the institute of chartered accountants ... - baroda-icai.org · the institute of chartered...
Post on 19-Jul-2018
234 Views
Preview:
TRANSCRIPT
TheInsightTheInsight
The Institute of Chartered Accountants of India(Setup by an Act of Parliament)
BARODA BRANCH OF
WESTERN INDIA CHARTERED ACCOUNTANTS
STUDENTS ASSOCIATION OF
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(WICASA)
VOL. X NOVEMBER 2012l
“Leveraging Strength, Catalyzing Tomorrow”
e-NewsLettere-NewsLetter
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “You only live once, but if you do it right, once is enough.”
PRINTED AND PUBLISHED BY
Designed at
“ICAI Bhawan”, Kalali-Tandalja Road, Atladra, Vadodara - 390 012.
Telefax : +91 (265) 2680593, 2681115 E-mail: baroda@icai.in Web : www.baroda-icai.org
Multiprints, 30/B, Gandhi Oil Mill Compound,
Near BIDC, Gorwa, Vadodara - 390 016.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
WESTERN INDIA CHARTERED ACCOUNTANTS STUDENTS
ASSOCIATION
BARODA BRANCH OF WICASA
ICAI Bhawan, Post Box No. 7100, Indraprastha Marg,
New Delhi - 110002. Tel. : +91 (11) 39893989
E-mail : president@icai.org Website : www.icai.org
ICAI Bhawan, 27, Cuffe Parade, Post Box No. 6081, Colaba,
Mumbai - 400 005. Tel. : +91 (22) 39893989
Email : wirc@icai.in Website : www.wirc-icai.org
“ICAI Bhawan”, Kalali-Tandalja Road, Atladra, Vadodara - 390 012.
Telefax : +91 (265) 2681115, 2680593
E-mail: wicasa.baroda@gmail.com Web : www.baroda-icai.org
�
�
�
Managing Committee Members
CA. Ashish Parikh Chairman 9825231545
Mr. Sharukh Pathan Vice Chairman 8905094384
Ms. Hiral Jethva Secretary 9714778552
Mr. Mehul Thakkar Treasurer 8905564940
CA. Nayan Kothari Ex-officio 9824433445
Mr. Kanji Hadiya Member 9687969764
Mr. Mohd.Atiq Qureshi Member 9998570095
Mr. Dipesh Thakkar Member 9898940652
CA. Ashish Parikh Editor
Mr. Mohd.Atiq Qureshi Joint Editor
Ms. Hiral Jethva Member
Editorial Board
DISCLAIMER :
WICASA COMMUNITY :
STUDENTS’ STUDY CIRCLE :
BRAIN TRUST SESSION :
SPORTS ACTIVITIES:
WICASA HELPLINE :
The views and opinion expressed or implied in the Newsletter are those of the
authors/contributors and do not necessarily reflect those of ICAI. Unsolicited articles and
transparencies are sent at the owner's risk and the publisher accepts no liability for loss or
damage. Material in this publication may not be reproduced, whether in part or in whole, without
the consent of ICAI.
Students are requested to kindly send article / paper of interest to wicasa.baroda@gmail.com.
The same may be published in the newsletter subject to availability of space & editing.
Be a part of the “WICASA Baroda” now also on FACEBOOK Community. Exchange views and
news. Be updated about forthcoming events of WICASA.
Join now .... where in students can exchange knowledge with the help of group discussion.
Contact Mr.Kanji Hadiya-9687969764
Join now… where a group of students can discuss on predetermine questions and moderator
(from CA fraternity) will elaborate the discussion and conclude. Contact Ms. Hiral Jethva-
9714778552
Join now…where in students can participate in Indoor-Outdoor games for overall development.
Contact Mr. Dipesh Thakkar-9898940652
Students are invited to send their feedback suggestions or grievances to
wicasa.baroda@gmail.com or contact Mr. Sharukh Pathan-8905094384, Mr. Mehul Thakkar-
8905564940
Dear Students,
I hope and wish that all your hard work, patience and
sacrifices must have helped in boosting your performance in
your examinations. But I know that all of you will try to make it
achievable. As a student you have put in all your best efforts
for performing at your best in examination. Now it is time to
go ahead and put your efforts in different perspectives like
apply your all theoretical knowledge in practical issues or
occupy yourself in other activities.
Coming to the Baroda Branch of WICASA-2012 event of
November 2012, it has organized numerous of programs like
Study Circle Meeting, Industrial Visits and Career Counseling
Programs & to aid the students for acquiring utmost benefit
we organized 1 RRC at Caravan Serai Resort, Jambughoda,
Gujarat.
In this month of festivals give us an opportunity to celebrate
and provide us an opportunity to rejoice in community. Our
elders used to say: Joy when shared increases and pain when
shared decreases. Joy and pain are actually relative, and
absence of either of the two will result in a loss of the other.
These require frames of reference to exist. We have already
learnt that we cannot celebrate our joy in isolation, and that
sharing is quite innate to happiness.
