperation throughout
the period of my research project, which helped me in successful
completion of my project. I express my gratitude to Shri Onkarmal
Somani College Of Commerce for providing me with this opportunity
and constant guidance.

Khemchand Devnani
B.B.A V Semester





CONTENT
S.No Particulars Page
1 INTRODUCTION 2-5
2 BRIEF HISTORY OF ACCOUNTING IN
INDIA
6-7
3 FIRM PROFILE 8-14
4 TYPES OF AUDIT REPORT 14-23
5 TAX PLANNING 24-27
6 ACCOUNTING STANDARDS 28-29
7 AUDITING AND ASSURANCE
STANDARDS
30-33
8 RESEARCH METHODOLOGY 34-46
10 BIBLIOGRAPHY 47
11 QUESTIONNAIRE 48




Introduction
Chartered accountants provide trustworthy information about financial
records. This might involve them in financial reporting, taxation,
auditing, forensic accounting, corporate finance, business recovery and
insolvency, or accounting systems and processes. Generally, they play a
strategic role by providing professional advice, aiming to maximise
profitability on behalf of their client or employer. They work in many
different settings including public practice firms, industry and
commerce, as well as in the not-for-profit and public sectors.
In public practice firms, chartered accountants provide professional
services to fee-paying clients who might be private individuals or large
commercial or public sector organisations. In commerce, industry and
the not-for-profit and public sectors, they may work in treasury
management, procurement, financial management or in reporting roles.
With the rapid growth in economy, careers in finance and accounts have
gained tremendous popularity and the most prestigious career option in
this filed is that of Chartered Accountant. Chartered Accountancy is a
dynamic, challenging and rewarding profession. All the countries have
their own Accountancy Association which regulates the quality and
quantity of the professionals in this field. Chartered Accountancy Course
is a professional course in Accounting introduced in our country in
1949, with the enactment of the Chartered Accountants Act. The
Institute of Chartered Accountants of India (ICAI) was formed the same
year . This Institute is both an examining and a licensing body. It is the
responsibility of the institute to conduct the Chartered accountancy (CA)
Course. The course involves a blend of theoretical education and
practical training which run concurrently for a period of three years and
equips a student with knowledge, ability, skills and other qualities
required of a professional accountant.
A Chartered accountant is one who is specialised in accounting, auditing
and taxation. He also serves as a management and corporate caretaker.
In recent times, accountancy has become popular as a profession. The
services of a CA is required in money matters even in a small business .
Moreover according to the Company Act only CA's in professional
practice are allowed to be appointed as auditors of companies in India. A
chartered accountant is a person who is accepted as a member of the
Institute of Chartered Accountants of India (ICAI) after having passed
the Final examination of the Chartered accountancy course conducted by
the institute.
Many multinational companies have come forward in the Chartered
Accountancy field. ICICI Prudential, Om Kotak Mahindra, Birla Sun-
Life, Tata AIF Life, Reliance, HDFC Standard Life-Chartered
Accountancy Co., Max New York Life, SBI Life Chartered
Accountancy, ING Vysya Life etc. are the top companies in the private
sector. In non-life Chartered Accountancy segment, major private
players are ICICI Lombard, Royal Sundaram, Cholamandalam, IFFCO
Tokyo, Tata AIG etc. All Chartered Accountancy companies come
under the Chartered Accountancy Regulatory and Development
Authority (IRDA) which is established to regulate, promote and ensure
orderly growth of Life and General Chartered Accountancy industry in
India.
CA programme is a professional course which has three sections
namely, Common Proficiency Test (CPT); Integrated Professional
Competence Course (IPCC) and Final Course. The registration for CPT
and IPCC is open throughout the year. A student may register at any
time during the year. However, as the examinations will be held twice a
year in May and November, it is necessary that a student must register at
least ten months before the examinations. After passing the Integrated
Professional Competence Course (IPCC) candidates are eligible for
registration as articled clerks/ audit clerks for practical training.
Computer Training Programme, ie 100 hours Information Technology is
compulsory for the candidates who wish to register themselves as
auditor clerk. Students can undergo this programme while pursuing CPT
or IPCC.
Articled clerk is a trainee attached to a practicing chartered accountant
under a Deed of Articles for the duration three years. During this period
the articled clerk will also need to continue studies for the CA exam. An
audit clerk is a person who has served as a salaried employee for a
minimum period of one year under a practicing chartered accountant.
During the training period, candidates would be required to work in
different areas learning the basics of auditing and taxation . This training
enables them to learn the technical details of the job as well as to get an
idea of the working environment of the profession.
The scope for this lucrative career is bright in an economically
developing nation like ours and as such the career can be termed as
challenging and rewarding for competent professionals in the field.

















A Brief History Of Accounting In India

1857 The first ever Companies Act in India legislated.
1866 Law relating to maintenance of accounts and audit thereof
introduced.

Formal qualification as auditor now required.
1913 New Companies Act enacted.

Books of accounts to be maintained specified.

Formal qualification to act as auditor named. A Certificate from
the local government to be held in order to act as auditor. An
unrestricted Certificate entitled a person to act as auditor
throughout British India. A Restricted Certificate entitled him to
act as auditor only within the Province concerned and in the
languages specified in the certificate.
1918 Government Diploma in Accounting (GDA) launched in
Bombay. On completion of articleship of three years under an
approved accountant and passing the Qualifying Examination
the candidate would become eligible for the grant of an
Unrestricted Certificate.
1920 The issue of Restricted Certificates discontinued.
1927 Society of Auditors founded in Madras.
1930 Register of Accountants (RA) to be maintained by the
Government of India to exercise control over the members in
practice. Those whose names found entry here were called
Registered Accountants (RA).
1930 The Governor General in Council replaced the local government
as the statutory authority to grant certificates to persons entitling
them to act as auditors.

