Qualification in Auditors report

[ACS Poonam Jain]

Dear All,

 

The auditor of the company has given a qualification in the audit report that

 

"the company had provided depreciation in respect of fixed assets at the rates prescribed under Income tax act which are at variance with the rates prescribed under Companies act. however this does not affect the accounting results or valuation of assets in Balane sheets in a amwterial manner, since the company has been following this practise since its inception which are at variance with the rates presribed under comapnies act, 1956."

 

 

How to write its reply please help

 

Thanks & Regards

Poonam.

[kiran mukadam]

Hi,

U can write 

" The auditors view are self explanatory. The Board of Director shall take necessary steps towards depreciation calculation as per companies act in the following financial year."

During the current financial year, u can calculate dep. as per companies act. and pass the entry for difference between income tax and company act

Poonam.

--
Find eNewsletters of ICSI Mysore at: http://www.icsi.edu/NewsEvents/enewsletters/tabid/1757/Default.aspx AND www.esnips.com/web/icsimysore
 
You received this message as you are subscriber. To unsubscribe email to: csmysore-u...@googlegroups.com

--

CS Kiran Mukadam

Mob:-9420153962

 The ultimate test of mans conscience may be his willingness to sacrifice something today for future generations whose words of thanks will not be heard  

[ACS Poonam Jain]

Thanks Kiran...

Regards

Poonam.

[Madhur Agrawal]

Dear Poonam,
What auditor has stated is just a 'Disclosure' and not 'Qualification, Reservation or Adverse', so Directors need not to comment on the same.

Regards,
Madhur N. Agrawal

[BINDU MADHAVA]

In notes to accounts, you should mention the details about deviation with regard to depreciation.

In directors report, either you can reproduce the notes in this regard or you can mention the word "Auditors remarks, if any suitably explained in notes to accounts under note no.---"

[Astik Tripathi]

Hi Poonam,

You should include in notes to the account :"Board of Directors will take care of the same from coming financial year and as for as previous year is concered there is no any difference in valuation of Depreciation."

CS. ASTIK MANI TRIPATHI

[Madhur Agrawal]

Dear learned members,
I dont understand why you all apprising to provide comment on auditor's disclosure in the directors report/notes to accounts.

What auditor has stated is just a disclosure, there is no qualification or reservation with respect to depreciation. The depreciation rates under the Schedule XIV are minimum rates and company may charge higher rates, so the directors need not to give comment on such disclosure, not even like "Board of Directors will take care of the same from coming financial year and as for as previous year is concered there is no any difference in valuation of Depreciation."

Regards,
Madhur N. Agrawal

[Astik Tripathi]

Hi Sir, 

Thanks for value addition, as per my understanding we should reply on each qualification given by the auditor.

Further if there is any disclosure from auditor then we do'nt need to reply on the same.

 

Thanks & regards,

Astik Mani Tripathi

Astik Tripathi & Associates,

Company Secretaries,

C/o The Legist,

E-1, LGF, Lajpat Nagar- III

New Delhi- 110024

9811925514

[Nithyakalyani Kannan]

Yes, I agree to Mr. Madhur's views. The comment given by the auditor is not a qualification at all. The auditor has also stated that the Company is following the practice since inception and so it shall not be good to say that the company will follow it in the forthcoming financial year. Even in the next financial year, the auditor may give the same comment. It is better not to give any explanation. 

 

Thanks & regards,
CS Nithyakalyani M

---

From: Madhur Agrawal <madh...@gmail.com>
To: csmy...@googlegroups.com
Sent: Tuesday, 15 November 2011 10:31 PM
Subject: Re: [CSMysore] Qualification in Auditors report

[BINDU MADHAVA]

The responsibility lies with the company to disclose the deviated rates under notes to accounts as per note 5 to Schedule XIV

[ACS Poonam Jain]

thanks all for your valuable comments....now what  i understand is that since in the notes of accounts nothing is mentioned and the auditor has also not pointed out the same in the notes of accounts so I can leave that point considering it as "Disclosure"....

 

regards,

Poonam Jain