Best wishes
st
CA. Ashish Parikh
“Sometimes life knocks you ! Happiness is not the absence of
problems; it's the ability to deal with them.”
May the spirit of our festivals envelop our soul and provide
us strength and courage to do something for the welfare of
our society!
Chairman’sCommunication
2
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “Sometimes the questions are complicated and the answers are simple.”
Forthcoming EventsForthcoming Events
3
Lecture Meeting
Study Circle Meetings
Date & Day :
Time :
Topic :
Speaker :
Venue :
Date & Day :
Time :
Topic :
Speaker :
26-11-2012, Monday
18:30 hrs. to 20:30 hrs.
Cyber Crime
CA. Sanjeev Shah
ICAI Bhawan
27-11-2012, Tuesday
18:30 hrs. to 20:30 hrs.
Reverse Charge Mechanism
Mr. Karan Shah
Venue : ICAI Bhawan
Date & Day :
Time :
Topic :
Speaker :
Venue :
Date & Day :
Time :
Topic :
Speaker :
Venue :
Date & Day :
Time :
Topic :
Speaker :
Venue :
07-11-2012, Wednesday
16:00 hrs. to 18:00 hrs.
"GST" - a precusor
Mr. Milind Joshi
ICAI Bhawan
08-11-2012, Thursday
17:00 hrs. to 18:30 hrs.
TDS - Provision
Mr. Brijesh Pitroda
ICAI Bhawan
10-11-2012, Saturday
18:30 hrs. to 20:30 hrs.
TDS - Case Studies
Ms. Rutvi Solanki
ICAI Bhawan
An Initiative to Save Environment
Day Light Saving Day
Industrial Visit
Childrens Day Celebration
Career Counselling Program
CPT Mock Test
Date & Day :
Time :
Venue :
Date & Day :
Time :
Venue :
Date & Day :
Time :
Venue :
Date & Day :
Time :
Venue :
Date & Day :
Time :
Venue :
Date & Day :
Time :
Fees :
Venue :
02-11-2012, Friday
Full day
ICAI Bhawan
04-11-2012, Sunday
Full day
ICAI Bhawan
07-11-2012, Wednesday
08.00 hrs. to 10.00 hrs.
Goraj Cancer Hospital
14-11-2012, Wednesday
09:30 hrs. to 12:00 hrs.
ICAI Bhawan
21-11-2012, Wednesday
09:30 hrs. to 12:00 hrs.
St. Kabir School
25-11-2012, Sunday
10:00 hrs. to 17:00 hrs.
Rs. 200/-
ICAI Bhawan
Past Events : October 2012Past Events : October 2012DATE NAME OF EVENT ATTEN.
01-10-2012 Full Day Seminar on Accounting (Amalgamation, Absorption & Reconsutruction) by CA Mayur Thakkar 44
02-10-2012 Half Day Seminar on CAPITAL GAIN by CA.Nirav Shah 60
03-10-2012 Half Day Seminar on Financial Management by CA. AMIT SHAH 50
04-10-2012 Half Day Seminar on VAT by CA.Nirav Shah 45
05-10-2012 Half Day Seminar on Income Tax by CA. Nirav shah 58
05-10-2012 Half Day Seminar on Financial Management by CA. AMIT SHAH 45
06-10-2012 Full Day Seminar on Taxation by CA.Nirav Shah 49
07-10-2012 Full Day Seminar on Account by Dr.J.K.Pandya 76
09-10-2012 Half Day Seminar on Income Tax by CA. NIRAV SHAH 46
12-10-2012 Full Day Seminar on Costing by CA Anu Agrawal, Mumbai 46
13-10-2012 Full Day Seminar on Costing by CA Anu Agrawal, Mumbai 47
13-10-2012 Motivation Lecture - How to Face CA Exams by Hemadri Sinha 47
14-10-2012 Half Day Seminar on Costing ( Capital Budgeting) by CA. AMIT SHAH 46
15-10-2012 Mock Test - CA Final (Group I) : Financial Reporting 10
15-10-2012 Mock Test - CA IPCE (Group I) : Accounting 37
15-10-2012 Mock Test - CA PCC (Group I) : Advanced Accounting 5
16-10-2012 Mock Test - CA Final (Group I) : Strategic Financial Management 10
16-10-2012 Mock Test - CA IPCE/PCC (Group I) : Business Laws, Ethics & Communication 37
17-10-2012 Mock Test - CA Final (Group I) : Advanced Auditing and Professional Ethics 10
17-10-2012 Mock Test - CA IPCE/PCC (Group I) : Costing and Financial Managaement 37
18-10-2012 Mock Test - CA Final (Group I) : Corporate and Allied Laws 10
18-10-2012 Mock Test - CA IPCE (Group I) : Taxation 37
18-10-2012 Half Day Seminar on Computer Network & Network security Mr. Manish Shukla 70
19-10-2012 Half Day Seminar on Flow Chart, Decision Table & Internet and other technologies Mr. Manish Shukla 56
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “Always do your best, success follow’s actions.”4
The term, Forensic Accounting was coined by Maurice Paulobet
in 1946. Worldwide, Sherlock Holmes is considered to be the
first forensic accountant. However, in India, Kautilya was the
first person to mention the famous forty ways of embezzlement
in his book Arthashastra during the ancient times. He was the
first economist, who openly recognized the need of the forensic
accountants. Similarly, Birbal was the Scholar in the time of King
Akbar. He used various tricks to investigate various crimes. Some
of his stories give the fraud examiner a brief idea about the
Litmus test of investigation.