Auditors allowed to practice throughout India.
1932 First Accountancy Board formed. The Board was to advise the
Governor General in Council on matters relating to accountancy
and to assist him in maintaining standards of qualification and
conduct required of auditors.
1933 First examination held by the Indian Accountancy Board. GDAs
exempted from taking the test.
1935 The first Final Examination was held. GDAs exempted from
taking the test.
1943 GDA abolished.
1948 Expert Committee formed to examine the scheme of an
autonomous association of accountants in India.
1949 The Chartered Accountants Act, 1949 was passed on 1st May.
The term Chartered Accountant came to be used in place of
Indian Registered Accountants.

Chartered Accountants Act was brought into effect on 1st July.
The Institute of Chartered Accountants of India is born.
1999 ICAI completed 50 years on 1st July 1999.


















Firm Profile

Services Provided
AUDIT

The firm has vast & varied experience in conducting all types of Audits
for large & medium sized business entities including Audit of Public
Sector Undertakings. The firm also has the expertise to prepare
financial statements in accordance with International Accounting
Standards (IAS)

The various types of audits conducted by the firm are :








TAXATION

Direct Taxation:
-corporate, Individuals



Indirect Taxation:


Audits & periodical Audits Consultancy and
Representation.


COMPANY LAW MATTERS





egal matters

OUTSOURCING
Our Outsource Accounting Services Division offers individuals and
businesses of all sizes a full range of service options to complement
and complete your internal accounting and administration needs. You
can avail the services of a full-blown accounting department by
outsourcing these services through A.Chordia & Co..

The effective and efficient use of manpower is a major element for
achieving success. Company after company has come to the
realization that investing in and maintaining large-scale in-house
departments may not make business sense for rapidly growing
companies. Relying upon an external organization to supply critical
support services will provide your company with access to a wealth
of intellectual capital without the necessity of investing in
infrastructure.
The bottom line: You concentrate on your core competency while we
devote all of our energies and resources to take care of your non-core
functions - efficiently and cost effectively.

We evaluate the accounting needs of new and growing businesses
and offer complete solutions for the most efficient and effective
operation of an accounting and record-keeping system. Our goal is to
develop a system that will meet the financial reporting requirements
of your company. Whether your business requires assistance with
periodic bookkeeping or implementation of a fully computerized
accounting system, we maximize your existing resources to provide
the best solutions.

As a provider of financial services in the world of outsourcing, we
can provide you with financial reporting, general ledger accounting,
consolidations, budgeting, management reporting, billing, accounts
payable / accounts receivable, expense reporting etc.


Corporate Finance
Corporate Finance is a long-term business strategy, characterised by
extensive lead-time before deals are finalised. Locating the time and
cost effective sources of finance for your project is our strength. Be it
Equipment Finance, Short or Long Term Funds, Trade Finance,
Structured Finance or any other product, our team studies the options
available, then sources the most beneficial route for our clients. From
Capital Structuring to Feasibility Studies to Project Appraisal to
sourcing funds, we take care of entire transaction. Our knowledge of
the current investment scenario and understanding of specific needs,
enable us to deliver cost competitive solutions.

Advisory Services
With the entry of MNC's and globalisation of Indian economy,
restructuring of organisations through Mergers and Joint Ventures are
the strategies for survival. To seek and identify a sound business
partner, suggest economically viable projects and arrange technical and
financial collaborations are our core competency.
We arrange technical and financial collaboration, assist in the
preparation of necessary project documentation and get statutory
approval required for the project.


SERVICES TO NON-RESIDENTS
We offer Non-Resident Indians as well as foreign national a complete
range of services.
We assist Non-Residents in managing their Investment Portfolio, Tax
Returns, getting RBI clearances or complying with statutory
obligations? We offer you a range of services which include the
following :

t Advisory.
- you can be
updated on a daily basis.



We offer a complete range of service from the simple task of
depositing your interest/dividend warrants in your account to preparing
your accounts, filing tax returns and obtaining permission/clearances,
advice on your investments and portfolio advisory services. All this is
done by keeping you well informed on a daily basis through the
Internet.
In short, you are in control of your activities in India without having to
be here. Receive statements, reports, accounts and any other
information daily.
Financial Reporting
The Financial Reporting will provide you with instant access to your
accounting records. You can inspect individual account detail and view
scanned images of original support documents. We can also provide
you with trial balances, general ledgers and cash flow reports that are
updated daily. The reports are in electronic form so that you can view
them on-screen or print them out. In addition, we can customize reports
to help you run your business more effectively.
Simplify your accounting today!
Now with Financial Outsource Services, you can make those critical,
day-to-day decisions with timely, accurate and easy-to-understand
financial information. You'll also enjoy a greater sense of control and
security by having your accounting data reviewed by a trusted third
party. And finally, you can have it all for a fraction of the cost of
maintaining an in-house accounting staff.

Why Outsource From Us


morning.


SETING UP OF OPERATIONS
We assist foreign companies to setup businesses in India by not only
advising them about the foreign investment policy & procedures of the
government of India but also obtain all necessary approvals etc.

The services rendered in this area include the following :

other registrations like
income tax, sales tax, vat etc.

India, Foreign Investment Promotion Board (FIPB) & other
Government Departments.
accounting systems etc.
We provide valuable inputs on the most tax friendly options while
conceptualizing the business / investment strategy.
We also provide our expert advice on all other investment
opportunities in India like investment in real estate, capital

RISK CONSULTING

-Oxley Compliance



Internal Audit




CORPORATE ADVISORY SERVICES

Merger & Acquisitions



Capital Raising


Due Diligence





-Merger Integration Services


Valuation Services









Auditors report on financial statements
It is important to note that auditor's reports on financial statements are
neither evaluations nor any other similar determination used to evaluate
entities in order to make a decision. The report is only an opinion on
whether the information presented is correct and free from material
misstatements, whereas all other determinations are left for the user to
decide.
Types Of Audit Report
Unqualified Opinion
An opinion is said to be unqualified when the Auditor concludes
that the Financial Statements give a true and fair view in
accordance with the financial reporting framework used for the
preparation and presentation of the Financial Statements. An
Auditor gives a Clean opinion of Unqualified Opinion when he or
she does not have any significant reservation in respect of matters
contained in the Financial Statements. The most frequent type of
report is referred to as the Unqualified Opinion, and is regarded by
many as the equivalent of a clean bill of health to a patientwhich
has led many to call it the Clean Opinion, but in reality it is not a
clean bill of health. This type of report is issued by an auditor
when the financial statements presented are free of material
misstatements and are represented fairly in accordance with the
Generally Accepted Accounting Principles (GAAP), which in
other words means that the companys financial condition,
position, and operations are fairly presented in the financial
statements. It is the best type of report an auditee may receive from
an external auditor.

