Communication under Clause 8, Part I of First Schedule of CA Act

Illustrative Communication Letter under Clause 8, Part I of First Schedule

To,

Mr. A

M/s XYZ & Associates,

Delhi.

Sub.: Statutory Audit of M/s Good Luck Company Private Limited.

Sir/ Madam,

We have been offered the appointment as statutory auditors of M/s Good Luck Company Private Limited by its management. In accordance with Clause 8 of Part I of the Schedule First to the Chartered Accountants Act, 1949, we would like to know from you, the reason(s), if any, for not accepting the aforesaid appointment.

An early reply at your end would be highly appreciated. Please acknowledge the receipt.

Thanking you,

Yours faithfully,

(PQR)

Prop./ Partner.

Auditing Amendments: Nov 2010 Examination

Please check this link:

http://www.4shared.com/file/egTc0JF3/Auditing_Amendments_for_CA_Fin.html?

Code of Ethics

Download Central Council General Guidelines (Chapter: Code of Ethics) from:

http://www.4shared.com/document/ae4yzILG/Code_of_Ethics_Compatibility_M.html?

IFRS Preliminaries

India has decided to go for convergence route. Accounting Standard Board (ASB) of ICAI has already issued exposure drafts on all of the converged standards (Indian standards equivalent to IAS/IFRS). Once these Standards are approved by the Council of ICAI these will be sent to NACAS. On approval from NACAS, the same will need to be notified in the Gazette. Looking at the stringent timelines for roadmap of IFRS implementation in India, this process needs to be completed at the earliest.

Whether the converged standards will be called as IFRS??

No. The proposed name for converged standards in India is Ind-AS. The financial statements prepared under these standards will be called as Ind-AS financial statements.

What would happen to the existing set of accounting standards??

The existing set of Indian accounting standards will continue to be in force. These accounting standards will be applicable to those entities which are not required to migrate to Indian equivalent of IFRS (Ind-AS).

What is the time schedule for IFRS implementation in India??

The time schedule for compliance with the notified accounting standards which are convergent with IFRS (Ind-AS) and consequently preparing their opening balance sheet in compliance with the converged standards (Ind-AS) is as under:

For Companies other than Insurance, banking & NBFCs

Phase	Applicable to	Applicable from
I	· Companies which are part of NSE – Nifty 50 · Companies which are part of BSE – Sensex 30 · Companies whose shares or other securities are listed on stock exchanges outside India · Companies, whether listed or not, which have a net worth in excess of Rs. 1,000 crores.	1st April, 2011
II	The companies, whether listed or not, having a net worth exceeding Rs. 500 crores but not exceeding Rs. 1,000 crores	1st April, 2013
III	Listed companies which have a net worth of Rs. 500 crores or less	1st April, 2014

For Insurance Companies, banking companies & NBFCs

Class of Companies	Applicable from
Insurance companies	1st April, 2012
Banking companies · All scheduled commercial banks and those urban co-operative banks (UCBs) which have a net worth in excess of Rs. 300 crores · Urban co-operative banks which have a net worth in excess of Rs. 200 crores but not exceeding Rs. 300 crores	1st April, 2013 1st April, 2014
Non-Banking Financial companies (a) Companies which are part of NSE – Nifty 50 (b) Companies which are part of BSE – Sensex 30 (c) Companies, whether listed or not, which have a net worth in excess of Rs. 1,000 crores. All listed NBFCs and those unlisted NBFCs which do not fall in the above categories and which have a net worth in excess of Rs. 500 crores	1st April, 2013 1st April 2014

Whether in the first year comparatives need to be given??

Companies covered in Phase I will prepare their financial statements for 2011-12 in accordance with the first set of Accounting Standards (i.e. the converged Accounting Standards) but will show previous years’ figures as per the financial statements for 2010-11, i.e., as per non-converged accounting standards.

However, the Companies will have an option to add an additional column to indicate what these figures could have been if the first set of Accounting Standards (i.e., converged accounting standards) had been applied in that previous year.

Whether companies covered in 2nd/3rd phase for application of the Ind-AS (i.e., the converged Accounting Standards) can voluntarily opt to apply the same w.e.f. accounting year beginning on 1-4-2011

Such Companies will have an option for application of the first set of accounting standards (i.e., the converged Accounting Standards) only for the financial year commencing on 1st April, 2011 or thereafter.