The modern digital and complex environment offers new
opportunities for both perpetrators and investigators of fraud
i.e. Satyam scam, CWG and 2G. In many ways, it has reformed
the way fraud examiners conduct investigations, the methods
forensic accountant use to plan and complete work, and the
approaches take to assess risk and perform task. Forensic
Accounting is essentially required in wake of growing frauds e.g.
Rapid use of complex information technology
environment
Growing Cyber crime
Increase in number of Corporate Scams.
Failure of regulators to track the securities scams
H e l p i n g t o
Government in
a c h i e v i n g
c o m p l i a n c e
with var ious
f o r m &
regulation.
It's
a good quote that
every auditor should
know. This quote
makes the definition of Forensic accountants even simpler. The
forensic Accountant is a bloodhound of Bookkeeping. These
bloodhounds sniff out fraud and criminal transactions in bank,
corporate entity or from any other organization's financial
�
�
�
�
�
"Auditor should be
watchdog and not be
the bloodhound".
Need of Forensic Accounting
Forensic Accountants
DATE NAME OF EVENT ATTEN.
20-10-2012 Half Day Seminar on Accounting Standard by CA Mayur Thakkar 44
22-10-2012 Mock Test - CA Final (Group II) : Advanced Management Accounting 5
22-10-2012 Mock Test - CA IPCE (Group II) : Advance Accounting 20
22-10-2012 Mock Test - CA PCC (Group II) : Taxation 5
23-10-2012 Mock Test - CA Final (Group II) : Information Systems Control and Audit 5
23-10-2012 Mock Test - CA IPCE/PCC (Group II) : Auditing and Assurance 20
24-10-2012 Mock Test - CA Final (Group II) : Direct Tax Laws 5
24-10-2012 Mock Test - CA IPCE/PCC (Group II) : Information Technology and Strategic Management 20
25-10-2012 Mock Test - CA Final (Group II) : Indirect Tax Laws 5
29-10-2012 Study Circle Meeting on "Limited Liability Partnership" by Vahid Langawala 11
31-10-2012 Visit to Trade Fair at Sir Sayajirao Nagar gruh 6
Forensic AccountingContributed by : (CA Final Student)Prateek Patel
Forensic – ‘belonging to, used in or suitable to courts of
judicature or to public discussion or debate’.
Forensic accounting intends to “investigate” the possibilities of
criminal intent in the conduct of the transaction. Forensic
accounting is the specialty practice area of accounting that
defines activities, which result from real or anticipated
litigation. Broadly speaking, these engagements fall into one of
three categories:
economic damages,
assurance as to fraud in accounts or inventories, or
the presentation thereof, and business valuation.
However forensic accounting is a gross area of tasks of which
fraud examination is a small part.
Emphasis of Forensic Accounting is on scrutinizing and
interpreting white collar crimes such as securities fraud and
embezzlement, bankruptcies and contract disputes, and other
complex and possibly criminal financial transactions, such as
money laundering by organized criminals. Forensic accountants
combine their knowledge of accounting, industry practice, and
finance with law and investigative techniques in order to
determine if illegal activity is going on. It can be identified as
integrity of accounting, auditing and investigative skills to
secure a particular result. It is use of intelligence gathering
techniques and accounting and business skills to develop
information.
�
�
�
According to AICPA, “Forensic Accounting is the application of
accounting principles, theories and discipline to facts or
hypothesis at issues in a legal dispute and encompasses every
branch of accounting knowledge.”
“Thinking beyond the numbers and Thinking out of Box.”
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “The Ultimate Thinking Tool That Will Change Your Life”5
records. They hound for the conclusive evidences.
Forensic Accountant has to become thief-in-virtual-sense. A
capable Forensic Accountant should have the following
characteristics:
curiosity;
persistence;
creativity;
discretion;
organization;
confidence;
sound professional judgment;
Interpersonal and communication skills, which aid in
disseminating information about the company’s ethical
policies.
Knowledge and Experience in:
Financial Statements & Audit
Internal Controls and Operational Processes
Fraud Schemes
Investigation and Legal Elements of Fraud
Psychology of the White Collar Criminal
A Forensic Accountant must be open to consider all alternatives,
scrutinize the fine details and at the same time see the big
picture. In addition, a Forensic Accountant must be able to listen
effectively and communicate clearly and concisely. Forensic
accountants, in fact, utilize an understanding of business
information and financial reporting systems, accounting and
auditing standards and procedures, evidence gathering and
investigative techniques, and litigation processes and
procedure to perform their work. Forensic accountants are also
increasingly playing more ‘proactive’ risk reduction roles by
designing and performing extended procedures as part of the
statutory audit, acting as advisors to audit committees, and
assisting in investment analyst research.
