A tech enabled approach for auditors to safeguard themselves from increased surveillance risk

A tech enabled approach for auditors to safeguard themselves from increased surveillance risk

A tech enabled approach for auditors to safeguard themselves from increased surveillance risk

Background

In the recent past, the audit profession has been the subject matter of public commentary and scrutiny thanks to the searing probe it is facing.

The increased weightage placed on statutory duties of auditors has exceptionally increased the risks associated with the audit profession. It is safe to say that scrutiny on auditors has substantially increased due to the constitution of the National Financial Reporting Authority under Section 132 of the Companies Act 2013. Now, auditors are looking at possible penalization for failure to detect fraud or non-compliance with statutory provisions. The penalization includes the power to debar the auditor or audit firm from undertaking an audit for up to 10 years. Even Big4s are not spared.

The shift in the spotlight can be clearly noticed in some recent case laws. For instance, in ICAI v. Mukesh Gang, the Hyderabad High Court held the auditors guilty of gross negligence and violation of auditing standards. The level of strictness with which auditors are penalized for such wrongs- is in contrast with decisions in cases such as Union of India v. M.N. Basu where the Calcutta High Court had stated that non-reporting of extending loan without passing a resolution under Section 370 of the Companies Act, 1956, was not due to gross negligence but due to an erroneous interpretation of the law.

The proposition of an auditor being a ‘watchdog and not a bloodhound’ in Re Kingston Cotton Mills is now seeming outdated. In the past, auditors have failed to pay too much heed to nuanced expectations like receiving independent external confirmations. However, with the paradigm shift in the way the profession is being viewed, auditors agree that the risk – rewards relationship is heavily skewed and while the risks of audit have disproportionately increased, the revenue is subpar.

This is driving auditors to become more innovative within the audit practice and use forward-looking and proactive tech enabled audit tools. Technology has started to make inroads in most audit firms, and this directly and positively impacts the quality of each audit. The use of sophisticated technology solutions like practice management, audit confirmation, sampling, and data analytics is fast becoming standard operating practice as firms are embracing the digital-first approach to engagements. Not only are these tools enabling auditors to improve accuracy and analyze anomalies, trends, and areas of risk, but they are also proving to be much more cost effective for auditors.

One such tool that is helping auditors optimize the quality of processes and mitigate potential risks related to audit confirmation is Firmway. Firmway provides web-based SaaS platform that digitize the entire audit confirmation process. In cases like the Satyam fraud case, it was found that auditors’ failure to properly execute third-party confirmation procedures resulted in the fraud going undetected. It was held that the auditor relinquished control of cash confirmations entirely to their client and failed to question the integrity of the confirmation responses they received from the client by following up with the banks.

The entire fraud would have been nipped in the bud if there had been a platform where auditors could independently confirm all balances from third-parties. In Arrangement with The ICAI, Firmway is one such platform that helps auditors automize the independent audit confirmation process in compliance with SA 505. Firmway intends to show a clear picture of the company’s financials and curtail any potential fraud and misinformation. It thus provides auditors and authorities a higher level of assurance and smoothens the overall audit process.

To know more about the Audit Confirmation tool – Click here

New TDS Rules

What, Why & How for the New TDS Rules That Will Be In Effect From July 1, 2021

What, Why & How for the New TDS Rules That Will Be In Effect From July 1, 2021

Background

The Assessment Year (AY) 2020-21 accumulated 6.83 crores Income Tax Returns (ITR) out of a working population of about 66.22 crores. And these are only individuals. With 10.07 lac active companies in India, the number of ITRs filed is alarmingly low.

In order to bring an end to this menace, the Government of India in its Union Budget 2021 has proposed to levy a higher rate of tax deducted at source (‘TDS’) and tax collected at source (‘TCS’) on non-filers of the income tax return.

According to the Finance Minister’s Budget, this new TDS rule will take effect from July 2021.

TO WHOM DO THE NEW PROVISIONS APPLY

-All Companies who are liable to deduct TDS on Vendors

-Companies with a turnover of more than 10 crores who are liable to collect TCS from customers

 

WHAT DO THE PROVISIONS SAY?