What is the cut off date for determining whether the companies fulfill the criteria for applicability for converged accounting standards (Ind-AS)

For testing the applicability for phase I, the date for determination of the criteria is the Balance Sheet as at 31st March, 2009 or the first Balance Sheet prepared thereafter when the accounting year ends on another date.

The cut-off date on which the aforesaid criteria shall be applied in order to determine the companies falling in each of the aforesaid four categories of companies will be the Balance Sheet as at 31st March, 2009 or the first Balance Sheet prepared thereafter when the accounting year ends on another date.

Computation of Net Worth:

The net worth will be calculated as under:

Share Capital

(+) Reserves excluding Revaluation Reserve

(-) Miscellaneous Expenditure

(-) Debit Balance of the Profit and Loss Account.

Further, it may be noted here that the criteria is to be applied to each company’s standalone accounts and not the consolidated accounts.

If the parent is covered in a particular phase, whether the subsidiaries, joint ventures or associates of parent would also be covered in the same phase??

The companies covered in a particular phase having subsidiaries, joint ventures or associates not covered in those phase/phases will prepare their consolidated financial statements according to Ind-AS (i.e., the converged Accounting Standards).

When one or more companies in a group fall in a phase other than the phase applicable to the parent company, they will continue to prepare standalone accounts according to the phase applicable to them but the parent will need to make amendments/adjustments to these accounts for the purposes of consolidation as per converged accounting standards. However, such subsidiaries, joint ventures or associate companies have the option for early adoption of converged accounting standards.

Once a company gets covered in the specified class of companies in any one of the phases and converts its opening Balance Sheet as per the specified date in accordance with Ind-AS, whether it would have to continue to follow the same set of accounting standards in the future as well even if it no longer satisfies the specified criteria

Yes, once a company starts following the Ind-AS (i.e. the converged Accounting Standards) on the basis of the eligibility criteria, it will be required to follow such Accounting standards for all the subsequent financial statements even if any of the eligibility criteria does not subsequently apply to it.

Is it permissible to adopt IFRS rather than Ind-AS

In case the notified converged accounting standards (Ind-AS) are not fully consistent with the IAS/IFRS, as issued by the IASB, it is presumed that Indian companies will continue to follow the Ind-AS (i.e., converged accounting standards) as notified by the Government of India and not the IFRS as issued by IASB.

AAS – 22/ SA 510: Initial Engagements – Opening Balances

• Audit Procedures:

1. A/c Policies being consistently followed;
2. Correct balances of various a/c’s have been correctly b/f;
3. Nature of Op. Bal. & risk of their misstatement in the current period;
4. Verify whether the Op. Bal. do not contain misstatements that materially affect the financial statements of the current period;

• Audit Reporting and Conclusions:

1. Unable to obtain sufficient audit evidence: Give Qualified / Disclaimer of opinion
2. Material misstatements that affect the current period financial statements: Give Qualified / Adverse opinion

Comparatives (AAS 25/ SA 710)

• Comparatives:

1. Corresponding previous year figures;

2. Comparative Financial Statements

• (1) vs. (2):

1. For CPYF, auditors report only refers to FS of current period;

2. For CFS, auditors report refers to each period for which FS are presented (i.e. auditors report covers preceding period also)

• AAS 25 applicable only to CPYF;

• Also refer SA 510 (AAS 22);

• Where prior period FS were audited, the auditors’ report should not specifically comment on CPYF because the auditors’ opinion is on the current period FS as a whole including corresponding figures;

• In case the prior period FS are unaudited, the incoming auditor should state such fact in the auditor’s report

Comparatives (AAS 25/ SA 710)

• Comparatives:

1. Corresponding previous year figures;

2. Comparative Financial Statements

• (1) vs. (2):

1. For CPYF, auditors report only refers to FS of current period;

2. For CFS, auditors report refers to each period for which FS are presented (i.e. auditors report covers preceding period also)

SA710/ AAS 25 applicable only to CPYF;

Also refer SA 510 (AAS 22);

Where prior period FS were audited, the auditors’ report should not specifically comment on CPYF because the auditors’ opinion is on the current period FS as a whole including corresponding figures;

In case the prior period FS are unaudited, the incoming auditor should state such fact in the auditor’s report

