Scope of Cost Accountant

New Company Bill 2008 =Tentative Provisions.

2010-08-24T09:03:00.002-04:00

Section 2(zb) “cost accountant” means a cost accountant as defined in clause (b) of subsection
(1) of section 2 of the Cost and Works Accountants Act, 1959 and who holds
a valid certificate of practice under sub-section (1) of section 6 of that Act;

Section 7(b) a declaration in the prescribed form by an advocate, a Chartered
Accountant, Cost Accountant or Company Secretary, who is engaged in the formation
of the company, or by a person named in the articles as a director, manager or Secretary
of the company, that all the requirements of this Act and the rules made thereunder in
respect of registration and matters precedent or incidental thereto have been complied
with.
Section 131(3) Where a company includes the particulars relating to items of cost in the books of
account in pursuance of a resolution passed by the company, the audit of cost records as
contained in the books of account of the company shall be conducted by a Cost Accountant
in practice who shall be appointed by the Board on such remuneration as may be determined
by the members in such manner as may be prescribed:
Provided that no person appointed under section 123 as an auditor of the company
shall be appointed for conducting the audit of cost records.
Section131 -4.Provided that the report on the audit of cost records shall be submitted by the Cost
Accountant in practice to the Board of Directors of the company.
266. (1) The Company Liquidator may, with the sanction of the Tribunal, appoint one
or more chartered accountants or company secretaries or cost accountants or legal
practitioners or such other professionals as may be necessary to assist him in the performance
of his duties and functions under the Act.
Section 274 (4)(b)(b) may at his own cost employ chartered accountants or company secretaries
or cost accountants or legal practitioners entitled to appear before the Tribunal under
section 393, who shall be at liberty to put to him such questions as the Tribunal may
consider just for the purpose of enabling him to explain or qualify any answers given
by him.
(b) may at his own cost employ chartered accountants or company secretaries
or cost accountants or legal practitioners entitled to appear before the Tribunal under
section 393, who shall be at liberty to put to him such questions as the Tribunal may
consider just for the purpose of enabling him to explain or qualify any answers given
by him.

2010-08-24T07:04:00.001-04:00

ICWAI Qualification for Appointment as Teaching Faculty in Universities
and Colleges in the Area of Management/Business Administration
University Grants Commission (UGC) has notified “UGC Regulations on Minimum
Qualifications for Appointment of Teachers and Other Academic Staff in
Universities and Colleges and Measures for the Maintenance of Standards in
Higher Education, 2010 vide its Circular No. F.3-1/2009 dated 30th June 2010.
The Regulations prescribe the minimum qualification for appointment of
teaching faculty in universities and colleges in the area of Management/
Business Administration. The qualifications specified for appointment of
Assistant Professor, Associate Professor and Professor in the above area and
Principal/Director/Head of the Institution include First Class Graduate and
professionally qualified Cost and Works Accountant among other
qualifications and subject to other requirements including qualifying
NET/SLET/SET as the minimum eligibility condition for recruitment and
appointment of Assistant Professors.
These regulations shall apply to every university established or incorporated by
or under a Central Act, Provincial Act or a State Act, every institution including a
constituent or an affiliated college recognised by the Commission, in
consultation with the university concerned under Clause (f) of section 2 of the
University Grants Commission Act, 1956 and every institution deemed to be a
university under Section 3 of the said Act.
The relevant extract of the notification is as follows:
MINIMUM QUALIFICATIONS FOR APPOINTMENT OF TEACHING FACULTY
IN UNIVERSITIES AND COLLEGES- MANAGEMENT/BUSINESS
ADMINISTRATION:
1. Assistant Professor:
I. Essential:
1. First Class Masters Degree in Business Management/Administration/in
a relevant management related discipline or first class in two year full
time PGDM declared equivalent by AIU/ accredited by the AICTE/UGC;
OR
2. First Class graduate and professionally qualified Chartered
Accountant/Cost and Works Accountant/Company Secretary of the
concerned statutory bodies.
II. Desirable:
1. Teaching, research, industrial and/or professional experience in a
reputed organization;
2. Papers presented at Conferences and/or published in refereed
journals.
2. Associate Professor:
i. Consistently good academic record with at least 55% marks (or an
equivalent grade in a point scale wherever grading system is followed) in
Master’s Degree in Business Management/Administration/in a relevant
management related discipline or first class in two years full time PGDM
declared equivalent by AIU/recognized by the AICTE/ UGC;
OR
First Class graduate and professionally qualified Chartered
Accountant/Cost and Works Accountant/Company Secretary of the
concerned statutory body.
ii. Ph.D. or Fellow of Indian Institute of Management or of an Institute
recognized by AICTE and declared equivalent by the AIU.
iii. A minimum of eight years’ experience of teaching/industry/ research/
professional at managerial level excluding the period spent for obtaining
the research degree.
OR
iv. In the event the candidate is from industry and the profession, the
following requirements shall constitute as essential requirements:
i. Consistently good academic record with at least 55% marks (or an
equivalent grade in a point scale wherever grading system is followed) in
Master’s Degree in Business Management/Administration/in a relevant
management related discipline or first class in two years full time PGDM
declared equivalent by AIU/recognized by AICTE/UGC,
OR
First Class graduate and professionally qualified Chartered
Accountant/Cost and Works Accountant/Company Secretary of the
concerned statutory body.
ii. A minimum of ten years experience of teaching/industry/research/
profession, out of which five years must be at the level of Assistant
Professor or equivalent excluding the period spent for obtaining research
degree. The candidate should have Professional work experience, which is
significant and can be recognized at national/international level as
equivalent to Ph.D. and ten years managerial experience in
industry/profession of which at least five years should be at the level
comparable to that of lecturer/assistant professor.
v. Without prejudice to the above, the following conditions may be
considered desirable:
a) Teaching, research, industrial and/or professional experience in a
reputed organization;
b) Published work, such as research papers, patents filed/obtained, books
and/or technical reports; and
c) Experience of guiding the project work/dissertation of PG/Research
Students or supervising R&D projects in industry.
3. Professor:
i. Consistently good academic record with at least 55% marks (or an
equivalent grade in a point scale wherever grading system is followed) in
Master’s Degree in Business Management/Administration/ in a relevant
discipline or consistently good academic record with at least 55% marks
(or an equivalent grade in a point scale wherever grading system is
followed) in two year full time PGDM declared equivalent by
AIU/recognized by the AICTE/UGC;
OR
First Class graduate and professionally qualified Chartered Accountant/
Cost and Works Accountant/Company Secretary of the concerned
statutory body.
ii. Ph. D. or Fellow of Indian Institute of Management or of an Institute
recognized by AICTE and declared equivalent by the AIU.
iii. A minimum of ten years’ experience of teaching/industry/research/
professional out of which five years must be at the level of Reader or
equivalent excluding the period spent for obtaining the research degree.
OR
iv. In the event the candidate is from industry and the profession, the
following shall constitute as essential:
1. Consistently good academic record with at least 55% marks (or an
equivalent grade in a point scale wherever grading system is followed) in
Master’s Degree in Business Management/Administration/ in a relevant
management related discipline or consistently good academic record with
at least 55% marks (or an equivalent grade in a point scale wherever
grading system is followed) in two years full time PGDM declared
equivalent by AIU/recognized by the AICTE/UGC.
OR
First Class graduate and professionally qualified Chartered Accountant
Cost and Works Accountant/Company Secretary of the concerned
statutory body.
2. The candidate should have professional work experience which is
significant and can be recognized at national/International level as
equivalent to Ph. D. and twelve years’ managerial experience in
industry/profession of which at least eight years should be at least at a
level comparable to that of Reader/Assistant Professor.
v. Without prejudice to the above, the following conditions may be
considered desirable:
i) Teaching, research, and/or professional experience in a reputed
organization;
ii) Published work, such as research papers, patents filed/obtained, books
and/or technical reports;
iii) Experience of guiding the project work/dissertation of PG/research
students or supervising R&D projects in industry;
iv) Demonstrated leadership in planning and organizing academic,
research, industrial and/or professional activities; and
v) Capacity to undertake/lead sponsored R&D consultancy and related
activities.
4. Principal/Director/Head of Institution
i. Qualification same as those prescribed for the post of professor in the
relevant discipline with a minimum of fifteen years’ experience of
postgraduate teaching/industry/research.
OR
ii. For candidates from Industry/Profession:
Qualification same as those prescribed for the post of Professor from
industry/profession stream with fifteen years’ experience of postgraduate
teaching/research out of which five years must be at the level or
Professor in the relevant discipline.
iii. Without prejudice to the above, the following conditions may be
considered desirable:
1. Administrative experience in senior level responsible position in the
Industry/Professional Institution.
For full text of the notification please visit the url:
http://www.ugc.ac.in/policy/revised_finalugcregulationfinal10.pdf

2010-08-24T06:45:00.000-04:00

Notice
Dated: 6th April 2009

Sub: Internal Audit for stock brokers/trading members/clearing members

This is further to Exchange Notice October 29, 2008 wherein all the stock brokers/trading members/clearing members were directed to carry out complete internal audit on a half yearly basis by chartered accountants, company secretaries or cost and management accountants who are in practice and who do not have any conflict of interest. It was also informed that, the first internal audit period would be from October 1, 2008 to March 31, 2009.

Further, on the basis of SEBI letter No. MIRSD/DPS-I/PG/158174/09 dated March 23, 2009, the applicability, scope/guidelines of audit, format of audit report, audit certificate and the time limit for submission of audit report are given as Annexure 1, 2 and 3.

All stock brokers/trading members/clearing members are advised to ensure compliance with the above requirements.

Members are advised to submit the Audit Reports to the Surveillance Department of the Exchange on 4th Floor of the Exchange at 7, Lyons Range, Kolkata.

In case of any queries / clarification, the members may contact Manager Surveillance and DGM Surveillance.

Company Secretary and Financial Controller

Annexure – 1

INTERNAL AUDIT FOR STOCK BROKERS/TRADING MEMBERS/CLEARING MEMBERS

Applicability

Trading Members (Stock Brokers) and Clearing members are required to appoint an internal auditor for carrying out complete internal audit in all segments of the Exchange in which they are enabled for trading/clearing (wherein atleast a one/single trade have been executed or cleared by them) and submit a report to the Exchange on half yearly basis. The first half year period would start from October 01, 2008.

Who can conduct internal audit

Internal audit is required to be carried out by any Chartered Accountant, Company Secretary or Cost and Management Accountant who is in practice and who does not have any conflict of interest.

Scope/Purpose of Audit

The purpose of audit should be

(a) to ensure that the books of account, records and documents have been maintained in the manner required under Securities Exchange Board of India Act, 1992, Securities Contracts (Regulation) Act, 1956, SEBI (Stock brokers and Sub-brokers) Regulations, 1992, Securities Contracts (Regulation) Rules, 1957, circulars issued by SEBI & Exchange, Bye laws of the Exchange including agreements, data security and insurance in respect of operations of trading member/clearing member.

(b) to ascertain whether adequate internal control systems, procedures and safeguards have been established and are being followed by the intermediary to fulfill its obligations under Securities and Exchange Board of India Act, 1992, Securities Contracts (Regulation) Act, 1956, SEBI (Stock brokers and Sub-brokers) Regulations, 1992, Securities Contracts (Regulation) Rules, 1957, circulars issued by SEBI & Exchange, Bye laws of the Exchanges and with respect to data security and insurance in respect of operations of trading member/clearing member.

(c) to ascertain whether any circumstances exist which would render the intermediary unfit or ineligible for dealing in securities market.

(d) to ascertain whether the provisions of the securities laws and the directions and/or circulars issued there under by SEBI/Exchange have been complied with

(e) to ascertain, whether the provision of Bye-laws, notices, circulars, instructions or orders issued by stock exchanges have been complied with

(f) to inquire suo motu into such matters as may be deemed fit by the auditor in the interest of investors or the securities market

Submission of internal audit report

Internal auditor would submit the audit report to the Proprietor/Partners/Board of respective trading/clearing member. In case the trading member is a partnership firm or corporate entity, the report would be placed before the meeting of its management committee/Board of Directors. In all cases, the trading member shall forward the audit report along with para-wise/point wise comments to respective stock exchanges within 3 months from the end of the relevant half year audit period. The audit report may be combined across segments and activity (trading/clearing) for respective Exchanges.

The initial internal audit should be for the period commencing from October 1, 2008 till March 31, 2009 and the audit report together with para-wise/point wise comments should be submitted to the Exchange within 30th June 2009 and the subsequent audit reports with comments should be submitted to the Stock Exchange within 3 months from the end of relevant half year audit period.

Non-compliance relating to internal audit by the members

Non-submission of internal audit report as per the aforesaid guidelines shall be treated as non-compliance and suitable disciplinary action may be initiated against the concerned member/s. Where, in the opinion of the Exchange, the quality of the reporting is not satisfactory or the audit is not carried out in accordance with the aforesaid guidelines, the Exchange reserves the right to advise the concerned member/s to change the auditors and/or submit revised reports.

Annexure – 2

Areas to be covered in internal audit and areas on which comments needs to be incorporated in the report are given below

1. Client registration and documentation

Execution of KYC, MCA/TPA, and RDD – checks and balances in place
Whether KYC, MCA/TPA, RDD are executed in the prescribed formats & the same is executed before execution of trades for the client?

Whether UCC is allotted to the client & the same is uploaded to the Exchange with PAN

Whether all fields in KYC including client’s financial details are filled in properly?

Whether proper proof of identity, PAN and proof of address are taken with KYC form?

Whether any contravening clauses are included in MCA/TPA?

Whether in person verification of clients is done by the employees of the trading member only?

Whether date of verification, name and signature of the official who has done in-person verification and the member’s stamp incorporated in the client registration form?

Whether copies of all the documents executed by client are given to the respective clients?

Whether change in address, bank account or demat account is carried out on receipt of written request along with documentary proof from the respective client?

Whether client details including financial details are reviewed periodically and updated?

Verification of formats of KYC, MCA/TPA and RDD and attachments including proof of identity and address, as prescribed by SEBI/BSE

Verification that Contradictory clauses are not mentioned in KYC, MCA/TPA and RDD

Systems and procedures put in place by member for verification of PAN before opening account

Procedure followed by the member for informing UCC to the clients & uploading to the Exchange

Mechanism to ensure financial details of clients

Procedure adopted for in person verification of clients

Procedure adopted by relationship managers, if any, for procuring new clients

Delivery of copies of client registration documents to the clients

Storage of client registration documents and retrieval mechanism

Procedure adopted for obtaining clients’ consent for electronic contract notes

Periodic review of client related information and updation of the same in system

Verification of RDD/KYC/MCA/TPA of different types of clients

Acquaintance procedure for new clients

Applicable SEBI Circulars.

SEBI circular no. SMDRP/Policy/Cir-39/2001 dated July 18, 2001

SEBI circular no. SEBI/MIRSD/DPS-1/Cir-31/2004, dated August 26, 2004 & Regulation-7 D

SEBI circular no. MRD/DoP/SE/Cir- 35/2004 dated October 26, 2004

SEBI circular no. MRD/DoP/Cir- 05/2007 dated April 27, 2007

MIRSD/DPS-III / 130466 / 2008 dated July 02, 2008

2. Order management and risk management systems

Procedure adopted for receipt of orders from clients
Whether checks are in place to ensure that no unauthorized orders are executed from any of the terminals?

Whether control reports like orders executed away from market price, client-wise / scrip-wise / terminal-wise volumes / exposures are generated to monitor any manipulation or unwarranted activity?

In case of dormant accounts, are there any checks in place to ensure that in case the account is reactivated whether it is operated by the respective client only?

Whether initial and other margins are collected from respective clients in the prescribed form of funds, fixed deposit receipts, bank guarantees and approved securities with appropriate haircut?

Whether the member has a proper system for reporting the correct client margin collection, in Derivatives segment?

Verify whether the margin reported by the member to the Exchange in Derivatives segment is actually collected and available in the books of accounts of the member. In case of any irregularity observed, mention the instances wherein wrong reporting of margin collected from clients/trading members was observed.

Whether Risk Management System (RMS) includes policy on margin collection from clients/trading member and the RMS is documented?

Whether proper systems are in place to ensure timely collection for pay-in from the respective client as per settlement schedule?

Whether proper monitoring mechanism is in place to review long outstanding debit balances in clients’ accounts and recovery of the same?

Whether member has reported details of client funding, if any, to the exchange within prescribed time limit?

What are the sources of funds in case client funding is observed?

Whether all the institutional trades are routed through custodians by following Straight Through Processing (STP) ?

What are the reasons for institutional trades not being routed through custodians? Whether any specific pattern is observed for the same?

Whether member has obtained prior approval from the exchange before providing terminal to the clients under DMA facility?

Whether member has complied with regulatory requirements related to. DMA?