An Unqualified Opinion indicates the following
1. The Financial Statements have been prepared using the Generally
Accepted Accounting Principles which have been consistently
applied;

2. The Financial Statements comply with relevant statutory
requirements and regulations;

3. There is adequate disclosure of all material matters relevant to the
proper presentation of the financial information subject to
statutory requirements, where applicable;

4. Any changes in the accounting principles or in the method of
their application and the effects thereof have been properly
determined and disclosed in the Financial Statements.

5. The report consists of a title and header, a main body, the
auditors signature and address, and the reports issuance date.
US auditing standards require that the title includes
"independent" to convey to the user that the report was unbiased
in all respects. Traditionally, the main body of the unqualified
report consists of three main paragraphs, each with distinct
standard wording and individual purpose, however certain
auditors (including PricewaterhouseCoopers) have since modified
the arrangement of the main body (but not the wording) in order
to differentiate themselves from other audit firms.

6. The first paragraph (commonly referred to as the introductory
paragraph) states the audit work performed and identifies the
responsibilities of the auditor and the auditee in relation to the
financial statements. The second paragraph (commonly referred
to as the scope paragraph) details the scope of audit work,
provides a general description of the nature of the work,
examples of procedures performed, and any limitations the audit
faced based on the nature of the work. This paragraph also states
that the audit was performed in accordance with the countrys
prevailing generally accepted auditing standards and regulations.
The third paragraph (commonly referred to as the opinion
paragraph) simply states the auditors opinion on the financial
statements and whether they are in accordance with generally
accepted accounting principles

Qualified Opinion report
A Qualified Opinion report is issued when the auditor encountered one
of two types of situations which do not comply with generally accepted
accounting principles, however the rest of the financial statements are
fairly presented. This type of opinion is very similar to an unqualified or
clean opinion, but the report states that the financial statements are
fairly presented with a certain exception which is otherwise misstated.
The two types of situations which would cause an auditor to issue this
opinion over the Unqualified opinion are:
Single deviation from GAAP this type of qualification occurs when
one or more areas of the financial statements do not conform with
GAAP (e.g. are misstated), but do not affect the rest of the financial
statements from being fairly presented when taken as a whole. Examples
of this include a company dedicated to a retail business that did not
correctly calculate the depreciation expense of its building. Even if this
expense is considered material, since the rest of the financial statements
do conform with GAAP, then the auditor qualifies the opinion by
describing the depreciation misstatement in the report and continues to
issue a clean opinion on the rest of the financial statements.

Limitation of scope - this type of qualification occurs when the
auditor could not audit one or more areas of the financial statements,
and although they could not be verified, the rest of the financial
statements were audited and they conform GAAP. Examples of this
include an auditor not being able to observe and test a companys
inventory of goods. If the auditor audited the rest of the financial
statements and is reasonably sure that they conform with GAAP, then
the auditor simply states that the financial statements are fairly
presented, with the exception of the inventory which could not be
audited.
The wording of the qualified report is very similar to the Unqualified
opinion, but an explanatory paragraph is added to explain the reasons for
the qualification after the scope paragraph but before the opinion
paragraph. The introductory paragraph is left exactly the same as in the
unqualified opinion, while the scope and the opinion paragraphs receive
a slight modification in line with the qualification in the explanatory
paragraph.
The scope paragraph is edited to include the following phrase in the first
sentence, so that the user may be immediately aware of the qualification.
This placement also informs the user that, except for the qualification,
the rest of the audit was performed without qualifications:
Except as discussed in the following paragraph, we conducted
our audit...
The opinion paragraph is also edited to include an additional phrase
in the first sentence, so that the user is reminded that the auditors
opinion explicitly excludes the qualification expressed. Depending on
the type of qualification, the phrase is edited to either state the
qualification and the adjustments needed to correct it, or state the
scope limitation and that adjustments could have but not necessarily
been required in order to correct it.
For a qualification arising from a deviation from GAAP, the
following phrase is added to the opinion paragraph, using the
depreciation example mentioned above:
In our opinion, except for the effects of the Companys incorrect
determination of depreciation expense, the financial statement
referred to in the first paragraph presents fairly, in all material
respects, the financial position of
For a qualification arising from a scope of limitation, the
following phrase is added to the opinion paragraph, using the
inventory example mentioned above:
In our opinion, except for the effects of such adjustments, if any,
as might have been determined to be necessary had we been able
to perform proper tests and procedures on the Companys
inventory, the financial statement referred to in the first paragraph
presents fairly, in all material respects, the financial position of
Due to the phrases added to the scope and opinion paragraphs,
many refer to this report as the Except-For Opinion.


Adverse Opinion report
An Adverse Opinion is issued when the auditor determines that the
financial statements of an auditee are materially misstated and, when
considered as a whole, do not conform with GAAP. It is considered the
opposite of an unqualified or clean opinion, essentially stating that the
information contained is materially incorrect, unreliable, and inaccurate
in order to assess the auditees financial position and results of
operations. Investors, lending institutions, and governments very rarely
accept an auditees financial statements if the auditor issued an adverse
opinion, and usually request the auditee to correct the financial
statements and obtain another audit report.
Generally, an adverse opinion is only given if the financial statements
pervasively differ from GAAP. An example of such a situation would be
failure of a company to consolidate a material subsidiary.
The wording of the adverse report is similar to the qualified report. The
scope paragraph is modified accordingly and an explanatory paragraph
is added to explain the reason for the adverse opinion after the scope
paragraph but before the opinion paragraph. However, the most
significant change in the adverse report from the qualified report is in
the opinion paragraph, where the auditor clearly states that the financial
statements are not in accordance with GAAP, which means that they, as
a whole, are unreliable, inaccurate, and do not present a fair view of the
auditees position and operations.