The involvement of the forensic accountant is almost always
reactive – they primarily respond to complaints arising in
criminal matters, statements of claim arising in civil litigation
and rumors and enquiries arising in corporate investigations.
Forensic Accountants become involved in a wide range of
investigations, spanning many different industries. The practical
and in-depth analysis that a Forensic Accountant will bring to a
case helps uncover trends that bring to light the relevant issues.
Forensic accountants are trained to look beyond numbers and
deal with the business like situation. Forensic accountants are
also increasingly playing more 'proactive' risk reduction roles by
designing and performing extended procedures as part of the
statutory audit, acting as advisors to audit committees, and
assisting in investment analyst research.
Investigating and analyzing financial evidence;
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Assignments which Forensic Accountant can perform?
A Forensic Accountant is often involved in the following:
�
�
�
Developing computerized applications to assist in the
analysis and presentation of financial evidence;
Communicating their findings in the form of reports,
exhibits and collections of documents; and
Assisting in legal proceedings, including testifying in court
as an expert witness and preparing visual aids to support
trial evidence.
Detailed below are various areas in which a Forensic Accountant
will often become involved;
Professional slackness: Forensic accountants also take up cases
relating to professional negligence. Whenever there is a breach
of generally accepted accounting standards (GAAS) or ethical
codes of any profession, forensic accountants are required to
quantify the loss resulting from such professional negligence or
deficiency in service.
Detection of fraud: This often involves procedures to determine
the existence, nature and extent of fraud or embezzlement and
may concern the identification of a perpetrator. These
investigations often entail interviews of personnel who had
access to the funds and a detailed review of the documentary
evidence.
Criminal investigation: Where the matter under investigation
involves financial implications, the investigation department,
law society, and etc. avail of the services of a forensic
accountant. The report of an accountant is very much useful in
preparing and presenting evidence.
Personal Injury Claims / Motor Vehicle Accidents: A Forensic
Accountant is often asked to quantify the economic losses
resulting from a motor vehicle accident. A Forensic Accountant
needs to be familiar with the legislation in place, which pertains
to motor vehicle accidents. Cases of medical malpractice and
wrongful dismissal often involve similar issues in calculating the
resulting economic damages.
Business economic losses: Assignments involving business
economic losses include; contract disputes, construction claims,
product liability claims, trademark and patent infringements
and losses stemming from a breach of a non-competition
agreement.
Review of the factual situation and provision of
suggestions regarding possible courses of action.
Assistance with the protection and recovery of assets.
Co-ordination of other experts, including:
Private investigators;
Forensic document examiners;
Consulting engineers.
Assistance with the recovery of assets by way of civil action
or criminal prosecution.
Assistance in obtaining documentation necessary to
�
�
�
�
�
�
�
�
Investigative Accounting:
Litigation Support:
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “Never Give Up: Relentless Determination to Overcome Life's Challenges”6
support or refute a claim.
Review of the relevant documentation to form an initial
assessment of the case and identify areas of loss.
Assistance with Examination for Discovery including the
formulation of questions to be asked regarding the
financial evidence.
Attendance at the Examination for Discovery to review the
testimony; assist with understanding the financial issues
and to formulate additional questions to be asked.
Review of the opposing expert's damages report and
reporting on both the strengths and weaknesses of the
positions taken.
Assistance with settlement discussions and negotiations.
Attendance at trial to hear the testimony of the opposing
expert and to provide assistance with cross-examination.
Business Valuation Services: Forensic accountants are often
hired to perform valuation services for clients. The AICPA
defines business valuation services as follows:
“Business valuations generally arise in the context of one or
more of the following three categories: (1) transactions; (2)
litigation; and (3) taxes (or estate planning). Transaction
appraisals include acquisitions, mergers, leveraged buy-outs,
initial public offerings, ESOPs, buy-sell agreements, and many
other engagements.
Valuations may arise in a litigation context in connection with
marital dissolution, bankruptcy, breach of contract, dissenting
shareholder and minority oppression cases, economic damages
computations, and other cases. Valuations may also be
conducted for tax reasons, including gift and estate taxes, estate
planning, family limited partnerships, ad valorem taxation, and
other tax-related reasons. The Business Valuation resource
section presents guidance on performing valuations of closely-
held businesses and intangible assets, including an overview of
the valuation process, the factors to consider before accepting
the valuation engagement, and the various methods of
valuation. Additionally, it includes tools and aids that would
facilitate the business valuation process.”