Mechanism for order management and execution

Procedure adopted for setting Limits at client level / Terminal level/Dealer level

Policy on Margin collection mechanism and the modes of margin money

Procedure adopted for reporting of client margin collection to Clearing House

Review of process adopted for monitoring / recovery of long outstanding debit balances

Procedure adopted for calculation & reporting client funding

Procedure for monitoring institutional trades not routed through custodians

Procedure adopted for providing Direct Market Access (DMA) facility

Applicable SEBI Circulars.

SEBI circular no. MRD/DoP/SE/Cir-07/2005 dated February 23, 2005

SEBI circular no. MRD/DoP/SE/Cir- 17/2005 dated September 02, 2005

Exchange Notice no. 20040420-12 dated April 20, 2004.

Exchange notice no. 20080417-24 dated April 17, 2008.

Exchange Notice No. 20051216-8 dated December 16, 2005

3. Contract notes, Client margin details and Statement of accounts

Procedure adopted for issuance of contract notes
Whether contract notes are sent within 24 hours of execution of trades and margin details are sent daily to respective clients and proof of delivery / dispatch is maintained?

Whether all prescribed details including name and signature of authorised signatory, dealing office details and brokerage are contained in contract note?

In case contract notes and margin details are sent in electronic form, whether log is maintained? Whether trail of bounced mails is maintained and physical delivery is ensured in case of bounce mails?

Whether member has complied with regulatory requirements related to. Electronic Contract Notes(ECN)?

Whether complete statement of accounts for funds and securities are issued on a quarterly basis to clients, with error reporting clause? Whether proof of sending the same is maintained?

Verification of format of contract notes issued

Verification of copy of contract note with Proof of dispatch/register of dispatch/logs maintained

Adherence to electronic contract note norms, if applicable

Procedure adopted for sending statement of accounts

Contents & periodicity of statement of accounts of funds and securities

Procedure adopted for sending margin details to clients

Procedure for maintaining acknowledgement / proof of delivery of contract notes/statement of accounts/margin details to the clients

Applicable SEBI Circulars.

Clause B(2) of Code of conduct for Stock Brokers specified under Regulation 7

SMD-1/23341 dated November 18, 1993

SMD (B)/104/22775/93 dated October 29, 1993

SMD/MDP/CIR/043/96 dated August 5, 1996

MRD/DoP/SE/Cir-20/2005 dated September 08, 2005

SEBI/DNPD/143542 /Cir-43/08 dated November 06, 2008

4. Dealing with clients’ funds and securities

Verification of details of cash receipts from / payments to clients, if any, observed during the audit period are to be given (mentioning any specific branch involved).
Whether cash dealings with clients are done by branches / sub brokers?

Whether banker’s cheque / demand draft are accompanied with written request from the respective client?

Whether pay-in or pay-out is received from or delivered to respective clients only?

Whether any instances were observed wherein pay-in / pay out was received from / made to account other than the respective client account? Whether systems are in place to ensure compliance in this regard by the member?

Whether collaterals of clients were pledged with banks / other entities for raising funds? If yes, details of such instances observed are to be given.

Whether funds raised by pledging client securities were utilised for respective client only? List of instances to be provided in case of non-utilisation of proceeds for respective client?

Whether client’s funds / securities are transferred to respective clients accounts within one working day of after the pay-out of the settlement?

Whether any instance of misutilisation of clients’ funds or securities is observed? If yes, give complete details of such instances

Whether bank book and register of securities are in alignment with bank statements and transaction statements provided by banks and depositories?

Whether dividend and other corporate benefits received on behalf of clients is paid/credited/passed on to the respective clients account ?

Verification of internal controls adopted by the member while accepting banker’s cheque / demand draft from clients

Procedure for ensuring that receipts and payment of funds/securities are from/to respective client only

Periodic Reconciliation of books of accounts

Verification of following books of accounts/records

- Register of Securities

- Bank Statements

- Depository accounts maintained by member

- Client ledgers

- Cash Book

- Bank Book

- Details of records of client securities pledged, if any.

- Underlying for any overdraft/loan account.

Applicable SEBI Circulars.

SEBI circular no. SEBI/MRD/SE/Cir- 33/2003/27/08 dated August 27, 2003

Code of conduct for Stock Brokers specified under Regulation 7 of SEBI (Stock Brokers and Sub brokers) Regulations, 1992.

SEBI circular no. MRD/DoP/SE/Cir-11/2008 dated April 17, 2008

5. Banking and Demat account operations

Procedure for segregation of own and clients’ funds and securities (in separate accounts)
Whether member maintains separate bank accounts for clients funds & own funds. Also, whether maintains separate beneficiary accounts for clients’ securities & own securities?

Whether clients funds and securities are segregated from own funds and securities?

Are there any instances of use of client beneficiary account or client bank account for unauthorised purposes? In case of any irregularity observed, mention the instances in detail.

Internal controls for use of client bank and client beneficiary accounts only for authorized purposes.

Applicable SEBI Circulars.

SEBI circular no. SMD/SED/CIR/93/23321 dated November 18, 1993.

6. Terminal operations and systems

Procedure and policy adopted by member before allotment of trading terminals
Whether terminals are provided by the member in his head office, branch office or the office of sub broker?

Whether any unauthorized terminal is observed to be allotted? If yes, give complete details.

Whether periodic audit of systems and software is conducted by certified systems auditor?

Whether terminals are operated by approved persons/approved users with valid BCSM certification?

Whether correct User name, login id, terminal location are reported to the Exchange?

Whether internal controls are in place to ensure that the certification of approved users has not expired?

Whether prior permission is obtained by member for providing IML? Whether member has complied with applicable provision of IML?

Whether updated version of software is used?

Whether back up facilities are in place and followed?

Whether broker has got his system audit done & submitted the system audit report to the Exchange within prescribed time limit?

Verification of terminals and its users, at the audit place.

Verification of certification of the approved users.

Due diligence adopted for password security

Procedure in place for audit of systems and software

Periodic updating of version and back up mechanism

System adopted for data storage, security and access

Verification of logs from server

Applicable SEBI Circulars.

SEBI circular no. SMDRP/Policy/Cir-49/2001 dated October 22, 2001

SEBI/MRD/SE/15958/2003 August 22, 2003

Exchange Notice No.20070517-26 dated May 17, 2007

7. Management of branches / sub brokers and internal control

System and Policy followed for opening / closing of branch
Whether survey is conducted by the member for opening / closing of branches?

In case of closure, whether advance notice of the same is sent to clients? Proof of the same.

Whether there is monitoring mechanism to identify sudden increase / decrease in client level turnover from any specific branch?

Whether periodic inspection of branch / sub broker is conducted and reports are maintained? What is the follow-up mechanism?

Whether unregistered intermediation is observed?

Whether the member has shared commission/brokerage with entities with whom trading members are forbidden to do business / another trading member / employee in the employment of another trading member?

Whether internal controls exists and are sufficient to cover the risks at the members end?

Whether Stock broker indemnity policy with standard cover/clauses has been taken?

Procedure adopted to inform the same to clients

Periodicity and procedure adopted for inspection of branches / sub brokers

Reporting mechanism and mode of informing the inspection observations to branches / sub brokers

Follow up action plan

Policy of fixing of roles and responsibilities of officials in head office, branches and sub-brokers office

Process laid out so as to prevent unregistered intermediation

Documentation of Internal controls and Comments on Internal controls in place

Verification of Stock broker indemnity insurance policy

Sharing of commission/brokerage

Applicable SEBI Circulars.

Section 12 of SEBI Act

SEBI circular no. SMD/SED/RCG/270/96 dated January 19, 1996

SEBI circular no. SMD/Policy/CIR-3/98 dated January 16, 1998

SEBI circular no. Sub-Brok/Cir/02/2001 dated January 15, 2001

Regulation 18B of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992

SEBI circular no. SMD/POLICY/CIRCULAR/3- 97 dated March 31, 1997.

8. Investor grievance handling

Mechanism to monitor complaints lodged with branches/sub-brokers
What is the system to report complaints received by branches / sub brokers to the head office?

Whether complaints are received from specific branch/sub-broker?

Whether complaints register includes complete details of investor complaints?

What is the procedure adopted to resolve complaints?

Whether specific action plan is framed by the member in respect of long pending complaints?

Whether designated email id for investor grievances is created and informed to the investors ?

What is the periodicity of monitoring investor complaints?

Whether complaints of substantial amount is escalated to the top management ?

Maintenance of complaints register

Redressal mechanism for complaints registered against the member

Comment on complaints pending for long period

Verification of investor grievance register and email id

Internal control for verification of complaints received through the designated email –id

Applicable SEBI Circulars.

SEBI circular no. MRD/DoP/Dep/SE/Cir-22/06 dated December 18, 2006

Clause 1(d) of Regulation 12A

9. Maintenance of Books of Accounts

Prescribed books of accounts, registers and records are maintained Exchange wise, with the required details and for the stipulated period as per regulatory requirement

Whether prescribed books of accounts, registers and records are maintained Exchange wise, with the required details and for the stipulated period as per regulatory requirement?

Whether exchange wise separate books of accounts are maintained?

Whether member has dealt with any suspended /defaulter /expelled member and/or prohibited entity?

Whether prior approval has been obtained by member for change in shareholding/directors/constitution?

Whether prior approval has been obtained in case the member has dealt with another member of the Exchange?

Whether member has intimated the Exchange in case of they have dealt with member of another stock exchange?

Whether advertisements are issued after prior permission of the Exchange?

Whether member maintains and updates client master in its back office?

Whether financial reports of the member has been analysed? Comments on the same.

Verification of books of accounts and other records

Internal controls on the process for taking approval of the Exchange

Analysis of financial reports

Applicable Regulations & SEBI Circulars

Rule 15 of Securities Contract Regulation Rules 1957

Regulation 17(1) & 18 of SEBI (Stock Broker Sub-broker) Regulation 1992

Rule 4 (c) of SEBI (Stock Brokers and Sub Brokers) Rules, 1992

Clause C(4) & C (5) of Regulation 7

SEBI Circular No. SMDRP/Policy/Cir-49/2001 dated October 22, 2001

SEBI circular no. MIRSD/MSS/Cir- 30/ 13289/03 dated July 09, 2003

SEBI circular no. SEBI/MIRSD/Cir-06/2004 dated January 13, 2004

SEBI circular no. MIRSD-DR 1/SRP/Cir- 43/28408/04 dated December 15, 2004

SEBI circular no. SEBI/MRD/SE/Cir-15/2005 dated August 4, 2005

10. Systems & Procedures pertaining to Prevention of Money Laundering Act (PMLA), 2002

Customer acceptance policy and customer due diligence measures

What is the process adopted by member to verify the identity of the customer and/or the person on whose behalf a transaction is being conducted ?

Whether any account was opened in fictitious name/benami account ?

What checks and balances are in place to ensure that the identity of the client does not match with any person having criminal background or is not banned in any other manner?

What are the factors of Risk perception having regard to client's location, address, nature of business activity, trading turnover and the manner of making payments so that the clients can be classified in to "High Risk", " Medium Risk"," Low Risk" category?

Whether details of appointment of Principal Officer and change in Principal officer, if any is intimated to FIU-India?

Whether member has adopted and implemented written guidelines prescribed under PMLA, 2002?

Whether member has adequate system to generate alerts for suspicious transactions?

As per provisions of Prevention of Money Laundering Act, 2002 whether record of transactions, its nature and its value are maintained?

Walk through of the process

Process of generation and monitoring alerts

System in place that allows continuous monitoring of transactions

Process for identifying STR (Suspicious Transaction Report) and reporting the same to FIU-India filed

Processes for verification of alerts with KYC details

Applicable SEBI Circulars.

SEBI circular no. ISD/CIR/RR/AML/1/06 dated January 18, 2006

SEBI circular no. ISD/CIR/RR/AML/2/06 dated March 20, 2006

SEBI circular no. ISD/AML/CIR-1/2008 dated December 19, 2008

SEBI letter no. ISD/SR/AK/AML/150847/2009 dated January 15, 2009

11. Transfer of trades

Transfer of trades in the back office

Whether any trades were transferred from one client code to another client code or from client code to pro or vice-versa in the back office of the member?

Whether any pattern was observed in case, transfer trades carried out at member’s back office

Verification of trade files downloaded by the Exchange with sauda register/back-office file of member (based on which contract notes are generated)

Internal controls for transfer of trades

Applicable SEBI Circulars.

SEBI circular no. SEBI/MRD/SE/Cir- 32/2003/27/08 dated August 27, 2003

12. Margin Trading

Verification of agreements
Whether member has obtained specific approval from the exchange, in case he is providing margin trading facility to his clients?

Whether member has complied with regulatory requirements related to margin trading?

Records of funding

Applicable SEBI Circulars.

SEBI circular no. SEBI/MRD/SE/SU/Cir-15/04 dated March 19, 2004

13. Proprietary Trading

Verification of ids enabled for pro

If member is doing pro trading, whether member has disclosed this information to his clients?

If member is doing pro trading from multiple locations, whether member has obtained prior approval from the Exchange in this regard?

Process for approval of Exchange

Applicable SEBI Circulars.

SEBI circular no. SEBI/MRD/SE/Cir-32/2003/27/08 dated August 27, 2003

SEBI letter no. SEBI/MRD/SE/Cir-42/2003 dated November 19, 2003

14. Internet Trading

Process of approval from Exchange

Verification of internet agreements
Whether member has obtained specific approval from the exchange, in case he is providing internet trading facility to his clients?

Whether member has complied with regulatory requirements related to internet trading?

Whether broker has got his system audit done & submitted the system audit report to the Exchange within prescribed time limit?

Procedure followed for user id and password

Internal controls for internet trading

Applicable SEBI Circulars.

SEBI Circular no. SMDRP/POLICY/CIR-06/2000 dated January 31, 2000

Exchange Notice No. 47315 /2000 dated April 17, 2000

15. Operations of Professional Clearing member/ Members clearing trades of other trading members

Verification of execution of trading -clearing member (TM-CM) agreements/Custodial Participant agreements
Whether TM-CM agreements are executed in prescribed formats with trading member?

Whether Clearing member custodial participant agreements are executed in prescribed formats ?

Whether statement of accounts has been sent to trading member/custodial participants/?

Whether clearing members had collected appropriate and adequate margins in prescribed forms from respective trading members?

Whether Margin collection reported to Exchange is in accordance with margins actually collected from trading member ?

Whether exposure allowed to trading members were based on requisite margins available with the clearing member?

Whether interest is charged to the trading member? If yes, what is the basis of interest with complete details like percentage of interest, periodicity of interest charged

Verification of issuance of statement of accounts to trading members/custodial participants

16. Securities Lending & Borrowing Scheme

Process of approval from Exchange

Whether member has obtained specific approval from the exchange?

Whether member has complied with regulatory requirements related to SLBS ?

Verification of SLBS agreement

Applicable SEBI Circulars.

SEBI circular no. MRD/DoP/SE/Dep/Cir- 14 /2007 dated the December 20, 2007

SEBI circular no. MRD/DoP/SE/Cir- 31 /2008 dated October 31, 2008

Points to be noted

The guidelines prescribed hereunder do not limit the scope of the internal audit. The points mentioned are only indicative in nature and not exhaustive. This has been prepared based on the regulatory requirement (as per relevant acts, rules, regulations and circulars) which keep on developing from time to time. The auditors should peruse them and update the scope of the audit.

The report shall also include the following.

1. If any major significant deviations and deviations of recurring nature are observed, the same should be reported separately in the covering page of the audit report. If auditors observations are in the nature of a deviation or a recommendation, the member’s response should be sought and recorded in the report.

2. Comments by auditor on the status of compliance in respect of deviations reported in the last audit report,

3. Improvements brought about in the operations between the last audit and the current audit.

4. In case the member has been inspected in the relevant half year by the Exchange / SEBI, comments by the auditor on whether the member has complied with the observations made in the Exchange/SEBI inspection report are to be included in the audit report.

5. A statement by the auditor that the provisions of SCRA 1956, SEBI Act 1992, SEBI (Stock Brokers and Sub-brokers) Regulations 1992, Rules, Bye laws, Regulations and circulars of SEBI, agreements, Bye laws of Exchange, circulars of Clearing House, data security and insurance have been covered in the audit.

6. Auditor shall specifically declare about direct / indirect interest in or relationship with the member or its share holders / directors / partners / proprietors / management, if any and also confirm that they do not perceive any conflict of interest in such relationship / interest while conducting internal audit of the said member.

7. Membership number allotted by the affiliated professional body should be quoted at the bottom of the report as provided in the format.

8. Observations in the report should be quantified giving instance wise details, details of segment and activity ( trading or clearing) for which such violations are observed.

Annexure - 3

CERTIFICATE FOR INTERNAL AUDIT

We have examined the relevant books of accounts, records and documents maintained by M/s. _______________, (name of the trading/clearing member) bearing SEBI registration number ______________________) a member of the Calcutta Stock Exchange Association Ltd., / National Stock Exchange of India Limited / Bombay Stock Exchange Ltd. / MCX-Stock Exchange /other Stock Exchange, for the following segments to fulfill the internal audit requirement as prescribed by SEBI vide circulars dated August 22, 2008 & October 21, 2008, for the half year ended_____________________.