Section 194Q (TDS) & Section 206C(1H) (TCS)

– Section 206C(1H) – w.e.f 01st July 2021, a seller with a turnover of more than Rs. 10 Cr in the previous financial year needs to collect 0.1% TCS on sale made to a resident buyer over and above 50 Lakhs

– Section 194Q – w.e.f 01st July 2021, a buyer having a turnover of over Rs. 10 Crore in a previous financial year need to deduct 0.1% TDS on purchase made from a resident seller over and above 50 Lakhs

Exemptions

Section 194Q shall not apply to a transaction on which:

(a) tax is deductible under any of the provisions of this Act; and

(b) tax is collectable under the provisions of section 206C other than a transaction to which section 206C(1H) applies.

Section 206AB – Escalated TDS & Section 206CCA – Escalated TCS

TDS is to be deducted and TCS is to be collected at twice the rate specified, or twice the rate in force or 5%, whichever is higher, if

– The person to whom payment is being made (Section 206AB) OR to whom the sale is being made (Section 206CCA) has not filed ITR for the last two FY for which the ITR filing deadline has expired, and

– In these two FY’s, TDS deducted and/or TCS collected of that person was Rs 50 thousand or more in each FY.

Exemptions

– Section 206AB shall not apply where the tax is required to be deducted under the following sections of the Act:

CHECKLIST FOR COMPLIANCE

*The above requirement (Pt 1 & 2) is not applicable to vendors.

Further, with ITR acknowledgements and PAN Number, you can search the ITR filing status on the Income-tax website – https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/ITRStatusLink.html?lang=eng

As evident from the above checklist, fulfilling compliance with these provisions is no mean task. The most cumbersome part of it would involve reaching out to all customers and vendors, endless follow-ups, validating the data, which is imperative to the compliance process. For large organizations, this could easily take weeks, putting their finance team under undue pressure.

With Firmway, you can save significant time and efforts by automating the entire process of collection of ITR acknowledgements and declarations. It will reach out to all your party, follow up with them, collect and validate the data through smart forms and give you a dashboard to track the response. This will ensure your compliance procedure is complete well within the deadline.

To get started, simply fill out this form and our representative will get back to you within 24 hours. In case of any specific questions, you can reach out to us at [email protected] or give us a call at 9769599848.
Budget 2021 On Corporate Finance

Budget 2021 On Corporate Finance

Budget 2021 On Corporate Finance

Budget measures: Direct and Indirect Tax changes

  1. Relief granted on dividend income earned by shareholders:
    1. Advance tax liability will now be computed on dividends only after declaration or receipt whichever is earlier;
    2. TDS exemption on dividends paid by SPVs to REITs and InvITs;
  2. TDS related provisions have been made more stringent:
    1. TDS at 0.1% to levied on the purchase of goods above INR 5 mn a year, where the turnover of the buyer exceeds INR 100 mn
    2. The rate of TDS/ TCS shall be higher than 2x actual rate, or 5%, in case of non-filing of ITR for the last 2 years
  3. Late deposit of employee contribution to labor welfare funds would not be allowed as a deduction to the employer.
  4. Tax Audit applicability based on turnover limit has been increased from INR 50 mn to INR 100 mn, with 95% of receipts and payments being digital;
  5. GST minor compliance changes – Form 9 substituted with self-reconciliation and Form 9C being scrapped.

Has the Budget made managing Corporate Finance somewhat easier?

  1. Relief on dividend income is a welcome move since this helps CFOs to pay dividends more tax-efficiently, making future investments in their companies more lucrative;
  2. Additionally, dividend relief to REITs and InvITs shows the government’s commitment to continue providing support to the conglomerates operating in real estate and infrastructure space (eg. Logistics);
  3. However, the government seems to be more and more unforgiving to defaults in TDS/ TCs norms. Companies/ CFOs ought to take note and ensure compliances accordingly;
  4. With easing of tax audit norms (both income and GST), it has reduced the compliance burden for smaller and subsidiary companies of larger MNC groups, whose turnover is within the limits, helping the CFOs to focus on running financing operations of the group.