Disclaimer of Opinion report
A Disclaimer of Opinion, commonly referred to simply as a Disclaimer,
is issued when the auditor could not form, and consequently refuses to
present, an opinion on the financial statements. This type of report is
issued when the auditor tried to audit an entity but could not complete
the work due to various reasons and does not issue an opinion. The
disclaimer of opinion report can be traced back to 1949, when the
Statement on Auditing Procedure No. 23: Recommendation Made To
Clarify Accountants Representations When Opinion Is Not Expressed
was published in order to provide guidance to auditors in presenting a
disclaimer.
[
Statements on Auditing Standards (SAS) provide certain
situations where a disclaimer of opinion may be appropriate:
A lack of independence, or material conflict(s) of interest, exist
between the auditor and the auditee (SAS No. 26)
There are significant scope limitations, whether intentional or not,
which hinder the auditors work in obtaining evidence and
performing procedures (SAS No. 58);
There is a substantial doubt about the auditees ability to continue as
a going concern or, in other words, continue operating (SAS No. 59)
There are significant uncertainties within the auditee (SAS No. 79).
Although this type of opinion is rarely used, the most common examples
where disclaimers are issued include audits where the auditee willfully
hides or refuses to provide evidence and information to the auditor in
significant areas of the financial statements, where the auditee is facing
significant legal and litigation issues in which the outcome is uncertain
(usually government investigations), and where the auditee has going
concern issues (the auditee may not continue operating in the near
future). Investors, lending institutions, and governments typically reject
an auditees financial statements if the auditor disclaimed an opinion,
and will request the auditee to correct the situations the auditor
mentioned and obtain another audit report.
A disclaimer of opinion differs substantially from the rest of the
auditors reports because it provides very little information regarding the
audit itself, and includes an explanatory paragraph stating the reasons for
the disclaimer. Although the report still contains the letterhead, the
auditees name and address, the auditors signature and address, and the
reports issuance date, every other paragraph is modified extensively,
and the scope paragraph is entirely omitted since the auditor is basically
stating that an audit could not be realized.
In the introductory paragraph, the first phrase changes from We have
audited to We were engaged to audit in order to let the user know
that the auditee commissioned an audit, but does not mention that the
auditor necessarily completed the audit. Additionally, since the audit
was not completely and/or adequately performed, the auditor refuses to
accept any responsibility by omitting the last sentence of the paragraph.
The scope paragraph is omitted in its entirety since, effectively, no audit
was performed. Similar to the qualified and the adverse opinions, the
auditor must briefly discuss the situations for the disclaimer in an
explanatory paragraph. Finally, the opinion paragraph changes
completely, stating that an opinion could not be formed and is not
expressed because of the situations mentioned in the previous
paragraphs
Internal audit
Internal auditing is an independent, objective assurance and consulting
activity designed to add value and improve an organization's operations.
It helps an organization accomplish its objectives by bringing a
systematic, disciplined approach to evaluate and improve the
effectiveness of risk management, control, and governance processes.
Internal auditing is a catalyst for improving an organizations
effectiveness and efficiency by providing insight and recommendations
based on analyses and assessments of data and business processes. With
commitment to integrity and accountability, internal auditing provides
value to governing bodies and senior management as an objective source
of independent advice. Professionals called internal auditors are
employed by organizations to perform the internal auditing activity.
The scope of internal auditing within an organization is broad and may
involve topics such as the efficacy of operations, the reliability of
financial reporting, deterring and investigating fraud, safeguarding
assets, and compliance with laws and regulations.
Internal auditing frequently involves measuring compliance with the
entity's policies and procedures. However, internal auditors are not
responsible for the execution of company activities; they advise
management and the Board of Directors (or similar oversight body)
regarding how to better execute their responsibilities. As a result of their
broad scope of involvement, internal auditors may have a variety of
higher educational and professional backgrounds.
Publicly-traded corporations typically have an internal auditing
department, led by a Chief Audit Executive ("CAE") who generally
reports to the Audit Committee of the Board of Directors, with
administrative reporting to the Chief Executive Officer.
Nature of the internal audit activity
Based on a risk assessment of the organization, internal auditors,
management and oversight Boards determine where to focus internal
auditing efforts (the focus prioritization is part of the annual/multi-year
audit planning; usually, the audit plan is proposed by the Chief Internal
Audit (sometimes with several options or alternatives) to the approval of
the Audit Committee or Board of Directors). Internal auditing activity is
generally conducted as one or more discrete assignments. A typical
internal audit assignment involves the following steps:
1. Establish and communicate the scope and objectives for the audit
to appropriate management.
2. Develop an understanding of the business area under review. This
includes objectives, measurements, and key transaction types. This
involves review of documents and interviews. Flowcharts and
narratives may be created if necessary.
3. Describe the key risks facing the business activities within the
scope of the audit.
4. Identify control procedures used to ensure each key risk and
transaction type is properly controlled and monitored.
5. Develop and execute a risk-based sampling and testing approach to
determine whether the most important controls are operating as
intended.
6. Report problems identified and negotiate action plans with
management to address the problems.
7. Follow-up on reported findings at appropriate intervals. Internal
audit departments maintain a follow-up database for this purpose.
Audit assignment length varies based on the complexity of the activity
being audited and Internal Audit resources available. Many of the above
steps are iterative and may not all occur in the sequence indicated.
By analyzing and recommending business improvements in critical
areas, auditors help the organization meet its objectives. In addition to
assessing business processes, specialists called Information Technology
(IT) Auditors review information technology controls.

Reporting of critical findings
The Chief Audit Executive (CAE) typically reports the most critical
issues to the Audit Committee quarterly, along with management's
progress towards resolving them. Critical issues typically have a
reasonable likelihood of causing substantial financial or reputational
damage to the company. For particularly complex issues, the responsible
manager may participate in the discussion. Such reporting is critical to
ensure the function is respected, that the proper "tone at the top" exists
in the organization, and to expedite resolution of such issues. It is a
matter of considerable judgment to select appropriate issues for the
Audit Committee's attention and to describe them in the proper context.