Segments

(Cash Segment/Derivatives Segment / Debt Segment /Currency Derivatives/Securities Lending & Borrowing segment)
Activity (Trading/Clearing/Trading and Clearing)
SEBI registration number

The purpose of this audit is to examine that the processes, procedures followed and the operations carried out by the Trading Member/Clearing Member are as per the applicable Acts, Rules, Regulations, Bye-laws and Circulars prescribed by SEBI and the Stock Exchange.

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of this internal audit. In our opinion proper books of accounts, records & documents, as per the regulatory requirement have been maintained by the member, so far as it appears from examination of the books.

We have conducted the audit within the framework provided by SEBI/Stock Exchange for the purpose of this internal audit.

To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud / non-compliance /violation by the member is observed during the course of this audit.

Based on the scrutiny of relevant books of accounts, records and documents, we certify that the member has complied with the relevant provisions of SEBI Act, 1992, Securities Contracts (Regulation) Act 1956, Securities Contracts (Regulation) Rules 1957, SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 and various circulars of SEBI. The member has complied with the Rules, Bye-laws, Regulations of BSE / NSE / MCX-SE and various circulars issued by the Stock Exchange and Clearing Corporation/Clearing House.

We declare that we do not have any direct / indirect interest in or relationship with the member or its directors / partners / proprietors / management and also confirm that we do not perceive any conflict of interest in such relationship / interest while conducting internal audit of the member.

In our opinion and to the best of our information and according to the explanations given to us by the proprietor/partner(s)/director(s)/compliance officer, the Report provided by us as per the Annexure and subject to our observations, which covers the entire scope of the audit, is true and correct.

__________________

Company Secretary / Cost and Management Accountant / Chartered Accountant

(Seal & Signature)

(Name of the Proprietor / Partner)

Membership no. / CP. No.

Place:-

Date:-

Lending Under Consortium arrangements RBI certification

2009-02-21T23:19:00.000-05:00

This may be a new addition to CMAs apart from other professionals..
=========================================================
RBI/2008-2009/379

DBOD.No. BP.BC.110/08.12.001/2008-09
February 10, 2009

The Chairman & Managing Directors /
Chief Executive Officers of
All Scheduled Commercial Banks
(Excluding RRBs and LABs)

Dear Sir,

Lending under Consortium Arrangement / Multiple Banking Arrangements

Please refer to Paragraph 2(iii) of our circular RBI/2008-09/183/DBOD.No.BP.BC.46 /08.12 .001/2008-09 dated September 19, 2008 on the captioned subject.

2. In terms of Paragraph 2(iii) of the above circular, in order to strengthen the information sharing system among banks in respect of the borrowers enjoying credit facilities from multiple banks, the banks are required to obtain regular certification by a professional, preferably a Company Secretary, regarding compliance of various statutory prescriptions that are in vogue, as per specimen given in Annex III to the above circular.

3. In this context it is clarified that in addition to Company Secretaries, banks can also accept the certification by a Chartered Accountants & Cost Accountants. Further, on the basis of suggestions received from Indian Banks Association, Annex III - Part I & Part II (copy enclosed) has also been modified.

Yours faithfully,

(P. Vijaya Bhaskar)
Chief General Manager.

Encl: As above.

--------------------------------------------------------------------------------

Part : I

DILIGENCE REPORT

To,
The Manager,

___________________ (Name of the Bank)
I/We have examined the registers, records, books and papers of ____________ Limited having its registered office at……………………………………………………… as required to be maintained under the Companies Act, 1956 (the Act) and the rules made thereunder , the provisions contained in the Memorandum and Articles of Association of the Company, the provisions of various statutes, wherever applicable, as well as the provisions contained in the Listing Agreement/s, if any, entered into by the Company with the recognized stock exchange/s for the half year ended on…………… . In my/our opinion and to the best of my/our information and according to the examination carried out by me/us and explanations furnished to me/us by the Company, its officers and agents. I/We report that in respect of the aforesaid period:

1. The management of the Company is carried out by the Board of Directors comprising of as listed in Annexure …., and the Board was duly constituted.
During the period under review the following changes that took place in the Board of Directors of the Company are listed in the Annexure …., and such changes were carried out in due compliance with the provisions of the Companies Act, 1956.

2. The shareholding pattern of the company as on ------- was as detailed in Annexure …………:
During the period under review the changes that took place in the shareholding pattern of the Company are detailed in Annexure…….:

3. The company has altered the following provisions of

(i) The Memorandum of Association during the period under review and has complied with the provisions of the Companies Act, 1956 for this purpose.

(ii) The Articles of Association during the period under review and has complied with the provisions of the Companies Act, 1956 for this purpose.

4. The company has entered into transactions with business entities in which directors of the company were interested as detailed in Annexure….. .

5. The company has advanced loans, given guarantees and provided securities amounting to Rs. ____________ to its directors and/or persons or firms or companies in which directors were interested, and has complied with Section – 295 of the Companies Act , 1956.

6. The Company has made loans and investments; or given guarantees or provided securities to other business entities as detailed in Annexure ….and has complied with the provisions of the Companies Act, 1956.

7. The amount borrowed by the Company from its directors, members, financial institutions, banks and others were within the borrowing limits of the Company. Such borrowings were made by the Company in compliance with applicable laws. The break up of the Company's domestic borrowings were as detailed in Annexure ….. :

8. The Company has not defaulted in the repayment of public deposits, unsecured loans, debentures, facilities granted by banks, financial institutions and non-banking financial companies.

9. The Company has created, modified or satisfied charges on the assets of the company as detailed in Annexure…. Investments in wholly owned Subsidiaries and/or Joint Ventures abroad made by the company are as detailed in Annexure ……

10. Principal value of the forex exposure and Overseas Borrowings of the company as on ………… are as detailed in the Annexure under"

11. The Company has issued and allotted the securities to the persons-entitled thereto and has also issued letters, coupons, warrants and certificates thereof as applicable to the concerned persons and also redeemed its preference shares/debentures and bought back its shares within the stipulated time in compliance with the provisions of the Companies Act,1956 and other relevant statutes.

12. The Company has insured all its secured assets.

13. The Company has complied with the terms and conditions, set forth by the lending bank/financial institution at the time of availing any facility and also during the currency of the facility

14. The Company has declared and paid dividends to its shareholders as per the provisions of the Companies Act, 1956.

15. The Company has insured fully all its assets.

16. The name of the Company and or any of its Directors does not appear in the defaulters' list of Reserve Bank of India.

17. The name of the Company and or any of its Directors does not appear in the Specific Approval List of Export Credit Guarantee Corporation.

18. The Company has paid all its Statutory dues and satisfactory arrangements had been made for arrears of any such dues.

19. The funds borrowed from banks/financial institutions have been used by the company for the purpose for which they were borrowed.

20. The Company has complied with the provisions stipulated in Section 372 A of the Companies Act in respect of its Inter Corporate loans and investments.

21. It has been observed from the Reports of the Directors and the Auditors that the Company has complied with the applicable Accounting Standards issued by the Institute of Chartered Accountants in India.

22. The Company has credited and paid to the Investor Education and Protection Fund within the stipulated time, all the unpaid dividends and other amounts required to be so credited.

23. Prosecutions initiated against or show cause notices received by the Company for alleged defaults/offences under various statutory provisions and also fines and penalties imposed on the Company and or any other action initiated against the Company and /or its directors in such cases are detailed in Annexure….. .

24. The Company has (being a listed entity) complied with the provisions of the Listing Agreement.

25. The Company has deposited within the stipulated time both Employees' and Employer's contribution to Provident Fund with the prescribed authorities.

Note : The qualification, reservation or adverse remarks, if any, are explicitly stated may be stated at the relevant paragraphs above place(s).

Place: Signature:
Date: Name of Company Secretary/Firm:
C.P. No.:

ICWAI going truely Global !!!Kudos members Yes We can.

2009-02-21T23:14:00.000-05:00

http://www.hindu.com/edu/2009/02/16/stories/2009021650440100.htm

Going global, ICWAI way

--------------------------------------------------------------------------------

The institute is exploring possibilities of tie-ups with counterparts in developed countries

--------------------------------------------------------------------------------

The fast-paced changes that are sweeping across the world in financial and accounting professions are posing new challenges to accountants in managerial and senior positions in the corporate world in the country. This has placed a new responsibility on the professional bodies that produce accountants to update the curriculum and bring it on a par with international standards.

The Institute of Cost and Works Accountants of India (ICWAI), which has sensed an urgency in this direction, has not only updated its curriculum with effect from January, 2008 and brought it on a par with the standards prescribed by the International Federation of Accountants (IFAC), but also started exploring the possibilities of entering into tie-ups with its counterparts in developed countries. This is mainly to ensure that the Indian accountants find acceptance by global business players like multinational companies.

CIMA tie-up

One such tie-up of great significance the ICWAI has entered into recently is with the Chartered Institute of Management Accountants (CIMA) of the United Kingdom, one of the oldest accounting bodies .

“The MoU with CIMA, UK heralds an era of opening-up for the Indian students. Never before did Indian students have an opportunity to attain international accounting recognition at such a fast pace,” says ICWAI president Kunal Banerjee.

The MoU, he explains, has provided for exemption of 11 of the total 14 papers in the CIMA examination for those who have qualified in the ICWAI examination. In what is called the ‘Gateway Scheme’, Indian students who have completed the ICWAI final examination can straightaway join the last level, of the CIMA examination.

“All they have to do is appear for a proficiency test called CIMA Professional Gateway Assessment (CPGA) by paying a fee of £40, which is half of what the CIMA charges for its own students,” Mr. Banerjee says.

He points out that the arrangement is also a great money-saver for Indian students, as they will have to pay a fee of £80 for each appearance of each of these three papers only. In normal course, Indian students desiring to complete the CIMA examination will have to pay £80 for each appearance of each of the 14 papers.

As a token of reciprocity, ICWAI has exempted CIMA-qualified persons from appearing for 12 of the total 18 papers. However, six papers dealing mainly with Indian corporate laws and related aspects, will have to be cleared.

Mr. Banerjee says there have been fruitful discussions with the Institute of Management Accountants (IMA), USA and the Certified Management Accountants (CMA), Canada for entering into ‘mutual recognition agreements’.

“The pact we propose to enter into with the IMA has been cleared by the Ministry of Corporate Affairs. The one with the CMA will be finalised by end of March,” he adds. The MoU will pave the way for direct reciprocal arrangement of granting membership.

K. SRIMALI

in Vijayawada

Internal Audit of Stock Brokers

2009-01-30T21:06:00.002-05:00

Training programme for internal audit of stock brokers

Training Programme for Internal Audit of Stock Brokers

Background

Periodical audit is one of the tools to ascertain the level of compliance among stock brokers of the exchanges. The scope of audit should cover the existence, scope and efficiency of the internal control system, compliance with the provisions of the SEBI Act, 1992, Securities Contracts (Regulation) Act, 1956, SEBI (Stock brokers and Sub- brokers) Regulations, 1992, circulars issued by SEBI, agreements, KYC requirements, Bye-Laws of the Exchanges, data security and insurance in respect of the operations of the stock brokers/clearing members.

SEBI has issued circulars asking stock exchanges to direct stockbrokers/trading members/clearing members to carry out complete internal audit on a half yearly basis by chartered accountants, company secretaries or cost and management accountants who are in practice and who do not have any conflict of interest.

The programme

This executive education programme is offered by NISM, in co-ordination with BSE & NSE, for chartered accountants, cost accountants and company secretaries. It aims at helping them carry out effective internal audit of the broker’s books in order to satisfy the requirements of SEBI and the exchanges. The sessions discuss audit procedure and areas that the auditor should examine with references to what books, documents and data are to be checked. Programme faculty has been drawn from SEBI and the two main exchanges. Duration of the programme would be two days.

Offerings

There will be six programmes in Mumbai and two programmes each in Kolkata, New Delhi and Chennai. The dates for the six Mumbai offerings are given below. The dates of the other metro cities are yet to be finalized.

1. January 9&10, 2009 4. January 30&31, 2009
2. January 16&17, 2009 5. February 6&7, 2009
3. January 23&24, 2009 6. February 13&14, 2009

Programme fee

The programme fees would be Rs.2,250/- (for both days; inclusive of service tax) per participant. The programme fee covers courseware, lunch and tea for both days. A participant certificate will be given to all the participants.

Registration

For registration and other details kindly contact:

Cost Audit to services-Extended by CBEC in the finance bill

2007-05-12T23:31:00.000-04:00

Excise audits uptill now applicable to manufacturing unit has been extended to Services under the Service Tax.

To Act As Company Secretary.

2007-04-19T10:21:00.000-04:00

Companies (Appointment and Qualifications of Secretary) Rules, 1988
In exercise of the powers conferred by clauses (a) and (b) of section 642 read with clause
(45) of section 2 and section 383A of the Companies Act, 1956 (1 of 1956), and in
supersession of the Companies (Secretary's Qualifications) Rules, 1975, the Central
Government hereby makes the following Rules, namely :
1. Short title and commencement -
(1) These rules may be called the Companies (Appointment and Qualifications of
Secretary) Rules, 1988.
(2) It shall come into force on the 1st day of December, 1988.
2. Appointment, etc., of whole-time secretary -
(1) Every company having a paid-up share capital of not less than rupees fifty lakhs
shall have a whole-time secretary.
(2) No person shall be appointed as whole-time secretary under sub-rule (1) unless
he is a member of the Institute of Company Secretaries of India constituted under the
Company Secretaries Act, 1980 (56 of 1980).
(3) A company having a paid-up share capital of less than rupees fifty lakhs may
appoint any individual as its whole-time secretary to perform the duties of a
secretary under the Companies Act, 1956, and any other ministerial or administrative
duties :
Provided that no individual shall be eligible to be so appointed unless he possesses one or
more of the qualifications specified in sub-rule (4).
(4) No individual shall be appointed as secretary pursuant to sub-rule (3) unless he
possesses any one or more of the following qualifications, namely :-
(i) membership of the Institute of Company Secretaries of India constituted
under the Company Secretaries Act, 1980 (56 of 1980) ;
(ii) pass in the Intermediate examination conducted either by the Institute of
Company Secretaries of India constituted under the Company Secretaries Act,
1980 (No. 56 of 1980), or by the earlier Institute of Company Secretaries of
India incorporated on 4th October, 1968, under the Companies Act, 1956 (1 of
1956), and licensed under section 25 of that Act ;
(iii) Post-graduate degree in commerce or corporate secretary ship granted by
any university in India ;
(iv) degree in law granted by any university ;
(v) membership of the Institute of Chartered Accountants of India constituted
under the Chartered Accountants Act, 1949 (38 of 1949) ;
(vi) membership of the Institute of Cost and Works Accountants of India
constituted under the Cost and Works Accountants Act, 1959 (23 of 1959) ;
(vii) post-graduate degree or diploma in management sciences, granted by any
university, or the Institutes of Management, Ahmedabad, Calcutta, Bangalore
or Lucknow ;
(viii) post-graduate diploma in company secretary ship granted by the Institute
of Commercial Practice under the Delhi Administration or Diploma in
Corporate Laws and Management granted by the Indian Law Institute, New
Delhi ;
(ix) post-graduate diploma in company law and secretarial practice granted by
the University of Udaipur; or
(x) membership of the Association of Secretaries and Managers, Calcutta,
registered under the West Bengal Registration of Societies Act, 1961 (XXVI of
1961) :
Provided that where the paid-up share capital of such company is increased to rupees
twenty-five lakhs or more, the company shall, within a period of one year from the date
of such increase, comply with the provisions of sub-rules (1) and (2) of rule 2.
Explanation - In this rule, "University" has the meaning assigned to it in the University
Grants Commission Act, 1956 (No. 3 of 1956), and includes any university outside India
which is recognised by the Union Public Service Commission for the purposes of
recruitment to public services and posts in connection with the affairs of the Union or of
any State.
3. Provisions relating to existing secretaries -
Notwithstanding contained in sub-rules (1) and (2) of rule 2, the qualifications
possessed by a person holding the office of whole-time secretary of a company
immediately before 30th October, 1980, in terms of the second proviso to clause (a)
of rule 2 of the Companies (Secretaries Qualifications) Rules, 1975, shall be
deemed to be the qualifications which he shall be required to possess in order to be
eligible to continue as whole-time secretary in that company.

Legal Representatives for Appelate tribunal

2007-03-04T06:42:00.000-05:00

Right to legal representations

22C. The appellant may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any of its officers or present his or its case before the Securities Appellate Tribunal.