Major Provisions of SOX

The Sarbanes-Oxley Act's major provisions include the following:
 Creation of the Public Company Accounting Oversight Board (PCAOB);
 A requirement that public companies evaluate and disclose the effectiveness of their internal controls as they relate to financial reporting, and that independent auditors for such companies "attest" (i.e., agree, or qualify) to such disclosure;
 Certification of financial reports by chief executive officers and chief financial officers;
 Auditor independence, including outright bans on certain types of work for audit clients and pre-certification by the company's audit committee of all other non-audit work;
 A requirement that companies listed on stock exchanges have fully independent audit committees that oversee the relationship between the company and its auditor;
 Ban on most personal loans to any executive officer or director;
 Accelerated reporting of insider trading;
 Prohibition on insider trades during pension fund blackout periods;
 Additional disclosure;
 Enhanced criminal and civil penalties for violations of securities law;
 Significantly longer maximum jail sentences and larger fines for corporate executives who knowingly and willfully misstate financial statements, although maximum sentences are largely irrelevant because judges generally follow the Federal Sentencing Guidelines in setting actual sentences

ICAI Announcement for AAS and SA

The following list contains the details of the Standards on Auditing (SAs). For the purpose of November, 2009 examinations the students are advised to refer to the Standards on Auditing (SAs).



The details of the Standards on Auditing (SAs) with full text are being hosted for the guidance of the students.

( For Final – Old and Final – New )



S.No. Standards on Auditing and Number

1. Basic Principles Governing an Audit (SA 200)

2. Objectives and Scope of the Audit of Financial Statements (SA 200A)

3. Terms of Audit Engagement (SA 210)

4. Quality Control for Audit Work (SA 220)

5. Audit Documentation (230) (Revised)

6. The Auditor’s Responsibility to Consider Fraud and Error in an Audit of Financial Statements (SA 240) (Revised)

7. Consideration of Laws and Regulations in an Audit of Financial Statements (SA 250) (Revised)

8. Communication of Audit Matters with Those Charged with Governance (SA 260) (Revised)

9. Responsibility of Joint Auditors (SA 299)

10. Planning an Audit of Financial Statements (300) (Revised)

11. Identifying and Assessing the Risk of Material Misstatement Through Understanding the Entity and its Environment (SA 315) (Newly issued)*

12. Audit Materiality (SA 320)

13. The Auditor’s Responses to Assessed Risks (SA 330) (Newly issued)*

14. Audit Considerations Relating to Entities Using Service Organisations (SA 402)

15. Audit Evidence (SA 500) (Revised)

16. Audit Evidence - Additional Considerations for Specific Items (SA 501)

17. External Confirmations (SA 505)

18. Initial Engagements – Opening Balances (SA 510)

19. Analytical Procedures (SA 520)

20. Audit Sampling (SA 530) (Revised)

21. Auditing of Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures (SA 540) (Revised)

22. Related Parties (SA 550)

23. Subsequent Events (SA 560) (Revised)

24. Going Concern (SA 570) (Revised)

25. Written Representations (SA 580) (Revised)

26. Using the Work of Another Auditor (SA 600)

27. Relying Upon the Work of an Internal Auditor (SA 610)

28. Using the Work of an Expert (SA 620)

29. The Auditor's Report on Financial Statements (SA 700)

30. Comparatives (SA 710)

31. Engagements to Compile Financial Information (SRS 4410)

32. Engagements to Perform Agreed- upon Procedures Regarding Financial Information (SRS 4400)

33. Engagements to Review Financial Statements (SRE 2400)

34. The Examination of Prospective Financial Information (SRE 3400)



* SA 315 & SA 330 – become effective in April, 2008. For November 2009 Final (Old) Examination 34 standards on Auditing as given in the Annexure – I. The Standard on Auditing (SA) 400, “Risk Assessments and Internal Control”, SA 310, “Knowledge of the Business”, and SA 401, “Auditing in a Computer Information Systems Environment”, issued in June 2002, April 2000 and January 2003, respectively, would stand withdrawn.

Important Questions on Audit of General Insurance Companies

Questions
1. Write short notes on “Unexpired Risks Reserve”.
2. State the procedure for verification of Agents’ Balances in the course of Audit of GIC.
3. Write short notes on (i) Co-insurance; (ii) Re-insurance; (iii) Management Expenses of Insurance Companies; (iv) Valuation of Investments in GIC and (v) Solvency Margin.
4. What observations an auditor of a GIC is required to make in compliance of CAG directions u/s 619(3) of the Companies Act, in respect of (i) System of financial control; and (ii) Investments.
5. Part IV of Schedule B of IRDA (Preparation of Financial Statements and Auditor’s Report Of Insurance Companies) Regulations, 2000, requires a Management Report to be attached to the financial statements. What are the contents of such management report?
6. “In an audit of an insurance company, the Receipts and Payments Account is also subjected to audit”. Comment on this statement in brief.