Benford’s Law works because nature produces more small
things than large things. There are more insects than large
mammals, more small houses than large ones, and more
small lakes than large bodies of water. Similarly,
businesses produce more transactions with small
amounts than with large amounts. It is a mathematical
tool used in determining whether a variable under study is
a case of mistake or fraud. Once the variable is decided,
the left most digit of the variable is extracted and
summarized for entire population. The summarization is
done by classifying the first digit field and calculating its
observed count percentage. Then Benford’s set is applied.
�
�
�
�
�
�
Techniques used by Forensic Accountants
� Digital Analysis / Benford’s Law;
�
�
�
�
�
Trending;
Outlier Detection;
Data Mining
Analytical Tools
External Research
In addition to comparing same period numbers from
different vendors, employees, or customers, fraud can be
discovered by comparing numbers over time. Because
almost all perpetrators are greedy, fraud increases
exponentially over time. Forensic accountant can easily
spot an increasing trend on a line chart.
One of the primary methods of detecting fraud is
discovering data values that are outside the normal course
of business. For example, a kickback scheme might be the
reason purchases from one vendor are twice as high as
similar purchases from another vendor.
Forensic accountants find patterns through database
searches and statistical algorithms. Benford's Law, for
example, reveals false invoices by identifying activities
such as recurring fixed expenses. The law states that
"certain digits appear more frequently than others in data
sets." flag discrepancies in key performance ratios such as
debt to equity. Outer detection, which highlights amounts
that appear to be abnormally high, shows unusual
spending habits and possible kickbacks. Also used in credit
card fraud investigations, the Luhn algorithms, validates
account numbers.
Forensic accountants use trending to study financial
figures over a period of time. They conduct ratio analyses
of indicators, such as inventory turnover and working
capital to identify fraudulent financial statements.
The advent of the Internet has enabled forensic
accountants to quickly compile information on individuals
and companies. Software packages that bypass passwords
to access suspect computer hard drives and programs that
detect embedded information enhance their investigative
ability.
Finally, forensic accounting is a relatively ingenious field. As the
services of forensic accountants are not used or essential within
the everyday activity of an individual it’s not at all unusual fairly
little is known about the occupation. Upon investigation
forensic accounting is in fact broad in scope and covers many
different roles. What is interesting to note is the fact that despite
the difference between general accounting and forensic
accounting, the services connected with each are frequently
provided by exactly the same company. In other words it will
often be the case a chartered accountant can cater for not only
your general accounting needs but also your forensic
accounting requirements, in the event you so need them.
Conclusion
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “Don't cry because it's over, smile because it happened.”7
Non-XBRL Filing
XBRL Filing
The Ministry issued General Circular No.30/2012 Dated
28.09.2012, In order to ensure smooth filing and to avoid last
minute rush, the due date of filing of e-forms 23AC(Non-XBRL)
and 23ACA (Non XBRL) as per new schedule VI is extended in
following manner without any additional fee :-
Company holding AGM or whose due date for holding AGM is on
or before 20.09.2012, the time limit will be 03.11.2012 or due
date of filing, whichever is later.
Company holding AGM or whose due date for holding AGM is on
or after 21.09.2012, the time limit will be 22.11.2012 or due date
of filing, whichever is later.
As per General Circular No. 16/2012 issued by the Ministry of
Corporate Affairs on 6 July 2012, all companies referred in para
2 of the said circular will be allowed to file their financial
statements in XBRL mode without any additional fee/ penalty up
to15 November, 2012 or within 30 days from the date of their
AGM, whichever is later.
XBRL filing for the financial year 2011-12 is not enabled by MCA
as yet since the validation tool is still under finalization. Recently,
MCA has come out with the beta version of the validation tool
which is likely to be made effective from 14 October 2012.
MCA XBRL Validation Tool ensures that only those XBRL
documents; that satisfy the requirements of Taxonomy and
Business Rules, are filed with MCA under section 220 of the
Companies Act, 1956. MCA Validation Tool is an important mean
for improving the quality of financial information/disclosures in
XBRL. Successful validation of the instance document is a pre-
requisite before filing the balance sheet and profit & loss account
on MCA portal.
It may, however, be noted that mere successful validation of an
XBRL document by the MCA Validation Tool does not mean that
the provisions under section 211 of the Companies Act, 1956
have fully been complied with. It is important to ensure that this
‘validated’ XBRL document also provides a true and fair view of
the state of affairs of the company as per financial statements
adopted in the AGM. MCA XBRL Validation Tool also provides the
‘human-readable’ pdf version of the XBRL document for ease in
th
th
th
XBRL Filing of Financial StatementsContributed by : (CA Final Student)Ms. Rutvi Solanki
XBRL is the acronym for Extensible Business Reporting Language.
As the name itself suggests, it is a language for presentation of
data which permits easy analysis and interpretation thereby
reducing cost, time and effort. It promotes paperless reporting
and thus is in line with the green initiatives being promoted
world over.
XBRL is only a method of presentation or reporting. It does not
attempt to make any changes in the content to be reported. The
idea behind XBRL is simple. Instead of treating financial
information as a block of text - as in a standard internet page or a
printed document - it provides an identifying label (tag) for each
individual line item of data. This data then becomes computer
readable.