Explanation. - For the purposes of this section, -

1. "chartered accountant" means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;
2. "company secretary" means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;
3. "cost accountant" means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;
4. "legal practitioner" means an advocate, vakil or an attorney of any High Court, and includes a pleader in practice.40

Valuation in Banks RBI

2007-03-04T06:28:00.000-05:00

RBI No.2006-2007/224
DBOD.BP.BC No. 50 / 21.04.018/ 2006-07
January 4, 2007
The Chairmen/Chief Executives
All Commercial Banks
(excluding RRBs)
Dear Sir,
Valuation of Properties - Empanelment of Valuers
It has been observed that different banks follow different policies
for valuation of properties and appointment of valuers for the
purpose. The issue of correct and realistic valuation of fixed assets
owned by banks and that accepted by them as collateral for a sizable
portion of their advances portfolio assumes significance in view of
its implications for correct measurement of capital adequacy position
of banks. In this context, there is a need for putting in place a
system/procedure for realistic valuation of fixed assets and also for
empanelment of valuers for the purpose.
2. Banks may be guided by the following aspects while formulating a
policy on valuation of properties and appointment of valuers:
(a) Policy for valuation of properties
i) Banks should have a Board approved policy in place for valuation of
properties including collaterals accepted for their exposures.
ii) The valuation should be done by professionally qualified
independent valuers i.e. the valuer should not have a direct or
indirect interest.
iii) The banks should obtain minimum two Independent Valuation Reports
for properties valued at Rs.50 crore or above.
(b) Revaluation of bankâ€™s own properties
In addition to the above, the banks may keep the following aspects in
view while formulating policy for revaluation of their own properties.
i) The extant guidelines on Capital Adequacy permit banks to include
revaluation reserves at a discount of 55% as a part of Tier II
Capital. In view of this, it is necessary that revaluation reserves
represent true appreciation in the market value of the properties and
banks have in place a comprehensive policy for revaluation of fixed
assets owned by them. Such a policy should interalia cover procedure
for identification of assets for revaluation, maintenance of separate
set of records for such assets, the frequency of revaluation,
depreciation policy for such assets, policy for sale of such revalued
assets etc. The policy should also cover the disclosure required to be
made in the 'Notes on Account' regarding the details of revaluation
such as the original cost of the fixed assets subject to revaluation
and accounting treatment for appreciation / depreciation etc.
ii) As the revaluation should reflect the change in the fair value of
the fixed asset, the frequency of revaluation should be determined
based on the observed volatility in the prices of the assets in the
past. Further, any change in the method of depreciation should reflect
the change in the expected pattern of consumption of the future
economic benefits of the assets. The banks should adhere to these
principles meticulously while changing the frequency of
revaluation/method of depreciation for a particular class of asset and
should make proper disclosures in this regard.
(c) Policy for Empanelment of Independent valuers
i) Banks should have a procedure for empanelment of professional
valuers and maintain a register of 'approved list of valuers'.
ii) Banks may prescribe a minimum qualification for empanelment of
valuers. Different qualifications may be prescribed for different
classes of assets (e.g. land and building, plant and machinery,
agricultural land, etc.). While prescribing the qualification, banks
may take into consideration the qualifications prescribed under
Section 34AB (Rule 8A) of the Wealth Tax Act, 1957.
3. Banks may also be guided by the relevant Accounting Standard issued
by the Institute of Chartered Accountants of India.
Registration of valuers.
34AB. (1) The 32[Chief Commissioner or Director General] shall
maintain a register to be called the Register of Valuers in which
shall be entered the names and addresses of persons registered under
sub-section (2) as valuers.
(2) Any person who possesses the qualifications prescribed33 in this
behalf may apply to the 34[Chief Commissioner or Director General] in
the prescribed form35 for being registered as a valuer under this section:
Provided that different qualifications may be prescribed for valuers
of different classes of assets.
36(3) Every application under sub-section (2) shall be verified in the
prescribed manner, shall be accompanied by such fees as may be
prescribed and shall contain a declaration to the effect that the
applicant will
(i) make an impartial and true valuation of any asset which he may be
required to value;
(ii) furnish a report of such valuation in the prescribed form;
(iii) charge fees at a rate not exceeding the rate or rates prescribed
in this behalf;
(iv) not undertake valuation of any asset in which he has a direct or
indirect interest.
37(4) The report of valuation of any asset by a registered valuer
shall be in the prescribed form and be verified in the prescribed manner.
Qualifications of registered valuers.
8A. (1) For the purposes of sub-section (2) of section 34AB, the
qualifications for registration as valuers of different classes of
asset shall be as specified in sub-rules (2) to (11).
(7) A valuer of stocks, shares, debentures, securities, shares in
partnership firms and of business assets, including goodwill but
excluding those referred to in sub-rules (2) to (6) and (8) to (11),
shall have the following qualifications, namely :
(i) he must be a member of the Institute of Chartered Accountants of
India or the Institute of Cost and Works Accountants of India 62[or
the Institute of Company Secretaries of India]; and
(ii) 63[(A) he must have been in practice as a chartered accountant or
a cost and works accountant or a company secretary for a period of not
less than ten years and his gross receipts from such practice should
not be less than fifty thousand rupees in any three of the five
preceding years, or]
(B) he must be a person formerly employed
(a) in a post under Government as a gazetted officer, or
(b) in a post under any other employer carrying a remuneration of not
less than Rs. 64[2,000] per month,
and, in either case, must have retired or resigned from such
employment after having rendered service for a period of not less than
65[ten] years in the field of audit and accounts or taxation work 66[, or]
66[(c) as a Company Secretary 67[or a Deputy Company Secretary] or an
Assistant Company Secretary in a post carrying a remuneration of not
less than Rs. 68[2,000] per month and must have retired or resigned
from such employment after having rendered service for a period of not
less than 69[ten] years.]

Depositaries act

2007-01-26T21:38:00.000-05:00

23C. Right to legal representation. — The appellant may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate Tribunal.

Explanation. — For the purposes of this section, —

(a) ';chartered accountant'; means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act:

(b) ';company secretary'; means a company secretary as defined in clause (c) os sub-section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(c) ';cost accountant'; means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(d) ';legal practitioner'; means an advocate, vakil or an attorney of any High Court, and includes a pleader in practice.

Securities contracts regulation act

2007-01-26T21:36:00.000-05:00

22C. Right to legal representation. — The appellant may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate Tribunal.

Explanation. — For the purposes of this section, —

(a) ';chartered accountant'; means chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(b) ';company secretary'; means a company secretary as defined in clause (c) of sub-section (10 of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(c) ';cost accountant'; means a cost accountant as defined in clause (b) of subsection (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act;

(d) ';legal practitioner'; means an advocate, vakil or an attorney of any High Court, and includes a pleader in practice.

22D. Limitation. — The provisions of the Limitation Act, 1963 (36 of 1963), shall, as far as may be, apply to an appeal made a to a Securities Appellate Tribunal.

Cost Audit in Global Perspective-Emerging Global economic order and the relevance of Cost records.

2007-01-26T00:46:00.000-05:00

Cost Audit –Here to stay in a Global perspective.
Maintenance of Cost records and Audit of the same has been in India since long and
recognized in the companies act 1956 by an amendment in 1965.The main intention
of the legislature was laying emphasis on controlling cost and setting up an
administrative pricing mechanism to protect the interest of the society.
Its emphasis is manifold unlike maintenance of financial records and its audit year on
year basis. While financial accountants addresses the needs of owner partially they
seldom address the interests of the society at large. In this context Maintenance of cost
records through a compliance mechanism has to travel a longway since the same is not
yet compulsory across board among companies(exemption to small scale sector)across
sectors(services and agriculture still to take up)Regularity(audit depends on order from
CAB even when Cost records maintenance is made compulsory)Accounts not certified by
qualified cost accountant(where Audit is not ordered ).
In the above back drop let us discuss few lines about the hype created in the Industry
circle about abolition of cost audit in global perspective.
First of all one must understand that maintenance of records reflecting cost of production
and services is the primary need for any business and in the global scenario it is all the
more vital .Unlike formatted financial accounts, which lay emphasis on recording of
transaction in a double entry mode, Cost accounts concentrate on business process
through a planning mechanism(budget) setting up of standards for physical and financial
incurrence(thus an inclusive mechanism of financial and non-financial measure) and
records transaction in a double entry mode to reflect a true and fair view for business
sustenance and growth.Its vision covers the interests of all internal and external
stakeholder and thus all encompassing.
Cost accounting is, State of Economy-Neutral, in the sense it does not simply focus on
recording transactions to claim such a neutrality while it addresses issues of economic
prosperity, its sustenance, through resource planning and overall growth
perspective(through enabling business process re-engineering) in the global arena.
Be it Capitalist Mode where Money is driving growth{(Optimising the yield from
investment is primary concern through internal(Process efficiency ) and
external(Delivery end-to-end and Income maximization) re-engineering)}.Be it Socialist
which lay emphasis on Planning process for resource allocation and egalitarian approach
to push a sustainable growth forward.
It is sector neutral since there is a longstanding and a reliable relation between money and
its exchange(Goods and services) and Cost is relational parameter for measuring value to
a business.
It impacts business cycle and prolongs the process, if not , completely plug the process
of concentration of economic power by checking the system and allowing efficient
process to flow thereby protecting the stakeholders from vagaries of business cycle.
It is something related to good governance and fair practices in “business and
governance of the economy “and can be defined for all the socio-economic setup and is a
very dynamic tool for measuring growth and efficiency.
The relevance of the stakeholders is better addressed in a liberalized and global setup
than a controlled setup and the relevance of cost accounting in the emerging world order
can only be better emphasized by looking into the global consumer and business
perspective. Infact the global scenario has complicated the economics of scale and
resource consumption specially, the speed of delivery, that we need to fall back on cost
accounting as addressing the whole range of issues that are the expectation of community
of nations.
Cost accounting is” Forms of business” neutral in that it addresses the core issues of
Value engineering for recording of transaction and has the business perspective, rather
than simply counting numbers it grows numbers and directs a sustainable growth in the
economy.
In the light of what has been stated above it is highly relevant and utmost imperative to
infuse the culture of recording transaction in the cost accounting mode transcending
business territories , economic model adopted by the state and the forms of business and
also in the governance of the economy.
In this context Indian economy had made a good beginning way back in 1965 and if the
realization of social-cost benefit is percolated down the line and addresses individual
citizens perspective in the society that is well geared in a political setup where
individual citizen has the right of choice to elect the representative to govern the society
and the resources, which is of common concern ,and the business model and any
economic activity is, that of exploitation of resources owned in equal measure of right
and opportunity by every citizen of India, then the agency factor comes alive for any
exploitors who come to the forefront of such activity and hence they are liable not only to
their business interest but also to the community interest and in that Cost accounting is a
potent tool of measurement. The object of competition and free movement of goods and
services is to plug inefficiency in global perspective and improve efficient delivery model
and these can seldom be addressed by financial statements of Profit and loss account
and balance sheet.
Having discussed at length of the requirement of cost accounting in the global economic
scenario we will now deal with what can be the way ahead from the stakeholders
perspective. These are recommendations to march ahead.
1.IFAC a world body of accountants which has yet far concentrated on the management
accounting issues should be geared with the might of Management accounting bodies to
come up with Statements of management accounting practice that is “economy, sector
and business forms neutral” which addresses the triple bottom line issues in global
perspective.
2.ICWAI in its interest and in the interest of stakeholders at large become proactive in
the delivery model (end to end) to percolate cost consciousness and other management
accounting related issues. It should come with policy guidelines that will push forward
reforms in accounting practices in the Indian context. It should also ensure quality man
power is made available in five years from now positioning the management accounting
model where the demand could be anywhere between 500000 to 1000000.
3.The GOI should become proactive and also come with a policy paper on the Inclusive
accounting aspect(financial and management accounting) addressing socio-economic
model of sustainable growth. It should re-position the role of Management accountant
as a Public accountants on par with Chartered accountants in all spheres of economic
activity and encourage them to participate in the process of maintenance of accounts and
audit in all forms of business and in government specially Taxation and budgeting
aspect.It should also shift away from the belief that ICAI is be all and end all of
Accounting and auditing profession.
4.Various economic legislation should define the role of Management accountant
clearly addressing the needs of our society.
Specific issues that needs to be re looked and amendments sought are:
1.Companies act should make a provision for Compulsory maintenance of cost records
for all businesses registered with it and allow audit on par with Statutory financial audit.
The cost auditor should submit its report to the Board and where after a gist can be
presented before the AGM.
2.All other forms of business where specific legislation is available should have
compulsory maintenance of cost records as a mandatory provision.
3.TAX departments should extensively use the services of Cost and Management
accountants in the process of collection of tax revenue.A process of auditing cost records
should be in place to ascertain exact cost of transaction and true determination of Income.
4.Government should recognize the true potential of Cost and management accountants
and employ them under ICAS or in consultancy assignments as an expert in social-cost
benefit analysis. The services should also be utilized in various regulatory frame work
that is coming up in administrative ministries for determination of fair price and
efficiency parameters.
CMA.R.Veeraraghavan

TRAI-Account separation and the role of cost and management accountant

2007-01-26T00:40:00.000-05:00

4. Reports - (1) Based on the information available in the books of accounts and
other documents specified in the Rules and the order/notification issued there
under, service provider shall prepare geographical area-wise following financial
and non-financial reports: -
Financial Reports
Profit and Loss Statements
(i) Profit and loss statement of the products mentioned in column (4)
against services rendered by the service providers specified in column
(2) of the Schedule I. The statement shall be prepared in the Proforma
“A” of Schedule III;
(ii) Separate Profit and Loss statement for each of the service rendered by
the service provider and specified in regulation 1(2). The statement
shall be prepared in the Proforma “B” of Schedule III;
Page 5
Product Cost Statement
(iii) Product wise Cost Sheet in the Proforma “C” of Schedule III;
Network Element Cost Statements
(iv) Network Element wise Cost Sheet shall be prepared which clearly
indicates cost and its allocation to various products. An indicative list
of Network elements of services for which these cost sheets shall be
prepared is at Schedule II. However, the list of network elements shall
depend on network architecture used by the service provider. The
Network Element Cost Statements shall be prepared in the Proforma
“D” of Schedule III;
(v) A summary sheet showing network element wise total cost, cost driver
and cost per unit of usage. The statement shall be prepared in Proforma
“E” of Schedule III;
(vi) A summary sheet indicating network element wise cost allocated to
various products. The statement shall be prepared in Proforma “F” of
Schedule III;
Capital Employed Statements
(vii) Capital Employed Statement for each of the service rendered by the
service provider and specified in regulation 1(2). The statement shall
be prepared in Proforma “G” of Schedule III;
(viii) A statement showing allocation of capital employed for a service to the
network elements. The statement shall be prepared in Proforma “H” of
Schedule III;
Fixed Asset Statement
(ix) Statement showing category wise fixed assets and depreciation in the
Proforma “I” of Schedule III’; and
Non-Financial Report
(x) A statement of operational data relating to network architecture,
network usage, network capacity, product, services volumes, tariffs,
etc. Reports for services mentioned in Regulation 1(2) shall be
prepared in Proformae “L” to “T” of Schedule III.
(2) The service providers shall prepare Reports mentioned in Regulation 4 (1) every
year on the basis of historical cost accounting and every second year on the basis
of replacement cost accounting:
Provided that if less than three years have elapsed since issue of the license to
provide a particular service, the financial statements based on Replacement Cost
Accounting may not be prepared for that service.
Page 6
(3) The profit and loss statement and capital employed statement mentioned under
Regulation 4(1) of this regulation prepared on the basis of the Historical cost
Accounting shall be reconciled with the Annual Financial Statement of the
service provider prepared under Section 211 of the Companies Act, 1956. The
reconciliation statements shall be prepared in Proformae J and K of Schedule III.
(4) The service providers shall prepare financial reports mentioned in regulation
4(1) on the basis of replacement cost accounting, by-
(i) following financial capital maintenance methodology;
(ii) limiting cost adjustment to the fixed assets;
(iii) ignoring replacement cost adjustment for assets having life of less
than 3 years;
(iv) taking cost of modern equivalent asset when existing asset is not
available due to change in technology. Whenever, old asset is
replaced by modern equivalent asset, change in operational
expenditure as a result of such replacement shall also be accounted
for; and
(v) clearly indicating holding gain or loss, supplementary depreciation
and change in the operational cost due to replacement of old asset by
modern equivalent asset.
5. Periodicity of submission of report � (1) The service providers
shall submit
audited reports based on the historical cost accounting every year
within six
months of the end of accounting year to the Authority.
(2) The service provider shall also submit reports based on the
replacement cost
accounting every second year within six months of the end of
accounting year to
the Authority.
(3) The reporting period shall be same as followed by the company for
preparation
of the annual financial accounts under sub section (4) of section 210
of the
Companies Act, 1956.
Provided that, if reporting period exceeds fifteen calendar months,
the accounting
separation statements shall be divided into 12 months and the balance
period.
6. Audit - (1) Every service provider, to which these regulations
apply, shall appoint
an auditor who is qualified for appointment as an auditor under
section 224 or
233-B of The Companies Act, 1956.
(2) The auditor shall audit the reports so prepared.
(3) The auditor in his report shall express an opinion as to whether
the reports
have been properly drawn in accordance with the regulation and he has
received
all information and explanation necessary for the purpose of audit.
7. Confidentiality - The Authority shall ensure the confidentiality of
the financial
information submitted under various provisions of the Regulation.
Page 7
Provided that, where the Authority is of the opinion that it is
necessary or
expedient to disclose the information in public interest, it may, for
reasons to be
recorded in writing, do so.
Provided further that no information shall be disclosed by the
Authority, except
after giving the company an opportunity of making such representation
in writing,
as it may wish to make in that behalf and taking such representation into
consideration.