Important Bank Audit Questions

Questions
1. Write a short note on income recognition and classification of advances by the banks.
2. An industrialist with surplus funds decided to form a Private Sector Bank. What are the guidelines issued by the Reserve Bank of India for formation of private sector banks?
3. Write short notes on Vostro and Nostro Accounts.
4. What are the duties of an auditor of a nationalised bank in respect of verification, valuation and disclosure of its investments?
5. Write short notes on (i) Concurrent Audit in case of banks, (ii) Returns submitted by banks to RBI, and (iii) Audit Committee of banks.
6. What are the eligibility criteria for the Banks to enter into Insurance business?
7. How is the income recognised in case of NPAs of the banks?
8. What is the procedure for verifying Branch Adjustment A/c and Contingent Liabilities?
9. Give a specimen of material accounting policies that may be followed by a bank in respect of its foreign exchange transactions.

Suggested Hints to the Practice Paper

1 (a)
As per Guidance Note on Treatment of Reserve Created on Revaluation of Fixed Assets, issued by ICAI, Revaluation Reserve is not a realised gain and hence cannot be so adjusted.
1 (b)
Refer AS-29 regarding Onerous Contracts
1 (c)
Discuss in light of AS-10, AS-28 and AAS-9
1 (d)
Refer AS-18
2 (a)
Section 224 (8) deals with mode of fixation of remuneration but does not specify the mode of recovery of the remuneration. Further, as a matter of professional ethics it is not proper to link the delivery of the audit report conditional upon the receipt of audit fees. Auditor’s Right to Lien may also be discussed.
2 (b)
Refer Notification No.1.CA(37)/70
2 (c)
See Clause 10 Part One Schedule I
2 (d)
Refer Notification No.1.CA. (153) 86
3 (a)
Refer AAS-6
3 (b)
Refer Chapter on Audit of Indirect Taxes
4 (a)
Refer Chapter on Audit of NBFCs
4 (b)
Refer Chapter on Investigations
5 (a)
Refer Guidance Note On Section 227 (3) (E) And (F) Of The Companies Act, 1956
5 (b)
Refer Chapter on EDP Audit
6 (a)
Refer Chapter on Bank Audit
6 (b)
Refer Chapter on Audit of General Insurance Companies
7 (a)
Refer Chapter on The Company Audit
7 (b)
Refer CARO, 2003
8 (a)
Refer Chapter on Other Aspects – Corporate Governance Clause 49
8 (b)
Refer Chapter on Audit of PSUs
8 (c)
Refer Chapter on Audit of Cooperative Societies
8 (d)
Refer AS-18
8 (e)
Refer Chapter on Audit of Members of Stock Exchanges