Conclusion

CFOs ought to take note of the changes in the Budget and plan their next financial year accordingly. The budget may come off as somewhat bittersweet, however, relief in dividend provisions, including for REITs and InvITs, is an indicator for the government’s push to bring more investment into India. TDS provision becoming more stringent comes as no surprise given the current risk of non-compliance (monetary penalties in addition to the risk of prosecution of managerial personnel of the defaulting companies).

Atmanirbhar Bharat Abhayan – Benefits for MSME

Atmanirbhar Bharat Abhayan – Benefits for MSME

BENEFITS FOR MSME
DEFINITION OF MSME CHANGED (EXISTING AND REVISED DEFINITION OF MSMES)

Existing MSME Classification

Criteria: Investment in Plant & Machinery or Equipment

ClassificationMicroSmallMedium
Mfg. EnterprisesInv. < Rs. 25 lacInv. < Rs. 5 cr.Inv. < Rs.10 cr.
Services EnterpriseInv. < Rs. 10 lacInv. < Rs. 2 cr.Inv. < Rs. 5 cr.

Revised MSME Classification

Composite Criteria : Investment And Annual Turnover

ClassificationMicroSmallMedium
Manufacturing & ServicesInv. < Rs. 1 cr.
and
Turnover < Rs.5 cr.
Inv. < Rs. 10 cr.
and
Turnover < Rs.50 cr.
Inv. < Rs. 20 cr.
And
Turnover < Rs.100 cr.

Major Benefits for MSME

  • Collateral Free automatic loan to MSME up to 20% of entire outstanding credit as on 29th February 2020. Borrowers up to Rs 25 crore outstanding & turnover up to Rs. 100 crore are eligible. Loans for 4 years with a moratorium of 1 year of principal repayment. No guarantees required. Scheme can be availed till 31st October 2020.
  • CGTMSE with the support of 4000 Cr from Govt, will give partial credit guarantee to bank to allow them to give debt to promoters of MSME, who then will infuse the fund as equity.
  • 50,000 crore equity infusion for expansion of MSME through Funds of Funds.
  • Government will facilitate provision of Rs 20,000 crore subordinate debts for Stressed MSME which are NPA or stressed.
  • Receivables from Govt and CPSEs to be released in 45 days.
  • Global tenders will be disallowed in Government procurement tender upto Rs 200cr.
  • E market linkage for MSME to be promoted.

Tax Changes

  • All TDS and TCS rates reduced by 25% for Non-Salaried Resident Payments. Reduction is applicable from 14th May 2020 to 31st March 2021.
  • All refunds to non-corporate business & profession to be issued immediately.
  • All Income tax returns due date extended to 30th November 2020.
  • Tax audit due date extended to 31st October 2020.
  • All assessment getting barred on 30th September 2020 extended to 31st December 2020
  • All assessment getting barred on 31st March 2021 extended to 30th September 2021
  • Vivid Se Vishwas Scheme extended to 31st December 2020 without any additional payments.

EPF Benefits

Establishment Under Pradhan Mantri Garib Kalyan Package (PMGKP):

  • EPF relief extended for the month of June, July & August and will be paid by Government.

Other Establishment covered by EPFO

  • Statutory PF contribution of both employer and employee will be reduced to 10% from 12% for next 3 months (except CPSEs & PSU’s employer’s contribution).

NBFCs

  • Government will launch a Rs 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs. Under this scheme investment will be made in both primary and secondary market transactions in investment grade debt paper of NBFCs/HFCs/MFIs. Securities will be fully guaranteed by Government.
  • Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs/HFCs/MFIs. First 20% of loss will be borne by Government. AA paper & below will be eligible for investment.
  • PFC/REC to infuse liquidity of Rs 90,000 cr to DISCOMs against receivables
  • Central Public Sector Generation Companies shall give rebate to Discoms which shall be passed on to the final consumers (industries).

RERA

  • Treat COVID-19 as an event of ‘Force Majeure’under  RERA.
  • Extend the registration and completion date suo-moto by 6 months.
  • Regulatory Authorities may extend this for another period of upto 3 months, if needed.
  • Issue fresh ‘Project Registration Certificates’ automatically with revised timelines.
  • Extend timelines for various statuary compliances under RERA.