Tax Planning
Tax planning is a broad term that is used to describe the processes
utilized by individuals and businesses to pay the taxes due to local, state,
and federal tax agencies. The process includes such elements as
managing tax implications, understanding what type of expenses are tax
deductible under current regulations, and in general planning for taxes in
a manner that ensures the amount of tax due will be paid in a timely
manner.
One of the main focuses of tax planning is to apply current tax laws to
the revenue that is received during a given tax period. The revenue may
come from any revenue producing mechanism that is currently in
operation for the entity concerned. For individuals, this can mean
income sources such as interest accrued on bank accounts, salaries,
wages and tips, bonuses, investment profits, and other sources of income
as currently defined by law. Businesses will consider revenue generated
from sales to customers, stock and bond issues, interest bearing bank
accounts, and any other income source that is currently considered
taxable by the appropriate tax agencies.
In many cases, a primary goal of tax planning is to apply current laws in
a manner that allows the individual or business to reduce the amount of
taxable income for the period. Thus, planning for taxes involves
knowing which types of income currently qualify for as exempt from
taxation. The process also involves understanding what types of
expenses may be legitimately considered as deductions, and what
circumstances have to exist in order for the deduction to be claimed on
the tax return.
There are three common approaches to tax planning for the purpose of
minimizing the tax burden. The first is to reduce the adjusted gross
income for the tax period. This is where understanding current tax laws
as they relate to allowances and exemptions come into play.
A second approach to tax planning is to increase the amount of tax
deductions. Again, this means knowing current laws and applying them
when appropriate to all usual and normal expenses associated with the
household or the business. Since these can change from one annual
period to the next, it is always a good idea to check current regulations.
One final approach that may be applicable to effective tax planning has
to do with the use of tax credits. This can include credits that relate to
retirement savings plans, college expenses, adopting children, and
several other credits. One common example of a tax credit is the Earned
Income Credit, which is intended to relieve the tax burden for persons
who earn less than a certain amount within a given calendar year.

Tax Planning Strategies
Tax planning strategies range from the very simple to the excruciatingly
complex, but they all have one thing in common: they seek to minimize
your overall tax bill. There are dozens of means available to help you
accomplish this goal, from gray areas to loopholes to income shifting to
tax deferral. Most sound strategies use a combination of methods to keep
income taxes to a bare minimum.
There are two major ways to cut down your tax bill: reduce your taxable
income, or reduce your tax rate. You can lower your taxable income by
taking full advantage of allowable deductions, especially those that are
deductible to businesses but not to individual taxpayers (company cars,
for instance). While you can't literally reduce your tax rate, you can do
things that have the same effect, such as shifting income to the entity
that will pay the lowest tax rate, or taking steps to minimize income that
would be subject to self-employment tax in addition to income tax.


Loans and Leases
Some of the neatest tricks for getting money out of your business
without incurring either double taxation or self-employment tax include
loans and leases. While these two items may seem to have nothing in
common, they do share one important factor: you need a legally binding
contract to really make them work and to keep them from being
reclassified by the IRS.
Loans are a great way to get money out of the company, whichever way
the money goes initially. When you want to put money into the company
without changing your equity standing, you can give it a loan and take
back payments. This is especially beneficial with C corporations, where
you can't get equity contributions back without invoking taxable
dividends. If you need a lump sum of cash from the company coffers,
treating it as a loan won't set off any tax liability. The key is to have a
written legal loan agreement in place, and that has to include:


Date of the loan
Original loan amount
Interest
Payment schedule
Yes, your loan has to include interest, at the current going rate. When
you don't charge interest, the IRS will, and in that case you'll have to pay
tax on that interest income even if you never actually got it.
Don't confuse tax avoidance with tax evasion. Tax avoidance involves
using 100 percent legal means to reduce your tax bill, which is
something you have every right to do. Tax evasion, on the other hand,
employs illegal methods to get out of paying taxes.
Leases allow you to rent property to your company. That rental income
will be taxable but won't be subject to double taxation or self-
employment tax. Any form of rent expense is deductible to the company.
However, you cannot use this in connection with a home office.

Get the Family Involved
When it comes to income shifting, paying family members in the lower
tax brackets can be an excellent way to go. Get your kids involved in the
business, and give them paychecks. This gives a beneficial twist to just
doling out allowances: your kids have some job responsibility, and your
company gets an expense deduction.
In order for this plan to work, your kids have to actually work for the
business in an age-appropriate capacity. You can hire your five-year-old
to sweep up, your ten-year-old to do the filing, and your fifteen-year-old
to work the register. Once they're employees, you can even include them
in your company's retirement plan.










Accounting standards

Accounting Standards Specified By The Institute Of Chartered
Accountants of India under Section 211 of The Companies Act, 1956
AS 1 Disclosure of Accounting Principles
AS 2 Valuation of Inventories
AS 3 Cash Flow Statements
AS 4
Contingencies and Events Occurring After the
Balance Sheet Date
AS 5
Net Profit or Loss for the Period, Prior Period
Items and Changes in Accounting Policies
AS 6 Depreciation Accounting
AS 7
(Revised)
Construction Contracts
AS 8 Accounting for Research and Development
AS 9 Revenue Recognition
AS 10 Accounting for Fixed Assets
AS 11
(Revised 2003)
The Effects Of Changes In Foreign Exchange
Rates
AS 12 Accounting for Government Grants
AS 13 Accounting for Investments
AS 14 Accounting for Amalgamations
AS 15
(Revised 2005)
Employee Benefits [click here for related
announcement]
AS 16 Borrowing Costs
AS 17 Segment Reporting
AS 18 Related Party Disclosures
AS 19 Leases
AS 20 Earnings Per Share
AS 21 Consolidated Financial Statements
AS 22 Accounting for taxes on income
AS 23
Accounting for Investments in Associates in
Consolidated Financial Statements
AS 24 Discontinuing Operations
AS 25 Interim Financial Reporting
AS 26 Intangible Assets
AS 27 Financial Reporting of Interests in Joint Ventures
AS 28 Impairment of Assets
AS 29
Provisions, Contingent Liabilities and Contingent
Assets
AS 30
Financial Instruments: Recognition and
Measurement
AS 31 Financial Instruments: Presentation
AS 32 Financial Instruments: Disclosures















