COVID - 19 impact on Audit reporting

With wide-ranging COVID- 19 travel restrictions all around for an undetermined period, the companies and their auditors are encountered with uncertainties in a number of audit areas. Difficulties are also faced by entities in meeting their reporting timelines and the same extend to auditors and their ability to complete the audit on time due to impediments presented by COVID- 19. Considering this, auditors may need to perform additional performance procedures to evaluate the appropriateness of management in assessing the impact of uncertainties in the business.

Amid the economic turmoil, COVID- 19 is the principal consideration in the auditor's determination in assessing whether one or more Critical Audit Matter (CAM) exists and if exists, how to address those CAMs while reporting financial statements. A lot more doubts are rising till date on part of auditor in fulfilling their reporting requirement. To provide a detailed reporting framework to members in these uncertain times, guidance on Auditor's Requirements - Key Audit Considerations amid COVID- 19 has been issued. Along with explaining the management's (preparing the financial statements) and auditor's (conducting audit) responsibility, guidance provides a list of indicative factors that an auditor should consider on case to case basis. Further, the guidance is divided into three sections:-

1. Impact on Auditor's Report - This section provides the possible impact of COVID-19 on the auditor's report in different situations like:

a) Improper accounting/ inadequate disclosures;

b) Inability to obtain sufficient and appropriate evidence;

c) Going concern considerations, including an Emphasis of Matter Paragraph in the Auditor's Report;

d) COVID-19 and Key Audit Matters; etc.

2. Impact on Reporting under CARO 2016 - With the deferment of application of Companies (Auditor's Report) Order, 2020 for one year, auditors should continue to comment on matters as specified in Companies (Auditor's Report) Order, 2016. This section provides an illustrative list of clauses under CARO 2016 which are expected to be impacted due to COVID- 19. The list is as follows:-

• Clause 3[ii]: Physical Verification of Inventory

• Clause 3[vii](a): Reporting on deposit of undisputed statutory dues

• Clause 3[viii]: Default in repayment of loans or borrowings to a financial institution, bank, government or dues to debenture holders, etc.

3. Impact on Reporting on Internal Financial Controls with Reference to Financial Statements - Internal control testing is considered to be an integral part of audit procedures as it determines the level of substantive procedures to be carried out by the auditor. This section of guidance provides an audit approach and a list of key factors that should be considered by the auditor while conducting the audit procedure. It also explain the different scenarios in which reporting needs to be done on internal controls.

All You Need to Know About the Latest ITR-2 Utility Changes for AY 2025-26

Stay Ahead: 6 Major Updates in ITR-2 for Taxpayers This Year! Filing your taxes might not top your list of fun things to do, but knowing what has changed in this year’s ITR-2 utility can save you a lot of hassle! Whether you’re a seasoned taxpayer or new to the process, a friendly heads-up on the latest changes will help you file smoothly and confidently. Let’s dive into the six key updates every taxpayer should know for Assessment Year 2025-26! 1. More Tax Regimes, More Flexibility This year, the ITR-2 utility lets you choose between the old and new tax regimes with ease. Whether you prefer claiming deductions or opting for lower tax rates, you can pick what suits your finances! 2. Pensioners, You’re in Luck! Pensioners can now breathe a little easier! The updated form makes it simpler to report family pension and annuity income, making things clearer and less confusing. 3. No More Guesswork in Property Valuations Selling property? Now, the new ITR-2 mandates you provide the ci...

The Ultimate Guide to Downloading Form 16 and Filing Your ITR Like a Pro

Form 16 Download Guide: Maximize Your Refund and Avoid Tax Filing Mistakes Filing your Income Tax Returns (ITR) can sound a bit overwhelming, but with the right tools and knowledge, you can breeze through it and even score a bigger refund! One of the key documents you’ll need to get started is Form 16 , which your employer provides. Here’s a fun, easy guide to help you download Form 16, avoid common mistakes, and make sure your ITR is spot on! What is Form 16 and Why Do You Need It? Think of Form 16 as your personal salary and tax summary for the year. It’s like a report card, but instead of grades, it shows how much you earned and how much tax your employer has already paid on your behalf through TDS (Tax Deducted at Source). You need this form to file your ITR correctly. How to Download Form 16? There are two main ways to get your hands on Form 16 : From Your Employer Your employer should give you Form 16 by June 15th each year (don’t worry, they’ll send it straight to you...

How Much HRA Can You Claim Without Rent Receipts in 2025? Let’s Break It Down!

"Claiming HRA Without Rent Receipts in 2025: What You Need to Know" Introduction: If you’re planning to file your Income Tax Returns (ITR) in 2025 and you’re living in a rented place, you might be wondering how much House Rent Allowance (HRA) you can claim—especially if you don’t have rent receipts. Don’t worry, you're not alone! Many people are in the same boat. But guess what? You can still claim HRA even if you don’t have rent receipts. Let's dive into how this works and the latest rules for 2025. What is HRA and Why is It Important? First off, HRA is the amount an employer provides to help you cover your rent expenses. The good news is, this amount can be tax-exempt under certain conditions. For those living in rented accommodation, HRA can reduce your taxable income, which in turn can lower your tax bill. But to claim this benefit, you usually need rent receipts, right? Well, not always! Can You Claim HRA Without Rent Receipts? Yes, you can! But before y...

News by Findoc

Search This Blog