Contractors

  • PSU contracts to be extended for upto 6 months so that contract may be completed including for PPP contracts.

Balance Confirmation Letter

Balance Confirmation Letter

Illustrative of Balance Confirmation Letter to be sent to Debtors – Positive Form

[Letterhead of Entity]

[Date]

[Name and address of debtor]

Dear Sir,

For audit purposes, kindly confirm directly to our auditors (name and address of  the auditors) that  the balance of  Rs xx due by you as on ________ , as shown by our books, is correct. The details of the balance are as under: Note: In case the list of invoices forming the balance is too large, these details may not be given

Invoice NoDateOrder Reference / Acceptance / Tender No. etc.Amount
Total
Less : Advanced Received
Net Amount due by you
xxxx
(xxx)
xxxx

A stamped envelope addressed to our auditors is enclosed for your convenience.

If the amount shown is in agreement with your books, kindly strike-out the paragraph marked (B) below. If the amount shown is not in agreement with your books, kindly furnish the details in the proforma given in the paragraph marked (B) below and strike-out paragraph (A).

In either case, kindly sign at the place provided below and return this entire letter directly to our auditors in the enclosed envelope.

Your prompt compliance with this request will be appreciated.

Kindly return this form in its entirety.

Yours Faithfully,

 

(Signature of responsible official of the entity)


(Name and Address of entity)

(A) We confirm that the above stated amount is correct as at ______

OR

(B) We state that the above-stated amount is not correct as per our records. The details of the balance as at _________ as per our records are as below:

Invoice NumberDateOrder ReferenceAmount
xxxxxxxxxxxxxxxTotalxxxxxx
xxxxxxxxxxxxxxxLess : Advanced paid(xxxxx)
xxxxxxxxxxxxxxxNet Amount due from us(Rs)xxxxxx

Yours faithfully,

(Signature of debtor/responsible official)


Illustrative Balance Confirmation Letter to be Sent to Debtors Negative Form

[Letterhead of Entity]

[Date]

[Name and address of debtor]

Dear Sir,

For audit purposes, kindly write directly to our auditors (name and address of the auditors) if the balance of Rs. due by you as on _______ as shown by our books, is not correct, giving details of the differences. The details of the balance are as under:

Note: In case the list of invoices forming the balance is too large, these details may not be given

Invoice NoDateOrder Reference /Acceptance/ Tender No. etcAmount
Total
Less : Advanced Received
Net Amount due by you
xxxx
(xxx)
xxxx

If you do not notify our auditors of any difference within ten days of the date of this letter, it will be presumed that the balance stated above is correct.

A stamped envelope addressed to our auditors is enclosed for your convenience.

Yours faithfully,

(Signature of responsible official of the entity)


Source: Guidance Note on Audit of Debtors, Loans and Advances published in June, 1994 issue of ‘The Chartered Accountant’.

Use Firmway.in for obtaining balance confirmation in compliance with the Guidance Note.

MSME Form 1

MSME Form 1 – All that you need to know

MSME Form 1 – All that you need to know

 

What is the fuss around MSME Form 1?

MCA came with an order dated 22nd Jan 2019 that:

 

Every Company which has received goods or services from Micro & Small Enterprise

AND

Payment is due/ not paid to such enterprise for 46 days from date of acceptance

Shall file in MSME Form 1

Note:

  • Only Micro and Small Enterprise Suppliers are considered. Medium Enterprise suppliers are not considered as per the notification.
  • The 45 days calculation starts from the date of acceptance/deemed acceptance and not from the date the balance becomes due

 

Who is MSME?

MSME is classified into two categories:

  1. Manufacturing enterprise; and
  2. Service enterprise.

They are defined in term of investment in Plant and Machinery/ Equipment  as below

MICROSMALLMEDIUM
Manufacturing Enterprises< Rs 25 Lacs< Rs 5 Crs< Rs 10 Crs
Service Enterprises< Rs. 10 Lacs< Rs 2 Crs< Rs 5 Crs

 

Note: Only registered enterprises having valid MSME certificate shall be considered. Udyog Aadhar is also considered as MSME registration.