Auditing And Assurance Standards

200-299 General Principles And Responsibilities
SA 200 (Revised) issued under the Clarity Project, Overall
Objectives of the Independent Auditor and the Conduct of an
Audit in Accordance with Standards on Auditing
SA 210 (Revised) under the Clarity Project, Agreeing the
Terms of Audit Engagements
SA 220 (Revised)issued under the Clarity Project , Quality
Control for an Audit of Financial Statements
SA 230 (Revised) under the Clarity Project, Audit
Documentation
SA 240 (Revised) under the Clarity Project, The Auditors
Responsibilities Relating to Fraud in an Audit of Financial
Statements
SA 250 (Revised) under the Clarity Project, Consideration
of Laws and Regulations in an Audit of Financial
Statements
SA 260 (Revised) under the Clarity Project, Communication
with Those Charged with Governance
SA 265 issued under the Clarity Project, Communicating
Deficiencies in Internal Control to Those Charged With
Governance and Management
SA 299 (AAS 12), Responsibility of Joint Auditors

300-499 Risk Assessment And Response To Assessed
Risks
SA 300 (Revised) under the Clarity Project, Planning an
Audit of Financial Statements
SA 315 under the Clarity Project, Identifying and Assessing
the Risks of Material Misstatement through Understanding
the Entity and Its Environment
SA 320 (Revised) issued under the Clarity Project,
Materiality in Planning and Performing an Audit
SA 330 under the Clarity Project, The Auditors Responses
to Assessed Risks
SA 402 (Revised) issued under the Clarity Project, Audit
Considerations Relating to an Entity Using a Service
Organisation
SA 450 issued under the Clarity Project, Evaluation of
Misstatements Identified During the Audit

500-599 Audit Evidence
SA 500 (Revised) under the Clarity Project, Audit
Evidence
SA 501 (Revised)issued under the Clarity Project, Audit
EvidenceSpecific Considerations for Selected Items
SA 505 (Revised) issued under the Clarity Project, External
Confirmations
SA 510 (Revised) under the Clarity Project, Initial Audit
Engagements Opening Balances
SA 520 (Revised) issued under the Clarity Project,
Analytical Procedures
SA 530 (Revised) under the Clarity Project, Audit
Sampling
SA 540 (Revised) under the Clarity Project, Auditing
Accounting Estimates, Including Fair Value Accounting
Estimates, and Related Disclosures
SA 550 (Revised) under the Clarity Project, Related Parties
SA 560 (Revised) under the Clarity Project, Subsequent
Events
SA 570 (Revised) under the Clarity Project, Going
Concern
SA 580 under the Clarity Project, Written Representations

600-699 Using Work of Others
SA 600 (AAS 10), Using the Work of Another Auditor
SA 610 (Revised) issued under the Clarity Project, Using
The Work of Internal Auditors
SA 620 (Revised) issued under the Clarity Project, Using
the Work of an Auditors Expert

700-799 Audit Conclusions and Reporting
SA 700 (Revised) issued under the Clarity Project, Forming
an Opinion and Reporting on Financial Statements
SA 705 issued under the Clarity Project, Modifications to
the Opinion in the Independent Auditors Report"
SA 706 issued under the Clarity Project, Emphasis of Matter
Paragraphs and Other Matter Paragraphs in the Independent
Auditors Report"
SA 710 (Revised) issued under the Clarity Project,
Comparative InformationCorresponding Figures and
Comparative Financial Statements
SA 720 under the Clarity Project, The Auditors
Responsibility in Relation to Other Information in
Documents Containing Audited Financial Statements

800-899 Specialized Areas
SA 800 issued under the Clarity Project, Audits of Financial
Statements Prepared in Accordance with Special Purpose
Frameworks
SA 805 issued under the Clarity Project, Special
ConsiderationsAudits of Single Financial Statements and
Specific Elements, Accounts or Items of a Financial
Statement
SA 810 issued under the Clarity Project, Engagements to
Report on Summary Financial Statements

2000-2699 Standards On Review Engagements (Sres)
SRE 2400 (Revised), Engagements to Review Financial
Statements
SRE 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity
Assurance Engagements Other Than Audits or Reviews of
Historical Financial Information
3000-3699 Standards on Assurance Engagements (SAEs)
3000-3399 Applicable to All Assurance Engagements
3400-3699 Subject Specific Standards
SAE 3400 (AAS 35), The Examination of Prospective
Financial Information
SAE 3402, Assurance Reports on Controls At a Service
Organisation







RESEARCH METHODOLOGY
What is Research Methodology?
Research methodology is a way to systematically solve the research
problem. It may be understood as a science of studying how research is
done scientifically. In it we study the various steps that are generally
adopted by a researcher in studying his research problem along with the
logic behind them. It is necessary for the researcher to know not only the
research methods/techniques but also the methodology. Researchers not
only need to know how to develop certain indices or tests, how to
calculate the mean, the mode, the median or the standard deviation or
chi-square, how to apply particular research techniques, but they also
need to know which of these methods or techniques, are relevant and
which are not, and what would they mean and indicate and why.
Researchers also need to understand the assumptions underlying various
techniques and they need to know the criteria by which they can decide
that certain techniques and procedures will be applicable to certain
problems and others will not. All this means that it is necessary for the
researcher to design his methodology for his problem as the same may
differ from problem to problem. For example, an architect, who designs
a building, has to consciously evaluate the basis of his decisions, i.e., he
has to evaluate why and on what basis he selects particular size, number
and location of doors, windows and ventilators, uses particular materials
and not others and the like. Similarly, in research the scientist has to
expose the research decisions to evaluation before they are implemented.
He has to specify very clearly and precisely what decisions he selects
and why he selects them so that they can be evaluated by others also.
The system of collecting data for research projects is known as research
methodology. The data may be collected for either theoretical or
practical research for example management research may be
strategically conceptualized along with operational planning methods
and change management.
Some important factors in research methodology include validity of
research data, Ethics and the reliability of measures most of your work is
finished by the time you finish the analysis of your data.

