More Under Company Law


  1. vswami says:


    Other related Observations:

    A CA engaged for audit of the final accounts of Housing Socities (Flats and Apartments), besides any other already prescribed qualification (s), ought to have a reasonably good knowledge of , and insightful practical exposure to, –

    A) the governing law (s) in force in each of the States e.g. In Maharashtra (Mumbai) , mainly the MAOA and MOFA, and, in Karnataka, KAOA and KOFA;

    B) the other State law (s) applicable to them e.g in MAHA, the old (still in force) and amended enactment(s) for formation and conduct of the affairs of CHS (- in KAR, the status of corresponding enactment (s) on same lines as in MAHA still remains unknown); and

    C) the tax legilations (e.g. of the Centre , on income-tax and service tax, and of the States on VAT)

    Then and then only . any external independent audit by a CA could have significance and serve a truly useful purpose (otherwise, might prove a futile and inconsequential paper formality, a sheer farce) ; that is, primarily from the viewpoint of the common interests of the referred Housing Societies and their respective constituents, and incidentally, that of the concerned Central and State authorities duty bound to administer, implement and enforce the respective laws.

    Sadly, the commonly observed and complained of heart-felt grievance is that, there has been a cavernous gap , increasingly widening, between what the laws say /mandate and the field realities. The blame has to be shared by concerned or impacted one and all; more so, apart from the authorities. Further, in no small measure by the purchasers themselves constituting the society or association,subject to having a duly or otherwise elected representatives, constituting the empowered governing body.

    In short, the travel time between heart and head (mind) , it appears, has been alarmingly shooting up, but with no hope for a let-up in the foreseeable future.

  2. vswami says:

    ” 4.Use of the Term “Profit and Loss Account” or “Statement of Profit and Loss” in the Statutory Audit Reports of Companies.”

    One,who may have no real intimate exposure or hand-on mindful field experience in company audit, is quite likely to be left unsure, if not bewildered or totally nonplussed on,-as to whether the cited amendment is simply a cosmetic change in the wording, nothing more, or has a laudable objective or purpose behind the move.

    Be that as it could not have been expected otherwise, seizing at the opportunity,another angle thrown up for anyone to offer own Reaction,
    though not related to ‘companies’, but most certainly to auditing CAs engaged for audit of “Housing Societies”:

    The said housing societies, if residential,- unlike other types of co=operative societies,- do not have or permitted to have any commercial activity with the object of making a ‘profit’ in its profound sense.It is on this ground that such housing societies claim and are being exempt from taxation, relying on the known and established legal, time honored principle of “mutuality”.
    Nonetheless, one may have come across instances of audited final accounts of housing societies (of flats or apartments)in which are included/presented, obviously unwittingly, an account styled as “profit and loss account”; besides/in addition to a statement of “Receipts and Payments” and/ or “Income and Expenditure”. If were to go strictly by legal or accounting principles, any year-end surplus in such accounts, in one’s firm view, do not have the characteristics of ‘income’,in any view ‘profit’; at best, to be appropriately called, – “excess of receipts over payments (or outgoings”.
    It is high time that ICAI, the august body overseeing CAs, looks into this and similar other aspects of vital importance to housing societies, deliberates in-depth and comes out with suitable guidelines to auditing CAs. That should effectively assist them in doing a proper audit and reporting.
    Subject/Open to well considered views of experts in ICAI, also those active in the field.

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