 

What is MSME Form 1?

A Half yearly return to the Ministry of Corporate Affairs stating the following:

  • Name of Supplier,
  • PAN of Supplier
  • Amount Due*
  • Date from which such amount is due
  • Reasons for Delay (Generic) (eg – Credit period>45 days, Goods in Transit, Material rejected/returned, etc)

Note:

  • Here the details like amount and date are with respect to the due date and not the date of acceptance.
  • For example, an MSME vendor delivered you goods on 1/12/18. The credit period is 60 days. Hence you have to report this vendor in MSME form 1 since it is more than 45 days as on 22/1/19. However, the amount due would be Nil and date from which such amount is due – 30/01/2019.

 

What is the due date?

Filing PeriodDue date of Filing
Initial Return (Payable for more than

45 days as on 22nd Jan 2019)

30th May 2019
From April to September31st October
From October to March30th April

 

Note: Only the first return is an “as on 22nd Jan 2019” return. For regular returns post that, you have to report all the MSME vendors to whom the payment was not made within 45 days from the date of acceptance in the said period.

 

How do we do it?

Step 1: Go through your list of vendors to whom Payment is due/ not paid for 46 days from date of acceptance

Step 2: Identify the list of vendors you think can be MSME

Step 3: Send them MSME confirmation asking whether they are MSME as on the said date. And if yes, ask them to attach their registration certificate as on the said date

Step 4: Once you receive the certificate, furnish their details in Form MSME -1

 

Is it Mandatory to file MSME Form 1?

Yes.

Is there any Penalty?

Yes

  • On Nonfilling or
  • On Knowingly furnishes incorrect/ Incomplete Information.

 

ParticularsPenalty
On defaulting companyExtended Up to  Rs. 25,000/-
Every Officer who is in default

(Directors, CFO and CS)

Minimum Fine Rs. 25,000/- which may extend to Rs. 3,00,000/-

Or

Imprisonment which may extend to 6 Months

Or

Both

 

What if I missed the due date?

Don’t Worry! MCA is currently allowing (as on 6/6/2019) filling of MSME Form 1 – Without Penalty.

 

What if I missed filling some vendors in the return?

Don’t worry! You can file another return for the same period with the vendors you missed in your earlier return

 

Is there any software which can easily get MSME confirmation from all Vendors?
The Firmway tool can allow the companies to manage their entire MSME confirmations for one time and recurring return. Just upload a simple excel file with Vendor Name, Email Id and mobile number. The software will automatically trigger email and SMS to every vendor, do a rigorous follow-up and provide a real-time dashboard.

Know more about it – firmway.in

Links:
MCA Notification – http://www.mca.gov.in/Ministry/pdf/MSMESpecifiedCompanies_22012019.pdf

MCA Form Download – http://www.mca.gov.in/MCA21/dca/downloadeforms/eformTemplates/NCA/Form_MSME_help.zip

 

Disclaimer:

All Readers are advised to refer relevant provision of law before applying or accepting any of the point mentioned above or not. The author accepts no responsibility whatsoever and will not be liable for any losses, claims or damages which may arise because of the contents of this write-up.

Price Waterhouse banned from auditing listed firms for 2 years

One of the most unprecedented order in the country “Price Waterhouse banned from auditing listed firms for 2 years”

One of the most unprecedented order in the country “Price Waterhouse banned from auditing listed firms for 2 years”

SEBI on January 10, 2018, has barred all 11 Price Waterhouse (PW) firms practicing as Chartered Accountants in India from issuing audit certificates and compliance certificates for listed companies and intermediaries for two years.