National Tax Tribunal Act 2005 and Cost Accountant?

2006-10-26T11:03:00.000-04:00

13. Appearance before National Tax Tribunal.—(1) A party to an appeal other than Government
may either appear in person or authorise one or more chartered accountants or legal practitioners
or any person duly authorised by him or it to present his or its case before the National Tax
Tribunal.
) The Government may authorise one or more legal practitioners or any of its officers to present its case before the National Tax Tribunal.

Cost Audit -A paradigm view.

2006-10-12T12:06:00.000-04:00

Re: Cost Audit Again in News-Business Line.

--- In CMA_India@yahoogroups.com, "CMA.R.Veeraraghavan" wrote:
>
>

Sir

This has reference to the Article in the opinion section of your daily on 12-10-2006 "Should we bid adieu to cost audit?".by A.R.Ramanathan.

In addition to what the esteemed author has stated- for the government and the industry to re-orient its outlook towards the exercise, I would like to add the following which may kindly be Published.

While questioning the requirement of Cost audit time and again one must analyse in totality why Cost audit is required and for that, one must know the deficiency and focus of related audit systems that have been statutorily sanctified ,specially the Financial Audit:

The focus of financial audit is scrutiny of financial records(Income and expenses)to ascertain and repose faith in the profits projected, Value of assets and liability in a given period, Propriety of the transaction of income and outgo. Simply this is the essence of scrutiny of financial records. Its focus is Shareholders of the company who are supposedly wealth creators of the business.

Financial records fail miserably in speaking out about the internal strength, efficiency, and sustenance aspect of the business ,which a seasoned businessman is interested. Financial records do not also reflect the wealth creation for the society at large(no macro economic outlook).

It doesn't question price-output-cost relation as well, it doesn't also address the competitors strategy and our strength. In essence it is simply a documentation of inflow-outflow data and projection of residue as gain available for distribution.

Financial audit is shortsighted in its approach and Blind towards societal interest.

The focus of Cost-audit is stake-holders at large (every citizen of India is a stakeholder in the economic activity of the country) Cost records basically reflect Cost incurred in the activity and the drivers that enable such incurrence and thus warn the business to moderate the drivers in advance. It speaks amply about utilisation of resources which is vital for managing an economy. It discloses the reasonability or otherwise of the pricing module which is important to bringing an exploitation free society.

Cost records scrutiny is vital for business sustenance as well ,when we talk of demutualisation of management and owners. Management perspective is sustenance and efficiency and these two are amply addressed by cost records, through its methods and techniques which are prescriptive(Like budgeting, standard costing ,variable costing, pricing methods like target pricing etc.)

Do owner-investor benefit from this exercise, yes in the long run an investor is unconcerned with immediate gains but the vision of business to sustain and its data projecting bottomline efficiency is utmost important for a owner-investor,

While a government benefit from the cost data for planning,resource monitoring,Price controls and comparative industry study with authentic cost data.The tax department benefits from the hard work of Cost accountants both inrespect of Direct tax(where the basis is to judge from allowances and disallowances and mapping with cost to business activity)and indirect taxes(where Cost of goods and services is vital).

It is thus unfortunate to see cost audit often being projected in negative perspective by one and all and in a democracy the conflict of interest in sharing such data is just in the maxim"what is good for all is many a times not good for a few who rule". which sans the basic framework of the constitution"Of the people, by the people and for the people".

Improving reporting methodology, switching from becoming just a prescriptive exercise to a value-added and dynamic tool can trigger focus on cost audit. Audit itself is an art of handling data to produce decision tools and cost auditor should now-on be proactive and prove value addition to the management. Cost audit in India is there to stay for long and i am confident about it and the world can learn from us in this regard.

Thanx

CMA.R.Veeraraghavan

EXIM Policy and Practising Cost accountants

2006-10-08T12:02:00.000-04:00

Click on the heading above to go places.
AAYAAT- NIRYAAT FORM
HANDBOOK OF PROCEDURES VOLUME 1, 2004-09
as amended upto 8 th April 2005
GUIDELINES FOR APPLICANTS
1. Two copies of the application must be submitted unless otherwise mentioned.
2. Each individual page of the application has to be signed by the applicant.
3. a. Part 1 & Part 4 has to be filled in by all applicants. In case of applications submitted
electronically, no hard copies of Part 1 may be submitted. However in cases where
applications are submitted otherwise, hard copy of Part 1 has to be submitted.
b. Only relevant portions of Part 2 & Part 3 need to be filled in.
4. Application must be accompanied by documents as per details given below:
I. For Importer Exporter Code Number (IEC)
1. Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application
fee in terms of Appendix 21B.
2. Certificate from the Banker of the applicant firm in the format given in Appendix 18A.
3. Self certified copy of Permanent Account Number (PAN) issued by Income Tax
Authorities.
4. Self certified copy of RBI approval in cases where non resident interest/holding in the
firm/company exists with repatriation benefits.
II. For Import Licence for Restricted Items
1. Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of
application fee in terms of Appendix 21B.
2. Self certified copy of Proforma Invoice from foreign supplier showing CIF value of the
goods.
3. Self certified copy of Registration Certificate issued by concerned authority.
4. Self certified copy of the recommendation letter by the concerned authority.
5. In case of import of gift, Donor's letter in Original.
6. In case of import of Ammunition, a certificate from the Chartered Accountant/Cost and
Works Accountant/Company Secretary showing sales turnover of ammunition
(indigenous and imported) during the preceding three licensing years.
II A. For Import Certificate under Indo – US Memorandum
1. Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application
fee in terms of Appendix 21B.
2. Self certified copy of letter from US supplier in support of request for Import Certificate.
III. For Export Licence for Restricted Items
1. Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application
fee in terms of Appendix 21B.
2. Self certified copy of Export Order.
III A. For Export Licence for SCOMET Items
1. Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application
fee in terms of Appendix 21B.
2. For Export of Special Chemicals in Categories 1B a nd 1C of Schedule 2 Appendix
3 of ITC (HS) Classification of Export & Import items:
a. Self certified copy of Export Order.
b. End User certificate indicating the end product for which the item of export will be
used by end user in the format given in Appendix 3 6.
3. For Export of all other category items of Schedule 2 Appendix 3 of ITC (HS)
Classification of Export & Import items except those given in serial no 2 above :
a. Self certified copy of Export Order.
b. End User certificate indicating the end product and/or end purpose for which the item
of export will be used by end user in the format given in Appendix 36.
c. Technical Specifications of the items to be exported (not exceeding one page for
each item).
d. Self certified copy of Bill of Lading for items exported earlier under a Licence as per
serial no. 3 of Part B of sub section III A.
IV. For Star Export House Certification
1. Self certified copy of valid RCMC.
2. Statement of exports made in the preceding three licensing years and/or current
licensing year duly certified by a Chartered Accountant/Cost and Works Accountant in
the format given in Appendix 26.
3. Self certified copy of the Balance Sheet filed with Income Tax Authorities for the relevant
year(s).
V. For Advance Licence applications
1. Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application
fee in terms of Appendix 21B.
2. Additional documents required in case of issue of Advance Licence for Annual
Requirements:
a. Statement of exports made in the preceding licensing year duly certified by a
Chartered Accountant/Cost and Works Accountant in the format given in Appendix
26.
b. Self certified copy of the manufacturing licence of the applicant firm or his supporting
manufacturer.
3. Additional documents required in case of issue of DFRC:
a. In case of physical exports
i. EP copy of the Shipping Bill or Bill of Export (only in case of exports through
notified land Customs under paragraph 4.19)
ii. Bank Certificate of Exports and Realisation as given in Appendix 22A or
Foreign Inward Remittance Certificate (FIRC) in the case of direct negotiation of
documents or Appendix 22D in the case of offsetting of export proceeds with
approval of RBI. In case of FIRC, a declaration from the exporter that the
remittance is in respect of Shipping Bill(s) No ____________ dtd _________
shall also be furnished.
iii. Statement of exports/supplies giving separately each Shipping Bill number/Bill of
export number and date, FOB/ FOR value in Indian rupees as per Shipping Bill/
Bill of export and description of the resultant product.
b. In case of deemed exports
i. Copy of the invoice duly signed by the unit receiving the material and their
jurisdictional excise authorities certifying the item of supply, its quantity, value
and date of such supply. However incase of supply of items, which are nonexcisable
product(s), a project authority certificate (PAC) certifying quantity,
value and date of such supply would be acceptable in lieu of excise certification.
Not withstanding the above, in respect of supplies to EOU, a copy of ARE-3 duly
signed by the jurisdictional excise authorities certifying the item of supply, its
quantity, value and date of such supply shall be furnished.
ii. Payment certificates from the project authority as per Appendix-22C or
payment certificate or bank certificate of payment for domestic supplies as per
Appendix 22B which ever is applicable.
iii. Statement of supplies giving separately each supply invoice number and date,
FOR value in Indian rupees as per invoice and description of th e resultant
product.
4. In cases where import of fuel has been sought for the grant of Advance Licence/
Advance Licence for Annual Requirements/ DFRC (excluding Advance licence
applications for ad-hoc norms and those under Para 4.7 of Handbook)
a. Self certified copy of the permission issued to the manufacturer exporter by the
competent authority (concerned State Electricity Board or Power Corporation or
Regulatory Commission of the State) under Section 44 of the Electricity (Supply) Act,
1948 for the installation of captive power plant based on the specified fuel unless the
permission is specifically waived by the State Electricity Board; and
b. Self certified copy of the letter intimating the date of commissioning of the captive
power plant from the concerned authority which issued the permission letter is to be
submitted.
Note: The import of only such fuel(s) shall be allowed which have/ has been specified in
the said permission.
5. Additional documents required in case of supplies under deemed
export/intermediate supplies under Advance Licence Scheme:
a. Invalidation letter in case of supplies to
i. an EPCG licence holder;
ii. an Advance Licence holder;
b. Project Authority certificate in case of supplies other than (a) (i) & (ii) above and to
EOU/ EHTP/ STP/BTP units;
6. Additional documents required in case of issue of Advance Licence under Para
4.7 of Handbook
a. Information as per Appendix-11A.
b. 1. Technical Details of the export product as per the details given in Appendix 33
2. Chartered Engineer certificate certifying the import requirements of raw materials
in the format given in Appendix 32B
3. Production and Consumption data of the manufacturer/supporting manufacturer
of the preceding three licensing years, duly certified by the Chartered accountant/
Cost & Works Accountant/ Jurisdictional Excise Authority.
V A. For GEM REP applications
1. Bank Receipt (in duplicate)/Demand Draft evidencing payment of application fee in
terms of Appendix 21B.
2. Bank certificate of export and realisation in the format given in Appendix 22A evidencing
realisation of exports proceeds/sales proceeds.
3. Export Promotion (EP) copy of Shipping Bill(s) in Original. (Photocopy of the EP copy of
Shipping Bill duly endorsed may be returned for utilization/re-import purposes when the
exports are made on consignment basis).
4. Customs attested invoice.
5. In case of application for Replenishment licence under paragraph 4A.28 of this
Handbook, an applicant will be required to submit documents as given at S.No.1 above
and Statement of Exports made during the preceding licensing year duly certified by
Chartered Accountant/Cost & Works Accountant in the format given in Appendix 26.
V B. For Diamond Imprest applications
1. Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application
fee in terms of Appendix 21B.
2. Self certified copy of valid RCMC.
3. Self certified copy of Export Order.
4. Statement of exports of cut and polished diamonds made during the preceding three
licensing years duly certified by Chartered Accountant/Cost & Works Accountant in the
format given in Appendix 26. The value of exports made towards fulfillment of export
obligation under Diamond Imprest Licence shall be shown separately.
V C. For DEPB applications
1. Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application
fee in terms of Appendix 21B.
2. Export Promotion (EP) copy of Shipping Bill(s). In case of exports through notified land
Customs under paragraph 4.40, Bill of Export may be accepted in lieu of Shipping Bill.
3. Bank Certificate of Exports and Realisation as given in Appendix 22A or Foreign Inward
Remittance Certificate (FIRC) in the case of direct negotiation of documents or Appendix
22 D in the case of offsetting of export proceeds with the approval of RBI. In case of
FIRC, a declaration from the exporter that the remittance is in respect of Shipping Bill(s)
No ____________ dtd _________ shall also be furnished
VI. For EPCG Licence applications
1. Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application
fee in terms of Appendix 21B.
2. Self certified copy of Drug Manufacturing License in case of export of Pharmaceutical
product or self certified copy of IEM/SSI Registration Number in case of other products
or a self certified copy of Service Tax Registration in case of Service Providers.
3. Certificate from a Chartered Engineer in the format given in Appendix 32A certifying:
a. the end use/nexus of machinery sought for import under EPCG Scheme in the pre
production/production/post production activity of the exported goods/services
(explaining the end use of machinery in detail); and/or
b. the essentiality of spare parts sought for import and its required quantity for existing
machinery manufacturing the goods to be exported/ machinery sought for import;
and/or
c. complete usage of equipments/goods sought for import under the EPCG Scheme for
supply of service to overseas customers/ service consumers of any other country in
India to earn free foreign exchange/supply of service in India relating to export paid
in free foreign exchange.
4. Statement of exports made/services rendered by the applicant firm in respect of the
same/similar export product/services rendered during the preceding three licensing
years duly certified by a Chartered Accountant/Cost and Works Accountant in the format
given in Appendix 26.
5.

The broader sketch of areas in which u can find cost accountants are engaged.

2006-08-29T22:07:00.000-04:00

This should primarily contain each practising members area ofoperations classified as One major area and other area based onrevenue generation or clientele.This would focus the institute on marketing services of CostAccountants.The PCAs need not be asked to divulge clientele or revenueinformation but simply a self declaration as to the activities.The areas under coverage should be broadly:
1.Maintenance of Books accounts(Including Cost accounts wherenecessary).
2.Engaged in Establishment and design(customisation)of Accounts(Financial as well as Cost accounts).
3.Internal Audit(Including design and certification).
4.Rendering Accounting services for non-corporates.
5.Engaged in Consultancy services relating to various Tax laws forbusiness.
6.Acting as Authorised representatives under the provisions ofvarious laws(Taxation and others)
7.Rendering Management Consultancy.
8.Engaged In Statutory Cost Audit.
9.Engaged in Attest Functions under VAT and Central Excise andCustoms Acts.
10.Engaged in rendering Financial services(Brokering,Portfoliomanagement.
Any Other Services if that is what the Practising CA is engaged in.
This would finally help in pooling resources of expertise to pass onto the next breed of Cost accountants in the make.I think council members will make this concscious decision soonerthan later.
In addition they can be engaged as consultants in Project management ,Specific assignments from Governments etc

Cost Accountants to establish Professional accounting firms to help business maintain accounts in complinace with various laws.

2006-08-26T06:56:00.000-04:00

Accounting services as distinct from audit and attest services are well developed in many countries.As a Professional Accountant A cost accountant in practice can help business establish a well knit accounting mechanism.Establish internal controls and perform internal audit.
Accounting function is largely inhouse in organised business in india but sooner than later this function will be a outsourced function with comparative cost-benefit.Practising Cost Accountants should sharpen their edges to deliver the business the value addition needed with respect to various compliances.
In addition Cost Accounting system whereever prescribed are to be guided by a cost accountant for the industry and business houses to comply with.
Many business entity that have been prescribed to maintain cost accounts find it difficult to comply for want of trained Cost accountants.The role of cost accountants multiplies here.Infact if the practising cost accountants keep track of this many companies will start complying with the provisions.
The gist of applicability is mentioned below:
Books of account to be kept by company:

209(1) Every Company shall keep at its registered office proper books of account with respect to -
(a) ......
(b) ......
(c) .....
(d) in the case of a company pertaining to any class of companies engaged in production, processing, manufacturing or mining activities, such particulars relating to utilisation of material or labour or to other items of cost as may be prescribed, if such class of companies is required by the Central Government to include such particulars in the books of account:

Provided that all or any of the books of account aforesaid may be kept at such other place in India as the Board of directors may decide and when the Board of directors so decides, the company shall, within seven days of the decision, file with the Registrar a notice in writing giving the full address of that other place.