Practice Paper

1. As a Statutory Auditor, how would you deal with the following?
(a) The Balance Sheet of Meera Rescue Services Limited as at 31.03.2005 shows Revaluation Reserves amounting to Rs. 5 crores. The company incurred a loss of Rs. 4 crores during the year 2005-2006. The chief accountant of the company proposes to adjust the aforesaid loss against the Revaluation reserve.
(b) ABC Ltd. has taken a factory on operating lease at NOIDA. During the year 2005 it relocated its operations to Ghaziabad. However the old lease cannot be cancelled and it has to continue for the next few years. The old factory can also not be re-let to another user.
(c) XYZ Limited is in the business of making bricks. The company uses furnace to heat the bricks. During the year 2005-06, one furnace bursted due to high steam pressure. The company spent Rs. 2,60,000 to get the furnace in order. The Engineers said that the furnace can now work in the usual manner.
(d) Mr. Lal is the Director (Sales) in Hum-Tum Limited. He is drawing a monthly remuneration of Rs. 75,000 plus sales incentives of 10% on the sales made.
2. Comment on the following with reference to the Chartered Accountants Act, 1949 and Schedules thereto:
(a) The liability of audit fees of a company has been outstanding since last two years. This year after completing the audit, the auditor informs the secretary of the company over phone to bring the cheque of all the three years and take the delivery of the audit report. Discuss briefly the above statement in the context of the right of auditor to receive the remuneration.
(b) M/s Suraj and Co. are the Cost Auditors of Beauty Cosmetics Limited duly appointed u/s 233B of the Companies Act, 1956. Mr. Kiran, a chartered accountant is a part time employee of the M/s Suraj and Co. and accepts his appointment as a statutory auditor u/s 224 of the Companies Act, 1956, of Beauty Cosmetics Limited.
(c) Mr. L has charged a fee for representing his client in an Income Tax Appeal based on the expected relief to his client as a result of the appeal.
(d) Mr. Rahim is a practicing Chartered Accountant. He does not maintain the books of accounts.
3. Answer the following:
(a) What do you understand by Audit Risk? What is the relationship between different types of Audit Risks?
(b) What is your understanding about the term “Audit of Indirect Taxes”? Explain the steps involved in the indirect tax audit.
4. Answer the following:
(a) What are the matters that should be included in the Auditor’s Report on NBFC?
(b) Mr. Rahul (Director – Finance) of M/s XYZ Limited, approached to Good Bank Limited with a request to avail loan for the import of machinery costing Rs. 80 lacs. The Bank appointed you to investigate whether it is worthwhile to give loan to the company. What steps would you follow in this regard?
5. Answer the following:
(a) “There is no need to report in thick type or italics such matters which do not have any effect on the financial statements.” Comment.
(b) What are the different kinds of Internal Controls that should be considered by the auditor to determine the nature, timing and extent of his audit procedures in an EDP audit?
6. Answer the following:
(a) What steps should be followed by the auditor to verify the donations made by the bank?
(b) State the provisions regarding the management expenses in the context of general insurance business.
7. Answer the following:
(a) What are the provisions as regards remuneration of auditor? Mr. A is an auditor of a company. He was paid Rs. 45,000 towards his remuneration (comprising Rs. 25,000 as audit fees, including service tax; Rs. 10,000 towards preparing and filing Form 8, 13 regarding registration of charges and Rs. 10,000 as other charges). How would you disclose this remuneration in the Profit and Loss Account?
(b) What are the requirements of CARO, 2003 as regards the internal audit system?
8. Write short notes on any four of the following:
(a) Audit Committee.
(b) Propriety Elements of CARO, 2003.
(c) Special Report to the Registrar of Co-operative Societies.
(d) Key Management Personnel.

(e) Rolling Settlement.

Audit Risk Model

The three components of audit risk (RMMi, 1 - Pr(De), and 1 - Pr(Da)), are referred to respectively as inherent risk [IR], control risk [CR] and detection risk [DR]. This gives rise to the audit risk model of: AR = IR x CR x DR, where

• IR, inherent risk, is the perceived level of risk that a material misstatement may occur in the client's unaudited financial statements, or underlying levels of aggregation, in the absence of internal control procedures;
• CR, control risk, is the perceived level of risk that a material misstatement in the client's unaudited financial statements, or underlying levels of aggregation, will not be detected and corrected by the management's internal control procedures 70%;
• DR, detection risk, is the perceived level of risk that a material misstatement in the client's unaudited financial statements, or underlying levels of aggregation, will not be detected by the auditor.
  In practice, however, auditors evaluate risk components using terms such as LOW, MODERATE or HIGH rather than using precise probabilities.

Retention Period for Working Papers

The Council of the Institute of Chartered Accountants of India, at its 289th meeting held on August 19, 2009 at New Delhi, pursuant to the provisions of Rule 12 of the Chartered Accountants (Procedures of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, has decided to amend paragraph 83 of the SQC 1 as follows:
“83. The needs of the firm for retention ………………………………...............................................
In the specific case of audit engagements, the retention period ordinarily is no shorter than seven years from the date of the auditor’s report, or, if later, the date of the group auditor’s report.” (emphasis added)