Formulating of research questions along with sampling weather probable
or non probable is followed by measurement that includes surveys and
scaling. This is followed by research design, which may be either
experimental or quasi-experimental. The last two stages are data analysis
and finally writing the research paper, which is organised carefully into
graphs and tables so that only important relevant data is shown.
Types Of Research Methods
Qualitative
Quantitaive
Mixed
Critical and action oriented
Data Collection
Data collection depends on the research design (quantitative or
qualitative design). Tutors India helps in a survey tool validation and
also online and face to face data collection process. We help you to
conduct surveys [in person Interviews: Formal to informal; structured to
unstructured; focus group discussion, observations, self-administered
questionnaire, diaries, citizen report cards, Delphi techniques, expert
judgement, online surveys, secondary sources such as journals,
newspaper articles, annual reports, government sources such as census,
budgets, policies, procedures, etc.




COLLECTION OF DATA
Primary data can be collected either through experiment or through
survey. If the researcher conducts an experiment, he observes some
quantitative measurements, or the data, with the help of which he
examines the truth contained in his hypothesis. But in the case of a
survey, data can be collected by any one or more of the following ways:
(i) By observation: This method implies the collection of information
by way of investigators own observation, without interviewing the
respondents. The information obtained relates to what is currently
happening and is not complicated by either the past behaviour or future
intentions or attitudes of respondents. This method is no doubt an
expensive method and the information provided by this method is also
very limited. As such this method is not suitable in inquiries where large
samples are concerned.

(ii) Through personal interview: The investigator follows a rigid
procedure and seeks answers to a set of pre-conceived questions through
personal interviews. This method of collecting data is usually carried out
in a structured way where output depends upon the ability of the
interviewer to a large extent.

(iii) Through telephone interviews: This method of collecting
information involves contacting the respondents on telephone itself. This
is not a very widely used method but it plays an important role in
industrial surveys in developed regions, particularly, when the survey
has to be accomplished in a very limited time.

(iv) By mailing of questionnaires: The researcher and the respondents
do come in contact with each other if this method of survey is adopted.
Questionnaires are mailed to the respondents with a request to return
after completing the same. It is the most extensively used method in
various economic and business surveys. Before applying this method,
usually a Pilot Study for testing the questionnaire is conduced which
reveals the weaknesses, if any, of the questionnaire. Questionnaire to be
used must be prepared very carefully so that it may prove to be effective
in collecting the relevant information.

(v) Through schedules: Under this method the enumerators are
appointed and given training. They are provided with schedules
containing relevant questions. These enumerators go to respondents with
these schedules. Data are collected by filling up the schedules by
enumerators on the basis of replies given by respondents. Much depends
upon the capability of enumerators so far as this method is concerned.
Some occasional field checks on the work of the enumerators may
ensure sincere work.

OBJECTIVES OF ACCOUNTING
To keep systematic records:

Accounting is done to keep a systematic record of financial transactions.
In the absence of accounting there would have been terrific burden on
human memory which in most cases would have been impossible to
bear.


To protect business properties:

Accounting provides protection to business properties from unjustified
and unwarranted us. This is possible on account of accounting supplying
the information to the manager or the proprietor.

To ascertain the operational profit or loss:

Accounting helps is ascertaining the net profit earned or loss suffered on
account of carrying the business. This is done by keeping a proper
record of revenues and expenses of a particular period. The profit and
loss account is prepared at the end of a period and if the amount of
revenue for the period is more than the expenditure incurred in earning
that revenue, there is said to be a profit. In case the expenditure exceeds
the revenue, there is said to be a loss.

To ascertain the financial position of business:

The profit and loss account gives the amount of profit or loss made by
the business during a particular period. However, it is not enough. The
businessman must know about his financial position i.e., where he
stands; what he owes and what he owns? This objective is served by the
balance sheet or position statement.

To facilitate rational decision making:

Accounting these days has taken upon itself the task of collection,
analysis and reporting of information at the required points of time to the
required levels of authority in order to facilitate rational decision
making.

LIMITATIONS OF AUDITING
Even though audit program has number of advantages, it is not free from
limitations. Some of the major disadvantages of audit program are as
follows:

1. Audit Program Harasses To Staffs
All the staffs should perform task within the limitation given in audit
program. So, staffs can not use their knowledge and caliber which
harasses to them.

2. Possibility OF Being Unsuitable
Nature and size of business differs. So, the program which is prepared at
the beginning of the year remains unsuitable. Different organizations
may have their own problems. So, similar type of program may not be
applicable to all.

3. Audit Program Increases The Chance Of Fraud
Staffs of the client get information about the audit program in advance
which increases the chance of committing frauds. Similarly, it harasses
the audit staffs so they perform the work of audit carelessly which also
increases the chance of committing frauds.

4. Audit Program Is Unsuitable To Small Concern
Small concern has less transactions and work of audit can be completed
in short period of time. So, audit program is not essential to audit such
concern.


5. Exclusion Of Problems Of New Technology
New techniques and technologies are used in the work of accounting.
Such technology creates the problem in the work of audit but such
problems and remedial measures are not included in the audit program.

LIMITATIONS OF ACCOUNTING
I. Accounting is only one source of information and primarily
provides information based on financial terms: Although this
information is vital, decisions cannot be based solely on a monetary
basis. Various decisions depend upon a diverse range of issues being
considered. A unique combination of Quantitative as well as Qualitative
factors should be considered to ensure an effective decision making
process.

II. The historical perspective of financial accounting: In order to
obtain a recent estimate of an entitys financial performance, the
corporate managers carefully scrutinize financial accounting
information. In retrospect, this information is based on past
performance. The information does provide clarity on the monetary
issues but does not provide a definite insight into the strategic future; as
the future holds various changes in terms of technology, economic
situations as well as political scenarios etc. Such factors in relation to
accounting are unpredictable. Therefore, a careful balance between
historical accounting as well as the future forecasted outlook is required.