In exercise of the powers conferred by sub section (1) of section 642 read with clause (d) of sub
section 209 of the Companies Act, 1956, (1 of 1956), the Central Government hereby makes the following rules,
namely:-
1. Short Title and Commencement:-
(1) These rules may be called the cost Accounting Record []* Rules, 1967.
(2) They shall come in to force on the 1st day of October 1967.
2. Application:- They shall apply to every company engaged in the production or manufacturer of []* excepting
those companies falling under the category of small scale industrial units.
Explanation - For the purpose of this rule, the expression "small scale industrial undertaking" means a
company -
(a) [the aggregate value of the machinery and plant installed wherein does not exceed The limit as
specified for a small scale industries (Development and regulation ) Act.1951 (65 of 1951), as on the last date of
the preceding financial year and]1
(b) [the aggregate value of the realization made by the company from the sale or supply of all its products
during the preceding financial year does not exceed ten crore rupees.]2
3. Maintenances of Records:-
(1) Every Company to which there rules apply shall in respect of easy of its accounting years commencing
on or after the 1st day of October, 1967,[till the 31st day of March,2000]3 keep proper books of account
containing inter alia particulars specification in I and II annexed to these rules relation to utilization of material,
labour and other items of cost so far as they are applicable to it.
(2) The book of account aforesaid shall be kept in such a way as to make it possible to calculate the cost of
production of ----produced during the financial year of the Company (hereinafter referred to
the relevant period) from the particulars entered therein.
[(3) Every company to which these rules apply shall, in respect of each of its financial year commencing
on or after the 1st day of April, 2000 keep proper books of account containing, inter alia, the particulars
specified in Schedule III and Proforma mentioned in the said Schedule annexed to these rules relating to the
utilization of materials, labour and other items of cost in so far as they are applicable to cycles and components
thereof.
Provided that if the said company is manufacturing any other product or is engaged in other activities in addition
to manufacture of cycles and components thereof, the particulars relating to utilization of materials, labour and
other items of cost in so far as they are applicable to such other products or activities shall not be included in the
cost of cycles and components thereof.
(4) The books of accounts referred to in sub-rules(3) shall be kept on a regular basis in such a manner as
to make it possible to calculate the cost of production and cost of sales of all makes of cycles and components
thereof for every financial year from the particulars entered therein and every such books of account and the
proforma specified in Schedule III annexed to these rules shall be completed not later than ninety days from the
closing of the financial year of the company to which they relate.
(5) Statistical and other records shall be maintained in accordance with the provisions of the Schedule III
annexed to these rules, which shall be such as to enable the company to exercise as far as possible, control over
the various operations and costs with a view to achieve optimum economies in cost and provide the necessary
data required by the Cost Auditor to suitably report on all the points referred to in Cost Audit (Reports)
Rules,1996.
(6) It shall be the duty of every person, referred to in sub-section(6) and sub-section(7) of section 209 of
the Companies Act 1956 (1 of 1956), to take all reasonable steps to secure compliance by the company with the
provisions of sub-rules (1), (2), (3), (4) and (5) of this rule in the same manner as he is liable to maintain
accounts required under sub-section(1) of section 209 of the said Act".]4
4. Penalty:- If a company contravent the provision of rule 3, the company and every officer of the company
who is in default [including the person referred to]5 in sub-section (6 of section 209 of the Company Act 1956 (1
of 1956) shall be punishable with fine which may extend to five hundred rupee and where the contravention is a
continuing one, with a further fine which may extend to fifty rupees for every day after the first during which
such contravention continue.

Valuer under wealth tax act

2006-08-22T11:48:00.000-04:00

(7) A valuer of stocks, shares, debentures, securities, shares in partnership firms and of business assets, including goodwill but excluding those referred to in sub-rules (2) to (6) and (8) to (11), shall have the following qualifications, namely :
(i) he must be a member of the Institute of Chartered Accountants of India or the Institute of Cost and Works Accountants of India 62[or the Institute of Company Secretaries of India]; and
[(A) he must have been in practice as a chartered accountant or a cost and works accountant or a company secretary for a period of not less than ten years and his gross receipts from such practice should not be less than fifty thousand rupees in any three of the five preceding years, or]
(B) he must be a person formerly employed
(a) in a post under Government as a gazetted officer, or
(b) in a post under any other employer carrying a remuneration of not less than Rs. 64[2,000] per month,
and, in either case, must have retired or resigned from such employment after having rendered service for a period of not less than 65[ten] years in the field of audit and accounts or taxation work 66[, or]
66[(c) as a Company Secretary 67[or a Deputy Company Secretary] or an Assistant Company Secretary in a post carrying a remuneration of not less than Rs. 68[2,000] per month and must have retired or resigned from such employment after having rendered service for a period of not less than 69[ten] years.]

Cost Accountant and Competition Act

2006-08-20T00:29:00.000-04:00

Section 2(g) of the rules of the competition rules and section 35 of the competition act enables a cost accountant in practice as a counsel on behalf of the client to represent before the commission.

Appearance before Commission
35. A complainant or defendant or the Director General may either appear in person or authorise one or
more chartered accountants or company secretaries or cost accountants or legal practitioners or any of
his or its officers to present his or its case before the Commission.
Explanation.—For the purposes of this section,—
(a) "chartered accountant" means a chartered accountant as defined in clause (b) of sub-section (1)
of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a
certificate of practice under sub-section (1) of section 6 of that Act;
(b) "company secretary" means a company secretary as defined in clause (c) of sub-section (1) of
section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate
of practice under sub-section (1) of section 6 of that Act;
(c) "cost accountant" means a cost accountant as defined in clause (b) of sub-section (1) of section 2
of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate of
practice under sub-section (1) of section 6 of that Act;
(d) "legal practitioner" means an advocate, vakil or an attorney of any High Court, and includes a
pleader in practice.

1
I
2. Definitions –
(1) In these Regulations, unless the context otherwise requires:
(a) "Act" means the Competition Act, 2002 (12 of 2003);
(b) "Bench" means Bench constituted under Section 22 of the
Act and includes the Principal Bench, Additional Bench,
Mergers Bench and Special Bench. Special Bench means
larger Bench constituted under sub-section (4) of Section 23
of the Act.
(c) "Chairperson" means the Chairperson appointed under
Section 8 and includes the senior-most Member acting as
Chairperson under sub-sections (4) of Section 10 and the
senior most Member discharging the functions of the
Chairperson under sub-section (5) of Section 10 of the Act;
(d) "Commission" means the Competition Commission of India
established under Section 7 of the Act;
(e) "Complaint" means and includes complaint or reference falling
under Section 19 of the Act;
(f) "Complainant" means a person who or the Central
Government or a State Government or a Statutory Authority
which makes complaint to the Commission.
(g) "Counsel" means and includes a legal practitioner, a
chartered accountant, a company secretary, a cost
accountant as defined in Explanation to Section 35 of the
Act;

Cost Accountants Role in Certifying adequacy of Internal Audit

2006-06-25T20:56:00.000-04:00

New Delhi, the 27th December, 2001
G.S.R. 924(E).- In exercise of the powers conferred by sub-section (4) of section 233B, read with subsection
(1) of section 227 and clause (b) of sub-section (1) of section 642, of the Companies Act, 1956 (1 of 1956),
and in supersession of the Cost Audit (Report) Rules, 1996, except as respect things done or omitted to be done,before such supersession, the Central Government hereby makes the following rules, namely
:-
FORM OF THE COST AUDIT REPORT
[See rule 2(c) and rule 4]
FORM OF THE COST AUDIT REPORT
[See rule 2(c) and rule 4]

3. Based on my/our examination of the records of the company subject to aforesaid qualifications, if any,
I/We give my/our observations and suggestions on the following -
(a) the adequacy or otherwise of the cost accounting system including inventory valuation in vogue in the
company and suggestions for the improvement thereof. The Cost auditor shall also indicate the persistent
deficiencies in the system, pointed out in earlier reports but not rectified;
(b) the adequacy or otherwise of the budgetary control system, if any, in vogue in the company;
(c) matters which appear to him to be clearly wrong in principle or apparently unjustifiable;
(d) cases, where price charged for related party transactions as defined in the respective Cost Accounting
Records Rules is different from normal price, impact of such lower/higher price on margin of the product
under reference shall be specified;
(e) areas where the company is incurring losses or where there is considerable decline in profitability, the cost
auditor should comment on the reasons thereof including indicative break-even point. The cost auditor
shall also comment on the default, if any on the payments due to the Government, financial institutions and
banks, penal interest levied thereon and its impact on the cost of sales and profitability;
(f) steps required to strengthen the company under the competitive environment especially with regard to need
for protection from cheaper imports, if any;
(g) export commitments of the company vis-à-vis actual exports for the year under review. Also comment on
comparative profitability and pricing policy of the company for domestic and export sales. Give impact of
exports benefits/ incentives offered by the Government on export profitability;
(h) the scope and performance of internal audit of cost records, if any, and comment on its adequacy or
otherwise.
4. The Cost Auditor shall suggest measures for making further improvements in the performance in respect of
cost control and cost reduction.
5. The Cost Auditor may also give his other observations and suggestions, if any, relevant to the cost
audit.

Audit of accounts of cooperative society act-multi state cooperative act

2006-06-25T06:33:00.000-04:00

CHAPTER IIIAUDIT AND ACCOUNTS
16. Books of accounts-
Every multi-State cooperative society shall keep books of account with respect to :-
(a) all sums of money received and expended and the matters in respect of which the receipt and expenditure take place;
(b) all sales and purchase of goods;
(c) the assets and liabilities;
(d) in the case of a multi-State cooperative society engaged in production, processing and manufacturing, particulars relating to utilisation of materials or labour or other items of costs as may be specified by the Central Registrar.
17. Subject matter of audit-
(1) The audit of a multi-State cooperative society under sub-section(1) of section 67 shall include, in addition to the matters specified in sub-section(2) of that section the following particulars:
(a) Whether the auditor has obtained all the information and explanations which, to the best of his knowledge and belief are necessary for the purposes of his audit;
(b) whether in his opinion proper books of accounts as specified in these rules and bye-laws have been kept by the multi-State cooperative society so far as it appears from the examination of those books and proper returns adequate for the purposes of his audit have been received from the branches not visited by him;
(c) Whether the balance-sheet and profit & loss account exhibit a true & fair view of the state of affairs of the multi-State Cooperative society according to best of his information and explanation given to him and as shown by the books of the multi-State cooperative society; and
(d) Whether there has been any material impropriety or irregularity in the expenditure or in the realisation of money due to the multi-State cooperative society.
(2) Where in any of the matters referred to in sub-rule (1) the answer is in the negative or in the affirmative with any remark, the auditor shall give reasons for such answer with facts and figures in support of such remarks.
(3) The audit report shall also contain schedules with particulars of:-
(a) all transactions which appear to be contrary to the provisions of the Act, the rules or the bye-laws of the multi-State cooperative society;
(b) Any money belonging to the multi-State cooperative society which appears to the auditor to be bad or doubtful of recovery;
(c) The loans given by the multi-State cooperative society to the members of the board; and
(d) any other matter as may be specified by the Central Registrar in this regard.
(4) The auditor shall make his report to the multi-State cooperative society and also send a copy of that report direct to the Central Registrar.
The Central Registrar may for reasons to be recorded in writing, direct that if any portion of the audit report which appears to him of objectionable nature or not justified, be expunged and the portion so expunged shall not form part of the audit report.
(5) The audit report given by the auditors shall be considered by the board of a multi-State cooperative society and placed before the general body with their comments.
(6) The defects pointed out by the auditors in the working of the multi-State Cooperative society shall be specifically considered by the board and a compliance report explaining the measures taken to rectify the defects
be submitted to the Central Registrar within three months of the receipt of the audit report.
*Rule 18
__________________
*There is no rule under Serial No.18.
CHAPTER VIIAUDIT, INQUIRY, INSPECTION AND SURCHARGE
67. Audit -
(1) The Central Registrar shall audit, or cause to be audited by a person authorised by him by general or special order in writing in this behalf, the accounts of every multi-State cooperative society at least once in each year.
(2) The audit under sub-section (1) shall include an examination of overdue debts, if any, the verification of the cash balance and securities, and a valuation of the assets and liabilities of the multi-State cooperative society.
(3) The person auditing the accounts of a multi-State cooperative society shall have free access to the books, accounts, papers, vouchers, stock and other property of such society and shall be allowed to verify its cash balance and securities.
(4) The directors, managers, administrators and other officers of the multi-State cooperative society shall furnish to the person auditing the accounts of the society all such information as to its transactions and working as such person may require.
(5) The Central Registrar or the person authorised by him under sub-section (1) to audit the accounts of a multi-State cooperative society shall have power, where necessary -
(a) to summon at the time of the audit any officer, agent, servant or member of the society, past or present, who, he has reason to believe can give valuable information in regard to transactions of the society or the management of its affairs; and
(b) to require the production of any book or document relating to the affairs or, any cash or securities belonging to, the society by any officer, agent, servant, or member of the society in possession of such books, documents, cash or securities and in the event of serious irregularities discovered during audit, to take them into custody.
(6) If at the time of audit the accounts of a multi-State cooperative society are not complete, the Central Registrar or the person authorised by him under sub-section (1) to audit may cause the accounts to be written up at the expense of the society.
(7) Audit fee, if any, due from any multi-State cooperative society shall be determined by the Central Registrar and shall be recoverable in the same manner as is provided in section 89.
@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Uttaranchal state:

Audit 44. (1) A co-operative shall get its accounts audited by a chartered
accountant within the meaning of the Chartered Accountants Act.
1949:
provided that where a co-operative's business turnover is less than
Rs. ten lakhs, it may appoint as auditor, any person is, from within
its membership or outside, with such qualifications as are specified
in the articles of association
(Explanation: For the purpose of this section, business turnover
shall mean the value of sales, services provided and/or loans
recovered.)
(2) A co-operative at its Annual General Meeting, shall appoint an
auditor. This appointment will be valid only until the close of the
next succeeding Annual General Meeting.
(3) The remuneration of an auditor may be fixed by the general body
or, if not so fixed, by the Arbitral Tribunal.
(4) An auditor ceases to hold office when the auditor
(a) resigns;
(b) is removed from office under sub-section
(c) completes his/her term of office.
(5) The resignation of an auditor becomes effective at the time a
written resignation is received by the co-operative, or at the time
specified in the resignation whichever is later.
(6) The general body may by a special resolution, remove an auditor
from office.
(7) An auditor, who
(a) resigns; or
(b) receives a notice or otherwise learns of a Board's meeting called
for the purpose of removing him/her from office;
is entitled to submit to the Board a written statement giving the
reasons for the auditor's resignation or the comments on the
proposed removal, as the case may be.
(8) A vacancy created by the resignation of an auditor shall be filled up
by the arbitral tribunal.
(9) A vacancy created by the removal of an auditor, too, shall be filled
up by the arbitral tribunal.
(10) An auditor appointed to till a vacancy holds office for the unexpired
term of his/her predecessor.
(11) The auditor shall be given notice of every general meeting and at
the expense of the co-operative, will be entitled to attend and be
heard thereat on matters relating to the auditor's duties as auditor
and their exercise.
(12) It shall be the duty of the Board to ensure that annual financial
statements are prepared and presented for audit within forty-five
days of closure of the co-operative's financial year.
(13) Upon the reasonable demand of the auditor of a co-operative, the
chief executive shall arrange to
(a) provide such access to records, documents, books, accounts and
vouchers of the co-operative; and
(b) furnish such information and explanations,
as are, in the opinion of the auditor, necessary to enable him/her to
make the examination and report, and as the chief executive or a
present or former Director, members, managers, or employees are
reasonably able to furnish.
(14) It shall be the duty of the auditor to ensure that audited annual
financial statements and the auditor's accompanying report are
furnished to the co-operative within sixty days of the submission of
annual financial statements by the Board.
(15) The auditor's report to the members of the co-operative shall:
(a) state whether the auditor has obtained all the information and
explanations which to the best of the auditor's knowledge and belief
were necessary for the purpose of the auditor's audit;
(b) state whether the co-operative's balance sheet and income and
expenditure account dealt with by the report are in agreement with
the books of accounts;
(c) indicate the basis on which each asset and liability was valued,
and make specific mention of any change in the manner in which
such valuation was done in the year under examination and its
effect on surplus/deficit;
(d) indicate the amount of surplus earned/deficit incurred from
provision of services to non-members as distinct from
surplus/deficit accruing because of members or in normal course of
business;
(e) indicate every deviation in actual expenses and income from the
estimated expenses and income in the approved budget;
(f) specify the gross remuneration and/or honorarium and/or
allowances paid and/or value of benefits provided, if any, to the
chief executive, any of the office bearers, or Directors, in the
financial year under audit;
(g) state whether or not any of the office bearers or Directors had
become, at any time during the year under review, ineligible under
this Act to continue in office as an office bearer or Director; and
(h) state whether the decisions on disposal of surplus or assessment
of deficit, of the general body, at its previous annual general
meeting were implemented correctly and completely or not.

Financial Companies Regulation Bill, 2000*_RBI

2006-06-25T04:55:00.000-04:00

Right to legal representation
25. The depositor or the financial company may either appear in person or a
or more chartered accountants or company secretaries or cost accounta
practitioners or any of its officers to present his or its case under this Ac
Board.
Explanation. - For the purposes of this section, -
a. "chartered accountant" means a chartered accountant as defined in cla
subsection (1) of section 2 of the Chartered Accountants Act, 1949 (38
and who has obtained a certificate of practice under sub-section (1) of
that Act;
b. "company secretary" means a company secretary as defined in clause
section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1
who has obtained a certificate of practice under sub-section (1) of sect
Act;
c. "cost accountant" means a cost accountant as defined in clause (b) of
(1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 19
who has obtained a certificate of practice under sub-section (1) of sect

Value Added Tax and Cost Accountant.