Ministry of Corporate Affairs introduced the concept of XBRL
filing of financial statements to ROC by mandating certain class
of companies to file balance sheets and profit and loss account
for the year 2010-11 onwards by using XBRL taxonomy. On 05th
October 2011, Companies (Filing of documents and forms in
Extensible Business Reporting Language) Rules, 2011 were
notified.
UNDERSTANDING XBRL THROUGH THE CONCEPT OF 5 W’S
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “There is no failure except in no longer trying.”8
authentication and certification of the XBRL document being
filed by the company to MCA.
Ministry of Corporate Affairs have come out with a number of
circulars and notifications in the recent times relating to
maintenance of Cost Accounting Records and Cost Audit. These
circulars and notifications have not only brought remarkable
changes in the applicability of cost accounting and audit rules
but have introduced a number of new requirements like
obtaining of Cost Compliance Report, filing of reports in XBRL
mode, fees for appointment of cost auditor etc.
These announcements and changes have created a lot of
perplexity in the minds of the readers regarding the applicability
of the revised rules. Moreover, since the onus of compliance has
been shifted from the legislator to the company, it becomes even
more vital to understand the changes and their implications.
For ease of understanding, we have divided this section into 2
parts –
1. Maintenance of Cost Accounting Records and Filing of Cost
Compliance Report
2. Appointment of Cost Auditor and filing of Cost Audit
Report
The Companies (Cost Accounting Records) Rules, 2011
were notified on 3 June 2011 vide notification no. G.S.R.
429(E), issued by the Ministry of Corporate Affairs in
exercise of the powers conferred by section 642(1)(b) read
with section 209(1)(d) of the Companies Act, 1956. These
rules are in supersession of all Cost Accounting Record
Rules issued so far.
These rules shall apply to every company, including a
foreign company as defined under section 591 of the Act
which is engaged in the production, processing,
manufacturing, or mining activities and which satisfies any
one of the following criteria
• A company which is a body corporate governed by any
special Act
• Activities or products covered in any of the following
Industry Specific rules:
(a) Cost Accounting Records (Bulk Drugs) Rules, 1974
(b) Cost Accounting Records (Formulations) Rules, 1988
rd
These rules shall not apply to the following class of companies :
XBRL FILING OF COST AUDIT AND COMPLIANCE REPORT
Maintenance of Cost Accounting Records and Filing of Cost
Compliance Report
�
�
Notification
Applicability
(c) Cost Accounting Records (Fertilizers) Rules, 1993
(d) Cost Accounting Records (Sugar) Rules, 1997
(e) Cost Accounting Records (Industrial Alcohol) Rules, 1997
(f) Cost Accounting Records (Electricity Industry) Rules, 2001
(g) Cost Accounting Records (Petroleum Industry) Rules, 2002
(h) Cost Accounting Records (Telecommunications) Rules,
2002
• Whole sale of retail trading activities.
• Banking, financial, leasing, investment, Insurance,
education, healthcare, tourism, travel, hospitality,
recreation, transport services, business/professional
consultancy, IT & IT enabled services, research &
development, postal/courier services, etc. unless any of
these have been specifically covered under any other Cost
Accounting Records Rules.
• Companies engaged in rendering job work operations or
contracting/sub-contracting activities, and are paid only
the job work or conversion charges, such as tailoring,
baking, repairing, painting, printing, constructing,
servicing, etc.
• Companies engaged in the production, processing,
manufacturing or mining activities till such time they
commence their commercial operations.
• Ancillary products/activities of companies incidental to
their main operations (i.e. products/activities that do not
constitute their main line of business) and wherein the
total turnover from the sale of each such ancillary
products/activities do not exceed 2% of the total turnover
of the company or Rs.20 crores, whichever is lower.
� Maintenance of Records
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “Lack of time is actually lack of priorities.”9
�
�
�
�
Filing of Compliance Report
Due date for filing under XBRL mode
Format of Compliance Report and Form for filing
Procedure for Appointment of Cost Auditor
As per General Circular No. 8/2012 dated 10.05.2012, MCA
had notified that XBRL filing for Cost Compliance Report
will be enabled after 30.06.2012 which was modified to
31.07.2012 vide Circular dated 29.06.2012.
Thereafter vide General Circular No. 18/2012 dated
26.07.2012, MCA has further extended the due date to
31.12.2012.
As per the XBRL website maintained by MCA, the Validation
Tool for XBRL filing of Compliance Report to MCA is
presently under development. Filing can be enabled only
after the validation tool is ready.
APPOINTMENT OF COST AUDITOR AND FILING OF COST
AUDIT REPORT
� The Companies (Cost Audit Report) Rules, 2011
Notification
Applicability
Products/Activities to which cost audit is applicable
for FY 10-11(F.NO. 52/26/CAB-2010 dated 30.06.2011)
Sr. Name of Industry Relevant Chapter
Heading of the
Central Excise Tariff
Act, 1985
The Companies (Cost Audit Report) Rules, 2011 were
notified on 03rd June 2011 vide notification no. G.S.R.