SEBI has also imposed penalty of Rs.13 crores along with 12% interest in wrongful gains by Price Waterhouse and its two erstwhile partners S Gopalakrishnan & Srinivas Talluri

Few findings from the investigation carried out by SEBI in Satyam Computers Services Limited (SCSL) wherein “systemic problem” in the audit processes were noted, have been excerpted below:

  1. Inflated cash/bank balances of Rs 5,040 crores:
  • The auditors did not carry Independent verification of bank statements and fixed deposit.
  • The auditors did not maintain necessary control over the process of sending and receiving balance confirmations from banks directly in complete disregard of the Auditing and Assurance Standards (AAS) prescribed by ICAI.
  • Even a single copy of balance confirmation request was not sent by them directly to the Bank of Baroda, New York Branch (75% of all current account balances).
  • They chose to rely on the balance confirmations received from SCSL which had glaring anomalies and huge differences without any further examination or inquiry into the matter and ignored the balance confirmations received directly from banks which were showing true balances.
  1. Inflated sales revenues using 7,588 fake invoices: Sales revenues in the audited accounts were inflated by accounting for 7,561 fake invoices raised in respect of fake transactions and 27 invoices with respect to non-existent customers. 
  1. Overstated debtors’ position by Rs.490 crores: The auditors, while conducting the audit of SCSL did not seek external confirmation of debt from the debtors in violation of its own audit manual and various provisions in AAS and the Guidance Note on Audit of debtors, loans, and advances.

SEBI’s order comes into force with immediate effect but for removal of operational difficulties, the order will not impact audit assignments for FY 2017-18. However, Price Waterhouse has said that it is confident of obtaining a stay against the SEBI order.

SEBI’s Order

SEBI has set a strong message that wrong practices and market abuse would not be tolerated in India. We at Firmway strongly believe in supporting auditors in complying to the Auditing Standard as external confirmations are extremely powerful audit practice and are more reliable audit evidence. Over past two years, we have built a robust high-quality audit tool which helps auditors in getting direct confirmation from the parties. Further, to identify and fake entities we also provide verification service. To know more about our services please visit  firmway.in

Audit Confirmation

Audit Confirmation Pitfalls & How Firmway Offers A Better Way

Audit Confirmation Software

In the realm of financial audits, undoubtedly, audit confirmation plays a crucial role by verifying the accuracy of financial statements and thereby ensuring the credibility of an organization’s financial position. In addition, they act as a fundamental tool for auditors to confirm the existence, ownership, and accuracy of various financial balances and transactions. However, the traditional manual processes used to obtain these confirmations often come with significant challenges that can impact the reliability and efficiency of the audit.

The Importance of Audit Confirmations

Audit confirmations are vital for maintaining the integrity and accuracy of financial reports. They provide external evidence that supports the reported balances and transactions; therefore, they help auditors verify that the financial statements accurately reflect a true and fair view of the organization’s financial position. Moreover, this evidence enhances the overall reliability of the financial reporting. Confirmations are particularly important in detecting and preventing fraud; moreover, they offer an additional layer of validation. This extra layer can, in turn, uncover discrepancies or fraudulent activities.

Despite their importance, the process of obtaining confirmations through manual methods can be fraught with difficulties. Furthermore, the flaws inherent in these manual processes necessitate a more effective and efficient solution. Consequently, this is precisely where Firmway’s audit confirmation software comes into play.

Audit Confirmation

Common Pitfalls of Manual Audit Confirmation

  1. Human Error: Manual audit confirmation processes are highly susceptible to human error. Errors can occur during data entry, sending out confirmation requests, or interpreting responses. These mistakes can lead to inaccurate confirmations, which may compromise the audit’s overall reliability and the accuracy of financial statements.
  2. Time-consuming and Inefficient:  The manual process of obtaining audit confirmations is often slow and labor-intensive. It involves preparing confirmation requests, sending them out, tracking responses, and following up with non-respondents. This lengthy process can delay financial reporting and affect the timely completion of audits.
  3. Verification Difficulties: Verifying the identity of the confirmer is a critical aspect of the confirmation process. Manual methods often lack robust verification mechanisms, making it challenging to ensure that responses come from legitimate and authorized sources. This can increase the risk of fraud or misrepresentation.
  4. Inconsistent Follow-Ups: Follow-ups are essential to obtaining confirmations, but manual follow-up processes can be inconsistent and unreliable. This can result in incomplete confirmations and gaps in audit evidence, making it difficult for auditors to draw accurate conclusions.
  5. Data Security Concerns:  Manual handling of sensitive financial information poses significant security risks. Physical documents are vulnerable to loss, theft, or damage, while electronic communications may be susceptible to unauthorized access. These risks are heightened in a manual setup, where security measures may be inadequate.