III. Historical cost accounting vs. underlying value in use: Some
items loose their monetary value over a period of time, but under the
financial accounting rules need to be included in financial reports.
Though mentioned year after year in the books as monetary figures, the
information may be unreliable due to the historical assumptions made on
the items measurability criterion. For example, a machine in a textile
factory is considered to have a useful life which extends over a period of
ten years in monetary terms; however, after the period of ten years, the
machine may still have the same value as prior years and contribute
significantly to the overall operability of the factory.

IV. Inability to reflect the true value of strategic management:
Various factors such as goodwill and natural circumstances influence the
operations of an enterprise; however, these elements are difficult to
measure thus, leading to their unavoidable exclusion from financial
reports. For example companies depend upon their shareholders, who in
turn depend on the performance of the Chief Executive Officers.
Although the CEOs may have been hired by the company based upon
prior performance, their future performances are not reliably measurable
as they may continually vary. In the initial stages, it may be impossible
to measure whether the CEOs presence will deter or appeal to the
shareholders, which in turn will influence the profitability of the
enterprise.

V. Measuring Volatility of external factors: Financial accounting
information does not take into consideration volatile and ever increasing
changes in the natural and commercial environment. Although scarcely
measurable in monetary terms, their unstable nature may have adverse
effects if included within the financial reports and have a volatile and
cosmetic impact upon the earnings of the firm. For example, tariffs on
trade, duties and other environmental issues can have significant short-
term volatile effects on the organisation.

VI. The effect of non-stable monetary unit: Based from region to
region, accounting information is generated at all enterprises based on
the assumption that the monetary unit is stable over a period of time. In
the real world scenario, the unit fluctuates on a daily basis. Enterprises
usually decide on a flat rate to calculate their financing and investing
needs. However, this can have adverse impacts which cannot be
communicated to shareholders, if the unit has high fluctuations.

DATA ANALYSIS

After the data have been collected, the researcher turns to the task of
analyzing them. The analysis of data requires a number of closely
related operations such as establishment of categories, the application of
these categories to raw data through coding, tabulation and then drawing
statistical inferences. The unwieldy data should necessarily be
condensed into a few manageable groups and tables for further analysis.
Thus, researcher should classify the raw data into some purposeful and
usable categories. Coding operation is usually done at this stage through
which the categories of data are transformed into symbols that may be
tabulated and counted. Editing is the procedure that improves the quality
of the data for coding. With coding the stage is ready for tabulation.

Tabulation is a part of the technical procedure wherein the classified
data are put in the form of tables. The mechanical devices can be made
use of at this juncture. A great deal of data, specially in large inquiries, is
tabulated by computers. Computers not only save time but also make it
possible to study large number of variables affecting a problem
simultaneously.

Analysis work after tabulation is generally based on the computation of
various percentages, coefficients, etc., by applying various well defined
statistical formulae. In the process of analysis, relationships or
differences supporting or conflicting with original or new hypotheses
should be subjected to tests of significance to determine with what
validity data can be said to indicate any conclusion(s).
For instance, if there are two samples of weekly wages, each sample
being drawn from factories in different parts of the same city, giving two
different mean values, then our problem may be whether the two mean
values are significantly different or the difference is just a matter of
chance. Through the use of statistical tests we can establish whether
such a difference is a real one or is the result of random fluctuations. If
the difference happens to be real, the inference will be that the two
samples come from different universes and if the difference is due to
chance, the conclusion would be that the two samples belong to the same
universe. Similarly, the technique of analysis of variance can help us in
analysing whether three or more varieties of seeds grown on certain
fields yield significantly different results or not. In brief, the researcher
can analyse the collected data with the help of various statistical
measures.
A brief snapshot of entire research methodology is as follows:
Research type: Descriptive research

Research design: Qualitative research and Quantitative research

Sample size: 50 Clients

Area of research: Jodhpur

Tools for measurement: Closed end questionnaire

Scope after becoming a Chartered Accountant?
Join a job
Own practice
Family business
Tution services.


Criteria for giving rating to effective accountant?
Good communication skills
Good working skills
Good personality

0
5
10
15
20
25
30
35
40
Join a job Own practice Family business Tution services
0
10
20
30
40
50
Good Communication
skills
Good Working Skills Good personality
48
30
22
Criteria for success of an Chartered Accountant?
Age above 24
Married
Living in the same city for more than five years


Are Chartered Accountants the best in the field of Commerce?
Yes
No


0
10
20
30
40
50
Age above 24 Married Same city for 5+ yrs
41
18
37
Yes , 77
No , 23
Give Rank to different works performed by Chartered Accountants?
Taxation
Accounting
Return filing
Advisory services

Clients who will continue to avail services of the firm
Yes
No
Maybe


Taxation Accounting Return filing Advisory
services
38
31
21
10
Chart Title
Series1 Series2 Series3
0
10
20
30
40
50
60
70
80
90
Yes Mabe No
BIBLIOGRAPHY

Books
1.Study material issued by The Institute Of chatered accountants of
india.
2.Taxman Publications.
3.D.S Rawat Accounting Standards.

Website
www.icai.org.in
www.taxman.com
google search engine (www.google.com)





QUESTIONNAIRE

Name : ..
Designation :
Company :
Q1. Clients who will continue to avail services of the firm
Yes
No
Maybe
Q2. Basic criteria for success of an Chartered Accountant?
Age above 24
Married
Living in the same city for more than five years
Q3. Give Rank to different works performed by Chartered Accountants?
Taxation
Accounting
Return filing
Advisory services
Q4. Scope after becoming a Chartered Accountant?
Join a job
Own practice
Family business
Tution services.

Q5. Criteria for giving rating to effective accountant?
Good communication skills
Good working skills
Good personality
Q6. Are Chartered Accountants the best in the field of Commerce?
Yes
No
Q7. Clients willing to do Chartered Accountancy Course?
Yes
No
Maybe
Q8. Best place to set up Office of a Chartered Accountant?
In the middle of the city
In Noise free places
In the industrial Area
Anywhere
Q9. How Many Chartered Accountants have you approached before us?
None
One to two
More than three