430(E), issued by the Ministry of Corporate Affairs in
exercise of the powers conferred by section 642(1)(b) read
with section 233B(4) and Section 227(1) of the Companies
Act, 1956. These rules are in supersession of the Cost Audit
Report Rules, 2001.
These rules shall apply to every company in respect of
which an audit of the cost records has been ordered
by the Central Government under sub-section (1) of
section 233B of the Act.
Vide order reference number F.NO. 52/26/CAB-2010
dated 30.06.2011 (for FY 10-11) and F.NO.
52/26/CAB-2010 dated 24.01.2012 (for FY 11-12)
Central Government has ordered Cost Audit for
following class of companies –
• All Companies to which The Companies (Cost
Accounting Records) Rules, 2011 apply, AND
• Which are engaged in production, processing,
manufacturing or mining of products/activities given
in table below, AND
• Wherein the aggregate value of the turnover made by
the company from sale or supply of all products or
activities during the immediately preceding financial
year exceeds rupees 100 crores, OR
• Wherein the company’s equity or debt securities are
listed or are in the process of listing on any stock
exchange, whether in India or outside India.
Products/Activities include intermediate or allied products
and articles. Clarification regarding meaning of
intermediate/allied products and their examples is given in
General Circular No. 67/2011 dated 30.11.2011.
1. Cement Chapter 25, 38 and 68
2. Tyres & Tubes Chapter 40
3. Steel Chapter 72 and 73
4. Paper Chapter 47 and 48
5. Insecticides Chapter 30
6. Glass Chapter 70
7. Paints & Varnishes Chapter 32
8. Aluminum Chapter 76
�
�
�
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “Life isn’t about finding yourself. Life is about creating your-self.”10
Products/Activities to which cost audit is applicable for FY 11-12
F.NO. 52/26/CAB-2010 dated 24.01.2012
1. Jute, cotton, silk, Chapters 50 to 63
woolen or blended fibers/
textiles
2. Edible oil Chapters 12 and 15
seeds and Oils (incl.vanaspati)
3. Packaged food products Chapters 2 to 25 (except
Chapters 5,6,14, 23 & 24)
4. Organic & Inorganic Chemicals Chapters 28,29,32,38& 39
5. Coal & Lignite Chapter 27
6. Mining & Metallurgy Chapters 26 and 74 to 83
of ferrous & (except Chapters 76 and
non‐ferrous metals 77)
7. Tractors & other motor Chapters 84, 85 and 87
vehicles (incl. automotive
components)
8. Plantation Products Chapters 8, 9, 21 and 40,
9. Engineering machinery Chapters 84 and 85
(incl. electrical
& electronic products)
These rules shall not apply to the following class of companies –
• Generation of electricity for captive consumption
• Own manufactured products that are consumed
exclusively by the company for the sole purpose of
production, processing, manufacturing, or mining of its
other product or activities that are subject to cost audit.
• All units located in SEZs, EPZs, FTZs & 100% EOUs (refer
general Circular No. 11/2012 dated 25.05.2012 for more
details)
Ministry of Corporate Affairs has mandated filing of the
Cost Audit Report and Compliance Report from the
financial year 2011-12 onwards (including overdue reports
relating to any previous year) by using the XBRL taxonomy
Sr. Name of Industry Relevant Chapter
Heading of the Central
Excise Tariff Act, 1985
�
�
Cost Audit Report
Filing of Cost Audit Report in XBRL
vide General Circular No. 8/2012 dated 10.5.2012 [as
amended on 29.6.2012] and No. 18/2012 dated 26.7.2012.
All such companies that are NOT covered under the
company specific Cost Audit Orders issued prior to
31.3.2011 and/or under the industry specific Cost Audit
Order No. 52/26/CAB-2010 dated 2 May 2011, 30 June
2011 and 24 January 2012 are not required to file Cost
Audit Report. However, companies meeting with the
threshold limits as prescribed in the relevant Cost
Accounting Records Rules 2011 are required to file
Compliance Report in the XBRL format.
Due date for filing Cost Audit and Compliance Report,
without additional fees has been notified as 31.12.2012 as
per General Circular No. 18/2012 dated 26.07.2012.
The Validation Tool for XBRL filings of Cost Audit &
Compliance Report to MCA is presently under
development.
nd th
th
How to submit RectificationContributed by : (CA Final Student)Tarun Rana
Make sure you have received an intimation under
section 143 (1) from CPC Bangalore for the E-returns
filed by you for AY 2009-10 or later.
Carefully examine the intimation to see if the
computation by CPC is correct even if different from
what was expected by you. It may be that you may
have computed tax liability or interest incorrectly. Take
the help by using departmental excel utility available in
e-filing website.
Since the Rectification Request is to be submitted by
uploading the complete xml file similar to uploading
the original return, it may be preferable to start with
the saved e-return data that was prepared by the
return preparation utility/software (Department
provided excel software or other software), in case it is
available with the taxpayer.