2006-06-24T11:04:00.000-04:00

Many states have recognised Cost Accountant to certify Accounts of business inorder to ascertain VAT collection.
Gujarat VAT Act For Instance Section 63:

63. If in respect of any particular year, total turnover of a dealer exceeds
rupees one crore, then such dealer shall get his accounts verified and audited
by a specified authority within one year from the end of that year and obtain
within that period a report of such audit in the prescribed form duly signed and
verified by such specified authority alongwith such particulars as may be
prescribed. A true copy of such report shall be furnished by such dealer to the
Commissioner within such period as may be prescribed.
Explanation.-- For the purposes of this section,-
(a) "specified authority" means,-
(i) a Chartered Accountant within the meaning of the Chartered
Accountants Act, 1949 and includes persons who by virtue of the provisions
of sub-section (2) of section 226 of the Companies Act, 1956, is entitled to be
appointed to act as an auditor of companies;
(ii) a Cost Accountant within the meaning of the Cost and Works
Accountants Act, 1959;
(iii) a legal practitioner or a Sales Tax Practitioner whose name is entered in
the list maintained by the Commissioner in accordance with the provisions of
section 81.
(b) "total turnover" shall have the same meaning as given in Explanation
below sub-section (1) of section 3.
(2) If any dealer liable to get his accounts audited under sub-section
(1) fails to furnish a true copy of such report within the prescribed time the
Commissioner shall, after giving the dealer a reasonable opportunity of being
heard, impose on him, in addition to any tax payable, a sum by way of penalty
not exceeding rupees ten thousand, as he may determine.
64. The dealer shall preserve his books of accounts and the records
relevant for the purpose of this Act till the period of eight years from the end of
the accounting year to which the books of accounts and the records relate.
************************************************
Section 42 of Kerala VAT act2003 contains provision for cost accountant to audit books of accounts.Section 42 of AP VAT act.Section 31 of Karnataka VAT act Rule 34 here provides audit by tax practitioners registered under rule 163 to audit non-company accounts.Section 65 of Orissa Act.Section 60 of J&K Act.Section 62 of Assam Act.Section 62 Of Uttaranchal Act.

The MCA21 and Certified facilitation centre.

2006-06-24T11:02:00.000-04:00

A Practising Cost Accountant can now register with ministry of company affairs to act as a certified facilitation centre for E-Filing of documents with the registrar of companies.

Indian Companies Act 1956

2006-06-03T11:33:00.000-04:00

Audit of cost accounts in certain cases.233B. (1) Where in the opinion of the Central Government it is necessary so to do in relation to any company required under clause (d) of sub-section (1) of section 209 to include in its books of account the particulars referred to therein, the Central Government may, by order, direct that an audit of cost accounts of the company shall be conducted in such manner as may be specified in the order by an auditor who shall be a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959) :Provided that if the Central Government is of opinion that sufficient number of cost accountants within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959), are not available for conducting the audit of the cost accounts of companies generally, that Government may, by notification in the Official Gazette, direct that, for such period as may be specified in the said notification, such chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), as possesses the prescribed qualifications, may also conduct the audit of the cost accounts of companies, and thereupon a chartered accountant possessing the prescribed qualifications may be appointed to audit the cost accounts of the company.(2) The auditor under this section shall be appointed by the Board of directors of the company in accordance with the provisions of sub-section (1B) of section 224 and with the previous approval of the Central Government :Provided that before the appointment of any auditor is made by the Board, a written certificate shall be obtained by the Board from the auditor proposed to be so appointed to the effect that the appointment, if made, will be in accordance with the provisions of sub-section (1B) of section 224.(3) An audit conducted by an auditor under this section shall be in addition to an audit conducted by an auditor appointed under section 224.(4) An auditor shall have the same powers and duties in relation to an audit conducted by him under this section as an auditor of a company has under sub-section (1) of section 227 and such auditor shall make his report to the Central Government in such form and within such time as may be prescribed and shall also at the same time forward a copy of the report to the company.(5) (a) A person referred to in sub-section (3) or sub-section (4) of section 226 shall not be appointed or re-appointed for conducting the audit of the cost accounts of a company.(b) A person appointed, under section 224, as an auditor of a company, shall not be appointed or re-appointed for conducting the audit of the cost accounts of that company.(c) If a person, appointed for conducting the audit of cost accounts of a company, becomes subject, after his appointment, to any of the disqualifications specified in clause (a) or clause (b) of this sub-section, he shall, on and from the date on which he becomes so subject, cease to conduct the audit of the cost accounts of the company.(6) Upon receipt of an order under sub-section (1), it shall be the duty of the company to give all facilities and assistance to the person appointed for conducting the audit of the cost accounts of the company.(7) The company shall, within thirty days from the date of receipt of a copy of the report referred to in sub-section (4), furnish the Central Government with full information and explanations on every reservation or qualification contained in such report.(8) If, after considering the report referred to in sub-section (4) and the information and explanations furnished by the company under sub-section (7), the Central Government is of opinion that any further information or explanation is necessary, that Government may call for such further information and explanation and thereupon the company shall furnish the same within such time as may be specified by that Government.(9) On receipt of the report referred to in sub-section (4) and the informations and explanations furnished by the company under sub-section (7) and sub-section (8), the Central Government may take such action on the report, in accordance with the provisions of this Act or any other law for the time being in force, as it may consider necessary.(10) The Central Government may direct the company whose cost accounts have been audited under this section to circulate to its members, along with the notice of the annual general meeting to be held for the first time after the submission of such report, the whole or such portion of the said report as it may specify in this behalf.(11) If default is made in complying with the provisions of this section, the company shall be liable to be punished with fine which may extend to five thousand rupees, and every officer of the company who is in default, shall be liable to be punished with imprisonment for a term which may extend to three years, or with fine which may extend to fifty thousand rupees, or with both.

Appearance by authorised representative.288

2006-06-03T11:27:00.000-04:00

(iv) an accountant; or
In this section, accountant means a 8chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), and includes, in relation to any State, any person who by virtue of the provisions of sub-section (2) of section 2269 of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered in that State.
(v) any person who has passed any accountancy examination recognised in this behalf by the Board5; or
Recognised Accountancy qualification recognised by the Board:
[Accountancy examinations recognised.
50. The following accountancy examinations are recognised for the purpose of clause (v) of sub-section (2) of section 288, namely :—
(1) The National Diploma in Commerce awarded by the All-India Council for Technical Education under the Ministry of Education, New Delhi, provided the diploma-holder has taken Advanced Accountancy and Auditing as an elective subject for the Diploma Examination.
(2) Government Diploma in Company Secretaryship awarded by the Department of Company Affairs, under the Ministry of Industrial Development and Company Affairs, New Delhi.]
78[(2A) Final Examination of the Institute of Company Secretaries of India, New Delhi.]
79[(3) The Final Examination of the Institute of Cost and Works Accountants of India constituted under the Cost and Works Accountants Act, 1959 (23 of 1959).]
80[(4) The Departmental Examinations conducted by or on behalf of the Central Board of Direct Taxes for 81[Assessing Officers], Class I or Group ‘A’, Probationers, or for 81[Assessing Officers], Class II or Group ‘B’, Probationers, or for promotion to the post of 82[Assessing Officers], Class II or Group ‘B’, as the case may be.]
83[(5) The Revenue Audit Examination for Section Officers conducted by the Office of the Comptroller and Auditor General of India.]

Authorised Representative under Income Tax Act 1961

2006-06-03T11:20:00.000-04:00

Appearance by authorised representative.2
3288. (1) Any assessee who is entitled or required to attend before any income-tax authority or the Appellate Tribunal in connection with any proceeding under this Act otherwise than when required under section 131 to attend personally for examination on oath or affirmation, may, subject to the other provisions of this section, attend by an authorised representative.
4(2) For the purposes of this section, authorised representative means a person authorised by the assessee in writing to appear on his behalf, being
(i) a person related to the assessee in any manner, or a person regularly employed by the assessee; or
(ii) any officer of a Scheduled Bank with which the assessee maintains a current account or has other regular dealings; or
(iii) any legal practitioner who is entitled to practise in any civil court in India; or
(iv) an accountant; or
(v) any person who has passed any accountancy examination recognised in this behalf by the Board5; or
(vi) any person who has acquired such educational qualifications as the Board may prescribe6 for this purpose; or
7[(via) any person who, before the coming into force of this Act in the Union territory of Dadra and Nagar Haveli, GoaV, Daman and Diu, or Pondicherry, attended before an income-tax authority in the said territory on behalf of any assessee otherwise than in the capacity of an employee or relative of that assessee; or]
(vii) any other person who, immediately before the commencement of this Act, was an income-tax practitioner within the meaning of clause (iv) of sub-section (2) of section 61 of the Indian Income-tax Act, 1922 (11 of 1922), and was actually practising as such.
Explanation.In this section, accountant means a 8chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), and includes, in relation to any State, any person who by virtue of the provisions of sub-section (2) of section 2269 of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered in that State.
(3) 10[***]
(4) No person
(a) who has been dismissed or removed from Government service after the 1st day of April, 1938; or
(b) who has been convicted of an offence connected with any income-tax proceeding or on whom a penalty has been imposed under this Act, other than a penalty imposed on him under 1[clause (ii) of sub- section (1) of] section 271; or
(c) who has become an insolvent,
shall be qualified to represent an assessee under sub-section (1), for all times in the case of a person referred to in sub-clause (a)*, for such time as the 12[Chief Commissioner or Commissioner] may by order determine in the case of a person referred to in sub-clause (b)*, and for the period during which the insolvency continues in the case of a person referred to in sub-clause (c)*.
(5) If any person
(a) who is a legal practitioner or an accountant is found guilty of misconduct in his professional capacity by any authority entitled to institute disciplinary proceedings against him, an order passed by that authority shall have effect in relation to his right to attend before an income-tax authority as it has in relation to his right to practise as a legal practitioner or accountant, as the case may be;
13(b) who is not a legal practitioner or an accountant, is found guilty of misconduct in connection with any income-tax proceedings by the prescribed authority, the prescribed authority14 may direct that he shall thenceforth be disqualified to represent an assessee under sub-section (1).
(6) Any order or direction under clause (b) of sub-section (4) or clause (b) of sub-section (5) shall be subject to the following conditions, namely :
(a) no such order or direction shall be made in respect of any person unless he has been given a reasonable opportunity of being heard;
(b) any person against whom any such order or direction is made may, within one month of the making of the order or direction, appeal to the Board to have the order or direction cancelled; and
(c) no such order or direction shall take effect until the expiration of one month from the making thereof, or, where an appeal has been preferred, until the disposal of the appeal.
(7) A person disqualified to represent an assessee by virtue of the provisions of sub-section (3) of section 61 of the Indian Income-tax Act, 1922 (11 of 1922), shall be disqualified to represent an assessee under sub-section (1).