How Firmway’s Audit Confirmation Software Addresses These Pitfalls

Firmway’s audit confirmation software offers a comprehensive solution that addresses the challenges associated with manual methods. By automating and streamlining the confirmation process, Firmway enhances accuracy, efficiency, and security.

1. Enhanced Accuracy and Reduced Errors

Firmway’s software minimizes human error by automating data entry and processing. Moreover, the platform ensures that all confirmation requests are accurately prepared and sent. Additionally, responses are systematically recorded and analyzed. Consequently, this automation reduces the likelihood of mistakes and ensures that confirmations are reliable and accurate.

The software also includes built-in error-checking mechanisms that flag inconsistencies or potential issues. Consequently, auditors can address them promptly. Moreover, this level of accuracy is crucial for maintaining the credibility of financial reports and ensuring that audit conclusions are based on reliable evidence

2. Accelerated Confirmation Process

The traditional manual process of obtaining confirmations is often slow and cumbersome. However, Firmway’s automated platform significantly speeds up this process by streamlining workflows. Furthermore, it reduces the time required to obtain confirmations, thus enhancing overall efficiency.

Automated features include the ability to send bulk confirmation requests, track responses in real-time, and manage follow-ups efficiently. Consequently, this acceleration not only helps meet tight financial reporting deadlines but also enhances the overall efficiency of the audit process. Furthermore, by streamlining these tasks, your team can focus on more strategic aspects, ultimately improving overall productivity.

3. Robust Verification Mechanisms

Firmway’s software includes advanced verification features that ensure the legitimacy of the confirmer. The platform uses sophisticated algorithms and authentication methods to verify the identity of the responder, providing confidence that confirmations are received from authorized and legitimate sources.

This robust verification process helps reduce the risk of fraud and ensures that the confirmations obtained are valid and reliable. Additionally, it enhances the overall security of the confirmation process, thereby protecting sensitive financial information from unauthorized access. Furthermore, this approach reinforces the trustworthiness and integrity of the entire system.

4. Automated and Consistent Follow-Ups

Follow-up is a critical component of the audit confirmation process, particularly for obtaining responses from non-respondents. Firmway’s software automates follow-up communications, ensuring that all outstanding confirmations are pursued systematically and consistently.

The platform can schedule and send automated follow-up requests at predefined intervals, significantly improving response rates and reducing the likelihood of incomplete confirmations. This automation ensures that auditors receive the necessary evidence to support their conclusions and complete the audit effectively.

5. Enhanced Data Security

Data security is a top priority for Firmway’s audit confirmation software. The platform employs advanced security measures, including encryption and secure communication protocols, to protect sensitive financial information throughout the confirmation process.

By leveraging these security features, Firmway ensures that all data remains confidential and protected from unauthorized access. This enhanced security reduces the risk of data breaches and ensures that audit confirmations are handled with the highest level of security.

Types of Confirmations Supported by Firmway

Firmway’s software supports a wide range of audit confirmations, making it a versatile tool for auditors across various industries. The types of confirmations include:

  • Debtor Confirmations: Verifies amounts owed by customers, ensuring that receivables are accurately reported in the financial statements.
  • Creditor Confirmations: Confirms outstanding liabilities, providing assurance that payables are correctly stated.
  • Loan Confirmations: Validates the existence and terms of loans, ensuring that both assets and liabilities are properly recorded.
  • Stock Confirmations: Confirms stock levels and values, helping to verify inventory balances.
  • Bank Balance Confirmations: Verifies cash and bank balances, ensuring that financial statements reflect accurate cash positions.

Why Choose Firmway’s Audit Confirmation?

Firmway’s audit confirmation software offers a modern solution to the challenges of manual confirmation processes. By automating and enhancing the confirmation process, Firmway provides a more reliable, efficient, and secure alternative that meets the needs of today’s auditors and organizations.