Carefully review the Common Error guide and the table
above to understand as the basic reason for the
variation.
All errors in data entry should be completely corrected
and schedules or fields left blank should be filled
accurately as explained in the guide. The complete
return should be filled including TDS and Tax payment
schedules and not only schedules that need change or
the fields that need correction. This is because the
entire return with corrected data would be re-
processed under rectification. However, there should
not be any revision in income figures or new claims
since then the rectification request would be rejected
or rectification would be delayed. It may be clearly
Step 1:
Step 2:
Step 3:
Step 4:
Step 5:
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “I know nothing except the fact of my ignorance.”11
noted that this facility is only
for correct ing mistakes
apparent from record. Fill the
utility as if you are preparing a
new ITR.
After the Return data is
corrected then the xml can be
ge n e rate d . T h i s i s t h e
Rectification XML file.
Log in to
https://incometaxindiaefiling.
gov.in and go to My Account-
> Rectification-> Rectification
upload .
Fi l l in detai ls from the
intimation sheet which will be
verified to ascertain that only
the taxpayer in possession of
the Intimation from CPC would
b e a b l e t o s u b m i t a
rectification request.
Fill in details of Schedules
where changes have been
made and reasons for seeking
rectification. Fill in due date
for filing return, if incorrect as
per intimation sheet. Leave
blank if not applicable. Fill in
details which are not available
in the return form such as
details of 80G donations (not
available in ITR forms for 1, 2
and 3) and Quarter-wise
details of Capital Gains (all four
types- which is not available in
ITRs 2, 3, 4, 5 and 6) only if
applicable. Leave blank if not
applicable. Please note if your
address has been changed in
the rectification XML file, you
should check the address
changed checkbox to ensure
that the new address is
updated else the address as
per old e-return only will be
used.
Now upload the Rectification
XML file. Validations will be
done to ascertain that only
mistakes apparent from
record are sought to be
rectified.
Upon successful upload,
Rectification Request number
and acknowledgement will be
displayed.
Step 6:
Step 7:
Step 8:
Step 9:
Step 10:
Step 11:
on 24 & 25 of November 2012, Saturday - Sunday
Organised by
th th
WICASA Baroda 2012
FIRST STUDENT’SResidential Refresher Course (RRC)
at
Jambughoda, Gujarat.CARAVAN SERAI RESORT,
For registrations and further details, ContactICAI Bhawan, Atladra, Baroda.
Contact : 0265 2681115 / 2680593
DAY ONE – 24 November 2012
DAY TWO – 25 November 2012
th
th
Timing Activity
Timing Activity
09:00 to 10:00 hrs. - Breakfast
10:00 to 13:00 hrs. Technical Session – Discussion on Case Studies of Direct Taxes
13:00 to 14:00 hrs. Lunch
14:00 to 16:30 hrs. Group Discussion on a Technical Topic – Direct Taxes
16:30 to 18:30 hrs. Bush Trekking in Jungle /Flying Fox / Swimming / Cricket Match
/ Cycling Badminton
19:00 to 22:00 hrs. Pool side DJ Party
22:00 to 23:30 hrs. Camp Fire with Dinner
08:00 to 09:30 hrs. Swimming + Breakfast
09:30 to 11:00 hrs. Technical Session – Issues in Accounting Standards (AS 2, 9,
11, 17, 18 & 22)
11:00 to 12:30 hrs. Motivational Lecture
12:30 to 13:30 hrs. Lunch
13:30 to 17:30 Visit to Pavagadh & Champaner (Heritage Sites)
• Baroda Branch of WICASA 2012 is organising students Residential Refresher Course (RRC)
for the first time in history of Baroda, ICAI.
• Fees of Rs. 1000 /- per student is inclusive of Travelling, Accommodation, Food and all
other facilities.
-
-
-
-
-
-
-
-
-
-
-
e-NewsLetter“Leveraging Strength, Catalyzing Tomorrow”
Baroda Branch of WICASA
of The Institute of
Chartered Accountants of India
VOL. X NOV. 2012l “Glory is fleeting, but obscurity is forever."12
PHOTOFLASHPHOTOFLASH
CA Mayur Thakkar at Full Day Seminar on Accounting -
Amalgamation (01.10.2012)
CA Amit Shah at Half Day Seminar on
Financial Management (05.10.2012)
CA Nirav Shah at Full Day Seminar
on Taxation (06.10.2012)
Dr.J.K.Pandya at Full Day Seminar on
Accounts (07.10.2012)
Mr. Manish Shukla at Half Day Seminar
on Information Technology (18.10.2012)Visit to Trade Fair (31.10.2012)
CA Anu Agrawal at Full Day Seminar on Costing (12.10.2012) Mock Test - CA Final Students
Mock Test - CA IPCE & PCC Students Study Circle Meeting by Mr. Vahid Langawala on LLP (29.10.2012)
top related