Objecting to the Maharashtra government’s decision of removing the audit limit for non-CAs government-authoris ed auditors, the accounting regulator Institute of Chartered Accountants of India (ICAI) has urged to restore the audit limit of Rs 1 lakh at the earliest. No audit limit enables the auditors to perform audit of trusts of any size.
ICAI president Uttam Prakash Agarwal told, “In case a CA fails to discharge his duties properly, disciplinary mechanism is in place but in case of the government-authoris ed auditors, no such mechanism exists presently.”Online GST Certification Course by TaxGuru & MSME- Click here to Join
Agarwal said, “Think of the credibility that such audits and certification would carry if they are performed by someone with no idea of accounting and auditing standards.” According to ICAI, the government authorized auditors are non-CAs and don’t have much knowledge on the auditing and accounting standards. Many trusts in Maharashtra like Bombay hospital Trust, Tata Memorial, Bhartiya Vidyapeeth receive large foreign funds and it would be inappropriate if a non-CA performs auditing, feels ICAI.
The Maharashtra government offers a one-year course called GDCA (government diploma in cooperation and accountancy) and anyone having completed that course is called a certified auditor.
Agarwal added, “It is alright for a government certified auditor to do the auditing of income upto Rs 1 lakh but not beyond that. Under the Income Tax Act, only CAs are authorised to conduct audit of designated entities, turnover and the same principle should be applied here.”
The earlier limit of audit of cooperative trusts was Rs 15,000 which was eventually increased to Rs 50,000. In December 2005, the limit was again raised to Rs 1 lakh. The immediate increase from 1 lakh limit to no bar limit is unjustifiable, Agarwal said