Income Tax Act 1961

2006-06-03T10:54:00.002-04:00

[Scheme for submission of returns through Tax Return Preparers.
139B. (1) For the purpose of enabling any specified class or classes of persons in preparing and furnishing returns of income, the Board may, without prejudice to the provisions of ection139, frame a Scheme, by notification in the Official Gazette, providing that such persons may furnish their returns of income through a Tax Return Preparer authorised to act as such under the Scheme.
(2) Every Tax Return Preparer shall assist the persons furnishing the return of income in such manner as may be specified in the Scheme framed under this section and affix his signature on such return.
(3) For the purposes of this section,
(a) Tax Return Preparer means any individual, [not being a person referred to in clause (ii) or clause (iii) or clause (iv) of sub-section (2) of ection288 or an employee of the specified class or classes of persons], who has been authorised to act as a Tax Return Preparer under the Scheme framed under this section;
(b) specified class or classes of persons means any person, other than a company or a person, whose accounts are required to be audited under ection 44AB or under any other law for the time being in force, who is required to furnish a return of income under this Act.
(4) The Scheme framed by the Board under this section may provide for the following, namely:
(a) the manner in which and the period for which the Tax Return Preparers shall be authorised under sub-section (3);
(b) the educational and other qualifications to be possessed, and the training and other conditions required to be fulfilled, by a person to act as a Tax Return Preparer;
(c) the code of conduct for the Tax Return Preparers;
(d) the duties and obligations of the Tax Return Preparers;
(e) the circumstances under which the authorisation given to a Tax Return Preparer may be withdrawn;
(f) any other matter which is required to be, or may be, specified by the Scheme for the purposes of this section.
(5) The Scheme framed by the Board under this section shall be laid, as soon as may be after it is framed, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the scheme or both Houses agree that the Scheme should not be framed, the Scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that Scheme.]
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139. 30[(1) Every person31,
(a) being a company 32[or a firm]; or
(b) being a person other than a company 32[or a firm], if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,
shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form33 and verified in the prescribed manner and setting forth such other particulars as may be prescribed :
Provided that a person referred to in clause (b), who is not required to furnish a return under this sub-section and residing in such area as may be specified by the Board in this behalf by notification34 in the Official Gazette, and who 35[during the previous year incurs an expenditure of fifty thousand rupees or more towards consumption of electricity or] at any time during the previous year fulfils any one of the following conditions, namely :
(i) is in occupation of an immovable property exceeding a specified floor area, whether by way of ownership, tenancy or otherwise, as may be specified36 by the Board in this behalf; or
(ii) is the owner or the lessee of a motor vehicle other than a two-wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor vehicle or not; or
(iii) 37[***]
(iv) has incurred expenditure for himself or any other person on travel to any foreign country; or
(v) is the holder of a credit card38, not being an add-on card, issued by any bank or institution; or
(vi) is a member of a club where entrance fee charged is twenty-five thousand rupees or more,
shall furnish a return, of his income 38a[during any previous year ending before the 1st day of April, 2005], on or before the due date in the prescribed form39 and verified in the prescribed manner and setting forth such other particulars as may be prescribed :
Provided further that the Central Government may, by notification40 in the Official Gazette, specify the class or classes of persons to whom the provisions of the first proviso shall not apply:
Provided also that every company 41[or a firm] shall furnish on or before the due date the return in respect of its income or loss in every previous year:
41[Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year, without giving effect to the provisions of section 10A or section 10B or section 10BA or Chapter VI-A exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.]
Explanation 1.For the purposes of this sub-section, the expression motor vehicle shall have the meaning assigned to it in clause (28) of section 242 of the Motor Vehicles Act, 1988 (59 of 1988).
Explanation 2.In this sub-section, due date means,
(a) where the assessee is
(i) a company; or
(ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or
(iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force,
the 31st day of October of the assessment year;
(b) in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year;
(c) in the case of any other assessee, the 31st day of July of the assessment year.
Explanation 3.For the purposes of this sub-section, the expression travel to any foreign country does not include travel to the neighbouring countries or to such places of pilgrimage as the Board may specify in this behalf by notification43 in the Official Gazette.]
44[(1A) Without prejudice to the provisions of sub-section (1), any person, being an individual who is in receipt of income chargeable under the head Salaries may, at his option, furnish a return of his income for any previous year to his employer, in accordance with such scheme as may be specified by the Board in this behalf, by notification in the Official Gazette45, and subject to such conditions as may be specified therein, and such employer shall furnish all returns of income received by him on or before the due date, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and manner as may be specified in that scheme, and in such case, any employee who has filed a return of his income to his employer shall be deemed to have furnished a return of income under sub-section (1), and the provisions of this Act shall apply accordingly.]
46[***]]
47[(1B) Without prejudice to the provisions of sub-section (1), any person, being a company or being a person other than a company, required to furnish a return of income under sub-section (1), may, at his option, on or before the due date, furnish a return of his income for any previous year in accordance with such scheme as may be specified by the Board in this behalf by notification in the Official Gazette48 and subject to such conditions as may be specified therein, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and in the manner as may be specified in that scheme, and in such case, the return of income furnished under such scheme shall be deemed to be a return furnished under sub-section (1), and the provisions of this Act shall apply accordingly.]
49[***]
(3) If any person who 50[***] has sustained a loss in any previous year under the head Profits and gains of business or profession or under the head Capital gains and claims that the loss or any part thereof should be carried forward under sub-section (1) of section 72, or sub-section (2) of section 73, or sub-section (1) 51[or sub-section (3)] of section 74, 52[or sub-section (3) of section 74A], he may furnish, within the time allowed under sub-section (1) 53[***], a return of loss in the prescribed form54 and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub-section (1).
55[(4) Any person who has not furnished a return within the time allowed56 to him under sub-section (1), or within the time allowed under a notice issued under sub-section (1) of section 142, may furnish the return for any previous year at any time56 before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier :
Provided that where the return relates to a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year.]
57[58[(4A) 59Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).]]
60[(4B) 61The chief executive officer (whether such chief executive officer is known as Secretary or by any other designation) of every political party shall, if the total income in respect of which the political party is assessable (the total income for this purpose being computed under this Act without giving effect to the provisions of section 13A) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act, shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).]
62[(4C) Every
(a) scientific research association referred to in clause (21) of section 10;
(b) news agency referred to in clause (22B) of section 10;
(c) association or institution referred to in clause (23A) of section 10;
(d) institution referred to in clause (23B) of section 10;
(e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10;
(f) trade union referred to in sub-clause (a) or association referred to in sub-clause (b) of clause (24) of section 10,
shall, if the total income in respect of which such scientific research association, news agency, association or institution, fund or trust or university or other educational institution or any hospital or other medical institution or trade union is assessable, without giving effect to the provisions of section 10, exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form63 and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).]
64[(5) If any person, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier :
Provided that where the return relates to the previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year.]
65[(6) The prescribed form of the returns referred to 66[in sub-sections (1) and (3) of this section, and in clause (i) of sub-section (1) of section 142] shall, in such cases as may be prescribed, require the assessee to furnish the particulars of income exempt from tax, assets of the prescribed nature 67[, value and belonging to him, his bank account and credit card held by him], expenditure exceeding the prescribed limits incurred by him under prescribed heads and such other outgoings as may be prescribed.
(6A) Without prejudice to the provisions of sub-section (6), the prescribed form of the returns referred to 68[in 69[***] this section, and in clause (i) of sub-section (1) of section 142] shall, in the case of an assessee engaged in any business or profession, also require him to furnish 70[the report of any audit 71[referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, a copy of such report together with proof of furnishing the report], the] particulars of the location and style of the principal place where he carries on the business or profession and all the branches thereof, the names and addresses of his partners, if any, in such business or profession and, if he is a member of an association or body of individuals, the names of the other members of the association or the body of individuals and the extent of the share of the assessee and the shares of all such partners or the members, as the case may be, in the profits of the business or profession and any branches thereof.]
(7) 72[***]
73[74(8)(a) 75[Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then [whether or not the 76[Assessing] Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2)], the assessee shall be liable to pay simple interest at 77[fifteen] per cent per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the total income as determined on regular assesment, as reduced by the advance tax, if any, paid, and any tax deducted at source :
Provided that the 78[Assessing] Officer may, in such cases and under such circumstances as may be prescribed79, reduce or waive the interest payable by any assessee under this sub-section.
Explanation 1.For the purposes of this sub-section, specified date, in relation to a return for an assessment year, means,
(a) in the case of every assessee whose total income, or the total income of any person in respect of which he is assessable under this Act, includes any income from business or profession, the date of the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year or the 30th day of June of the assessment year, whichever is later;
(b) in the case of every other assessee, the 30th day of June of the assessment year.]
80[Explanation 2.Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this sub-section.]
81[(b) Where as a result of an order under section 147 or section 154 or section 155 or section 250 or section 254or section 260 or section 262 or section 263 or section 264 82[or an order of the Settlement Commission under sub-section (4) of section 245D], the amount of tax on which interest was payable under this sub-section has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and
(i) in a case where the interest is increased, the 83[Assessing] Officer shall serve on the assessee, a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly;
(ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.]]
84[(c) The provisions of this sub-section shall apply in respect of the assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, and references therein to the other provisions of this Act shall be construed as references to the said provisions as they were applicable to the relevant assessment year.]
85[(9) Where the 86[Assessing] Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the 86[Assessing] Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return :
Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the 86[Assessing] Officer may condone the delay and treat the return as a valid return.
Explanation.For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :
(a) the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in;
(b) the return is accompanied by a statement showing the computation of the tax payable on the basis of the return;
87[(bb) the return is accompanied by the report of the audit referred to in section 44AB, or, where the report has been furnished prior to the furnishing of the return, by a copy of such report together with proof of furnishing the report;]
(c) the return is accompanied by proof of
(i) the tax, if any, claimed to have been deducted 87a[or collected] at source 88[before the 1st day of April, 89[2008]] and the advance tax and tax on self-assessment, if any, claimed to have been paid :
90[Provided that where the return is not accompanied by proof of the tax, if any, claimed to have been deducted 90a[or collected] at source, the return of income shall not be regarded as defective if
(a) a certificate for tax deducted was not furnished under section 203 to the person furnishing his return of income;
The following clause (a) shall be substituted for the existing clause (a) of proviso to sub-clause (i) of clause (c) in the Explanation to sub-section (9) of section 139 by the Finance Act, 200, w.e.f. 1-4-2007 :
(a) a certificate for tax deducted or collected was not furnished under section 203 or sectio 206C to the person furnishing his return of income;
(b) such certificate is produced within a period of two years specified under sub-section (14) of section 155;]
(ii) the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (38 of 1974);
(d) where regular books of account are maintained by the assessee, the return is accompanied by copies of
(i) manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet;
(ii) in the case of a proprietary business or profession, the personal account of the proprietor; in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members; and in the case of a partner or member of a firm, association of persons or body of individuals, also his personal account in the firm, association of persons or body of individuals;
(e) where the accounts of the assessee have been audited, the return is accompanied by copies of the audited profit and loss account and balance sheet and the auditors report 91[and, where an audit of cost accounts of the assessee has been conducted, under section 233B92 of the Companies Act, 1956 (1 of 1956), also the report under that section];
(f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year :]
92a[Provided that the Board may, by rules made by it,
(a) dispense, for a class or classes of persons, with any of the conditions specified in clauses (a) to (f); or
(b) include any of the conditions specified in clauses (a) to (f) of this Explanation in the form of return prescribed under sub-section (1) or sub-section (6) of this section.]
(10) 93[Omitted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991.]
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Audit of cost accounts in certain cases.
233B. (1) Where in the opinion of the Central Government it is necessary so to do in relation to any company required under clause (d) of sub-section (1) of section 209 to include in its books of account the particulars referred to therein, the Central Government may, by order, direct that an audit of cost accounts of the company shall be conducted in such manner as may be specified in the order by an auditor who shall be a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959) :
Provided that if the Central Government is of opinion that sufficient number of cost accountants within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959), are not available for conducting the audit of the cost accounts of companies generally, that Government may, by notification in the Official Gazette, direct that, for such period as may be specified in the said notification, such chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), as possesses the prescribed qualifications, may also conduct the audit of the cost accounts of companies, and thereupon a chartered accountant possessing the prescribed qualifications may be appointed to audit the cost accounts of the company.
(2) The auditor under this section shall be appointed by the Board of directors of the company in accordance with the provisions of sub-section (1B) of section 224 and with the previous approval of the Central Government :
Provided that before the appointment of any auditor is made by the Board, a written certificate shall be obtained by the Board from the auditor proposed to be so appointed to the effect that the appointment, if made, will be in accordance with the provisions of sub-section (1B) of section 224.
(3) An audit conducted by an auditor under this section shall be in addition to an audit conducted by an auditor appointed under section 224.
(4) An auditor shall have the same powers and duties in relation to an audit conducted by him under this section as an auditor of a company has under sub-section (1) of section 227 and such auditor shall make his report to the Central Government in such form and within such time as may be prescribed and shall also at the same time forward a copy of the report to the company.
(5) (a) A person referred to in sub-section (3) or sub-section (4) of section 226 shall not be appointed or re-appointed for conducting the audit of the cost accounts of a company.
(b) A person appointed, under section 224, as an auditor of a company, shall not be appointed or re-appointed for conducting the audit of the cost accounts of that company.
(c) If a person, appointed for conducting the audit of cost accounts of a company, becomes subject, after his appointment, to any of the disqualifications specified in clause (a) or clause (b) of this sub-section, he shall, on and from the date on which he becomes so subject, cease to conduct the audit of the cost accounts of the company.
(6) Upon receipt of an order under sub-section (1), it shall be the duty of the company to give all facilities and assistance to the person appointed for conducting the audit of the cost accounts of the company.
(7) The company shall, within thirty days from the date of receipt of a copy of the report referred to in sub-section (4), furnish the Central Government with full information and explanations on every reservation or qualification contained in such report.
(8) If, after considering the report referred to in sub-section (4) and the information and explanations furnished by the company under sub-section (7), the Central Government is of opinion that any further information or explanation is necessary, that Government may call for such further information and explanation and thereupon the company shall furnish the same within such time as may be specified by that Government.
(9) On receipt of the report referred to in sub-section (4) and the informations and explanations furnished by the company under sub-section (7) and sub-section (8), the Central Government may take such action on the report, in accordance with the provisions of this Act or any other law for the time being in force, as it may consider necessary.
(10) The Central Government may direct the company whose cost accounts have been audited under this section to circulate to its members, along with the notice of the annual general meeting to be held for the first time after the submission of such report, the whole or such portion of the said report as it may specify in this behalf.
(11) If default is made in complying with the provisions of this section, the company shall be liable to be punished with fine which may extend to five thousand rupees, and every officer of the company who is in default, shall be liable to be punished with imprisonment for a term which may extend to three years, or with fine which may extend to fifty thousand rupees, or with both.
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Appearance by authorised representative.2
3288. (1) Any assessee who is entitled or required to attend before any income-tax authority or the Appellate Tribunal in connection with any proceeding under this Act otherwise than when required under section 131 to attend personally for examination on oath or affirmation, may, subject to the other provisions of this section, attend by an authorised representative.
4(2) For the purposes of this section, “authorised representative” means a person authorised by the assessee in writing to appear on his behalf, being—
(i) a person related to the assessee in any manner, or a person regularly employed by the assessee; or
(ii) any officer of a Scheduled Bank with which the assessee maintains a current account or has other regular dealings; or
(iii) any legal practitioner who is entitled to practise in any civil court in India; or
(iv) an accountant; or
(v) any person who has passed any accountancy examination recognised in this behalf by the Board5; or
(vi) any person who has acquired such educational qualifications as the Board may prescribe6 for this purpose; or
7[(via) any person who, before the coming into force of this Act in the Union territory of Dadra and Nagar Haveli, GoaV, Daman and Diu, or Pondicherry, attended before an income-tax authority in the said territory on behalf of any assessee otherwise than in the capacity of an employee or relative of that assessee; or]
(vii) any other person who, immediately before the commencement of this Act, was an income-tax practitioner within the meaning of clause (iv) of sub-section (2) of section 61 of the Indian Income-tax Act, 1922 (11 of 1922), and was actually practising as such.
Explanation.—In this section, “accountant” means a 8chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949), and includes, in relation to any State, any person who by virtue of the provisions of sub-section (2) of section 2269 of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered in that State.
(3) 10[***]
(4) No person—
(a) who has been dismissed or removed from Government service after the 1st day of April, 1938; or
(b) who has been convicted of an offence connected with any income-tax proceeding or on whom a penalty has been imposed under this Act, other than a penalty imposed on him under 1[clause (ii) of sub- section (1) of] section 271; or
(c) who has become an insolvent,
shall be qualified to represent an assessee under sub-section (1), for all times in the case of a person referred to in sub-clause (a)*, for such time as the 12[Chief Commissioner or Commissioner] may by order determine in the case of a person referred to in sub-clause (b)*, and for the period during which the insolvency continues in the case of a person referred to in sub-clause (c)*.
(5) If any person—
(a) who is a legal practitioner or an accountant is found guilty of misconduct in his professional capacity by any authority entitled to institute disciplinary proceedings against him, an order passed by that authority shall have effect in relation to his right to attend before an income-tax authority as it has in relation to his right to practise as a legal practitioner or accountant, as the case may be;
13(b) who is not a legal practitioner or an accountant, is found guilty of misconduct in connection with any income-tax proceedings by the prescribed authority, the prescribed authority14 may direct that he shall thenceforth be disqualified to represent an assessee under sub-section (1).
(6) Any order or direction under clause (b) of sub-section (4) or clause (b) of sub-section (5) shall be subject to the following conditions, namely :—
(a) no such order or direction shall be made in respect of any person unless he has been given a reasonable opportunity of being heard;
(b) any person against whom any such order or direction is made may, within one month of the making of the order or direction, appeal to the Board to have the order or direction cancelled; and
(c) no such order or direction shall take effect until the expiration of one month from the making thereof, or, where an appeal has been preferred, until the disposal of the appeal.
(7) A person disqualified to represent an assessee by virtue of the provisions of sub-section (3) of section 61 of the Indian Income-tax Act, 1922 (11 of 1922), shall be disqualified to represent an assessee under sub-section (1).
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Audit of accounts of certain persons carrying on business or profession.
7944AB. 80Every person,—
(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakh rupees in any previous year 81[***]; or
(b) carrying on profession shall, if his gross receipts in profession exceed ten lakh rupees in any 82[previous year; or
(c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD or section 44AE or section 44F 83[or section 44BB or section 44BBB], as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year,] 84[***]
get his accounts of such previous year 85[***] audited by an accountant before the specified date and 86[furnish by] that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed :
87[Provided that this section shall not apply to the person, who derives income of the nature referred to in 88[***] section 44B or 89[section 44BBA], on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later :
Provided further that in a case where such person is required by or under any other law to get his accounts audited 90[***], it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and 91[furnishes by] that date the report of the audit as required under such other law and a further report 92[by an accountant] in the form prescribed under this section.
Explanation.—For the purposes of this section,—
(i) “accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;
93[(ii) “specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the 31st day of October of the assessment year.]]
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Central excise Act 1944

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14A. Special audit in certain cases.- (1) If at any stage of enquiry, investigation or any other proceedings before him, any Central Excise Officer not below the rank of an Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, having regard to the nature and complexity of the case and the interest of revenue, is of the opinion that the value has not been correctly declared or determined by a manufacturer or any person, he may, with the previous approval of the Chief Commissioner of Central Excise, direct such manufacturer or such person to get the accounts of his factory, office, depots, distributors or any other place, as may be specified by the said Central Excise Officer, audited by a cost accountant, nominated by the Chief Commissioner of Central Excise in this behalf.
(2) The cost accountant, so nominated shall, within the period specified by the Central Excise Officer, submit a report of such audit duly signed and certified by him to the said Central Excise Officer mentioning therein such other particulars as may be specified:
Provided that the Central Excise Officer may, on an application made to him in this behalf by the manufacturer or the person and for any material and sufficient reason, extend the said period by such further period or periods as he thinks fit; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed one hundred and eighty days from the date on which the direction under sub-section (1) is received by the manufacturer or the person.
(3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the manufacturer or person aforesaid have been audited under any other law for the time being in force or otherwise.
(4) Omitted.
(5) The manufacturer or the person shall be given an opportunity of being heard in respect of any material gathered on the basis of audit under sub-section (1) and proposed to be utilised in any proceedings under this Act or rules made thereunder.
Explanation.—For the purpose of this section, "cost accountant" shall have the meaning assigned to it in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959).]
14AA. Special audit in cases where credit of duty availed or utilised is not within the normal limits, etc.- (1) If the Commissioner of Central Excise has reason to believe that the credit of duty availed of or utilised under the rules made under this Act by a manufacturer of any excisable goods—
(a) is not within the normal limits having regard to the nature of the excisable goods produced or manufactured, the type of inputs used and other relevant factors, as he may deem appropriate;
(b) has been availed of or utilised by reason of fraud, collusion or any wilful mis-statement or suppression of facts,
he may direct such manufacturer to get the accounts of his factory, office, depot, distributor or any other place, as may be specified by him, audited by a cost accountant nominated by him.
(2) The cost accountant so nominated shall, within the period specified by the Commissioner of Central Excise, submit a report of such audit duly signed and certified by him to the said Commissioner mentioning therein such other particulars as may be specified.
(3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the said manufacturer aforesaid have been audited under any other law for the time being in force or otherwise.
(4) Omitted.
(5) The manufacturer shall be given an opportunity of being heard in respect of any material gathered on the basis of audit under sub-section (1) and proposed to be utilised in any proceedings under this Act or rules made thereunder.
Explanation.—For the purpose of this section, "cost accountant" shall have the meaning assigned to it in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959).]

Manufacture and other Operations in Warehouse Regulations, 1966

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11. Special Audit in certain cases :
(i) The Chief Commissioner of Customs may, for reasons to be recorded in writing, direct a manufacturer to get the accounts of his warehouse, office, stores, godowns, factory, depot, or other establishment audited by a Cost Accountant, nominated by him in this behalf.
(ii) The Cost Accountant, shall submit the audit report duly signed and certified by him within the period specified by the Chief Commissioner of Customs, or such extended period as may be allowed by him, to the Commissioner, giving therein such other information or particulars as may have been asked for by the Chief Commissioner.
(iii) The provisions of sub-regulation (i) shall be in addition to, and not in derogation of any other law for the time being in force.
(iv) The expenses of, and incidental to, such audit (including the remuneration of the Cost Accountant) shall be determined by the Chief Commissioner and paid by the manufacturer and in default of such payment shall be recoverable from the manufacturer in the manner provided in section 142 of the Customs Act, 1962 (52 of 1962).
(v) The manufacturer shall be given a copy of the audit report conducted in pursuance of sub-regulation (1) who may make a representation, if he so likes.
Explanation: For the purpose of this regulation "Cost Accountant" shall have the meaning assigned to it in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959).