Page 244 - DCOM509_ADVANCED_AUDITING

Sukhpreet Kaur, Lovely Professional University
Unit 13: Tax and Cost Audit

Unit 13: Tax and Cost Audit Notes

CONTENTS
Objectives
Introduction

13.1 Audit(s) Under the Income Tax Act, 1961
13.1.1 Audit of Public Trusts
13.1.2 Audit of Accounts in Connection with the claim for Deduction under
Sections 35D and 35E
13.1.3 Tax Audit under section 44AB
13.1.4 Approach to Tax Audit under VAT

13.1.5 Audit Report under the VAT Law
13.2 Concept of Cost Audit
13.2.1 Types of Cost Audit
13.2.2 Advantages of Cost Audit
13.2.3 Functions of Cost Auditor

13.3 Summary
13.4 Keywords
13.5 Review Questions

13.6 Further Readings
Objectives

After studying this unit, you will be able to:
 Discuss the audit of Public Trusts
 Explain the Audit report under the VAT law

 Describe the Concept of Cost Audit
 Identify the Functions of Cost Auditor

Introduction

For ensuring compliance sometimes audit become a necessity. Therefore, various statutes,
including legislations governing direct and indirect tax provisions have incorporated audit
provisions in some or the other form. Under direct taxes, the Central Board of Direct taxes has
posed onerous responsibility on the auditor via Income-tax Act, 1961 which has various provisions
requiring compulsory audit. In the field of indirect taxes, audit is mostly done by departmental
officers. However, with the growing importance of the indirect taxes in the economy, the
Government is realizing the need of audit by independent bodies especially equipped to do the
same. Introduction of audit provisions in the newly introduced Value Added Tax (VAT)
legislations is a step towards this direction.

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