Resolutions which are required to be passed as special resolutions

Section No.
Details
17 and 17A
Alter object clause, name of company, registered office to other State. Change to other State requires confirmation of Central Government (postal ballot required in case of listed companies). Change within the State but under jurisdiction of different ROC requires permission of RD u/s 17A – see 146(2))
21
Change name of Company, subject to approval of Central Government.
25(3)
To omit the name 'Limited' or 'Private Limited' in case of licensed company.
31(1)
Alter Articles of Association (postal ballot required in case of listed companies for insertion of provisions relating to private company).
77A
Buy back of securities (postal ballot required in case of listed companies, if in excess of 10% of total paid up capital in a year).
79A
Issue of sweat equity shares (postal ballot required in case of listed companies).
81(1A) and 81(3
Offer further shares to persons other than existing members (i.e. not to make a rights issue)
81(3)
Convert loans or debentures into shares, if approved before issue of debentures or raising of loans.
99
To determine that any portion of share capital shall not be called up except in winding up.
100(1)
Reduction in share capital (subject to confirmation by Court)
106
Varying rights of holders of class of shares (postal ballot required in case of listed companies for variation of rights attached to class of shares or debentures or other securities).
146(2)
Remove registered office out of city limits, but within the State (postal ballot required in case of listed companies).
149(2A)(b)
To commence new business.
163(1)
Keep statutory registers at any place within city / town other than the registered office.
208(2)
Authorise payment of interest out of capital - approval of Central Government is required
224(A)(1)
Appoint statutory auditors when share-holding of Government, financial institutions and nationalised banks is 25% or more.
237(a)(i)
Have affairs of the company investigated by inspector appointed by Central Government.
269 (read with Schedule XIII)
Approval of minimum remuneration to MD/WD/Manager, if more than prescribed ‘normal’ limit.
294AA(3)
Appoint sole selling agents in certain cases if paid-up capital is Rs 50 lakhs or more.
309(1)
Determine remuneration payable to a director (other than MD) - necessary only if Articles require a special resolution - applicable only to a public company or its subsidiary.
309(4)
Authorising payment by way of commission on basis of percentage of profit, to a director who is not MD or whole time director - applicable only to a public company or its subsidiary.
314(1), (1B)
Approval for holding office of profit under the company or subsidiary for director or his relative or partner, firm, private company etc. in certain cases.
323(1)
To alter memorandum of association so as to render unlimited liability of its directors or manager - resolution can be passed only if articles so authorise - such resolution can only apply to future director/s and manager. It does not apply to existing director / directors / manager during his current term, unless he has accorded his consent to his liability becoming unlimited.
372A(1)
Make / give investment / loans / guarantee / security beyond 60% / 100% limit (postal ballot required in case of listed companies for giving loans or extending guarantee or providing security in excess of limits).
433(a)
To get the company wound up by Court.
484(1)(b)
To have the company voluntarily wound up.
494(1)
To authorise liquidator in a voluntary winding up to accept shares as consideration for company's property.
512(1)(a)
To authorise liquidator in a members' winding up to exercise powers specified in section 457(1)(a) to (d).
517(1)
To accord sanction for any agreement between company and its creditors so as to bind company and its creditors.
546(1)(b)
To authorise liquidator to exercise certain powers in a voluntary winding up.
550(1)(b)
To direct disposal of books and papers after completion of winding up and about to be dissolved, in case of members' voluntary winding up.
579(1)
To alter form of constitution of a company registered under part IX of the Act, e.g. a partnership firm registered as a company.
581H to 581ZL
Resolutions relating to producer company.
SEBI
Resolution that acquirer need not make public offer to take 20% shares of target company (Required as per SEBI Takeover Regulations) (postal ballot required in case of listed companies).

PSU Audit

1. Do Board of Directors need to reply on the observations made by the CAG????? NO
2. In case of a PSU, an officer of the Comptroller and Auditor General insists that he is entitled to supplement its tax audit report???? Can't Insist

Peer Review

Issued in March 2002,
Objective:
To assure that profession is conscious of its responsibilities and strive its best to ensure that highest standards are observed by all practicing members rendering audit and attestation services to the society.
To ensure that in professional assignments, the member of ICAI.
(a) Comply with technical standard, and
(b) Have proper system to maintain quality of work.

Bonus Issue and Revaluation Reserve

An unlisted public company or a private limited company can issue bonus shares even out of its revaluation reserve [SC in Bhagwati Developers vs. Peerless General Finance & Investment Company (2005)]

Dual Dating in Auditor's Report

SA 560/ AAS 19: Subsequent Events
Additional date is included in the auditor’s report:

• to inform the users that the auditor’s procedures subsequent to that date;
• were restricted to the subsequent amendment of the financial statements.
  e.g.: “(Date of Auditors’ Report), except as to Note Y, which is as of (date of completion of audit procedures restricted to amendments described in Note Y)”
  “30-04-2009, except as to Note Y, which is as of 25-5-2009 which is restricted to amendments described in Note Y ”