Choosing Firmway means embracing a smarter approach to audit confirmations—one that reduces risks, improves efficiency, and enhances the credibility of financial reports. With Firmway, auditors can confidently conduct their work, knowing that they have a powerful tool to support their efforts.

To experience the benefits of Firmway’s audit confirmation software, register here: https://app.firmway.in/register

Firmway helps to enhance the credibility of financials, detect and prevent frauds to uphold the interests of the various stakeholders.

Confirmations being an important source of authentication for the various stakeholders, the various flaws associated with the manual process had to be mitigated. To ensure a flawless and effortless process of obtaining confirmations, an effective and proficient platform was obligatory—this led to the birth of FIRMWAY. The unique verification process makes it the best way of obtaining confirmations.

Types of confirmations taken:

  • Debtor
  • Creditor
  • Loan
  • Stock
  • Bank Balance

Firmway sends the Confirmation, Verifies the Confirmer, carries out regular follow-ups with the Confirmer and Summarizes Responses.

To Register please click here: https://app.firmway.in/register

Balance Confirmations

Balance Confirmations Simplified: A New Approach For Finance Departments

Balance Confirmations: A Never-Ending Nightmare for the Finance department

Financial year closure ensures that the accounts team is occupied with winding up their chef d’oeuvre, “Financials.” However, the idea itself of obtaining manual #confirmations from debtors, creditors, and banks proves to be one of the culprits for undesirable hitches. The reason is that Firmway has, therefore, come up with a process that, consequently, has made the Balance Confirmations process easy.

Challenges Faced During Financial Year Closure

The finance team often finds confirmation tasks daunting, involving hundreds of confirmations, thousands of follow-ups, and countless minutes spent on calls. Although the ever-increasing #audit pressure is capable of driving an individual insane,.

Balance ConfirmationsThe Daunting Task of Manual Balance Confirmations

If the individual survives the above-stated stages along with unrealistic excuses like person not being in place, attending meeting, on leave, having system issues, having a tight schedule, etc., he is then exposed to the challenges of pursuing and closing the unreconciled differences by re-contacting those parties, asking ledgers, tallying line items, finding differences, communicating it, discussing it, negotiating them, and finally closing it.

The Pressure of Audit and Its Impact

The story doesn’t conclude at closure unless one has completed that one thing the whole world approves of: #‘Documentation’.

In spite of hundreds of days of hard work, the manual process leaves rooms for errors, fraud, etc.

And by the time the whole cycle is about to complete, confirmations for the next quarter already in awaiting actions.

Introducing Firmway: Your Solution to Balance Confirmations  Challenges

Are you facing similar problems?

Not to worry anymore, a young team of chartered accountants, in support of senior professionals of the fraternity, has come up with unique software to streamline the entire process: “FIRMWAY”— Balance Confirmations were easy.

How Firmway Simplifies the Balance Confirmation Process

Firmway seamlessly integrates with your accounting software, handling confirmations, timely follow-ups, balance reconciliation assistance, and providing real-time dashboard monitoring.

Technology enhances confirmation legality with verified parties, authorized responses, and IP tracking, at an affordable cost.

Prashant Gupta

Co-founder | CEO

FIRMWAY

Visit www.firmway.in or email at [email protected] for a quick web demo or a physical demo.

GSTR-3B

GSTR-3B Return Filing: Expert Tips And Guidelines You Need To Know

GSTR-3B: Insights

The government has published the GSTR-3B format for filing #GST returns for the months July’17 and Aug’17.

Furthermore, to ensure a smooth rollout of GST and address industry concerns about return filing, authorities decided that businesses would pay taxes based on a simplified return (Form GSTR-3B) during the first two months of GST implementation. Additionally, this form includes a summary of both outward and inward supplies, which businesses must submit before the 20th of the following month.

Moreover, the GSTR-3B form simplifies the filing process. Registered persons must submit consolidated details in a simplified manner as notified.

Introduction to GSTR-3B

The monthly GST return form effectively simplifies the GST return filing process by consolidating taxable values and tax amounts for outward and inward supplies, input tax credit, and other essential GST transactions. Furthermore, it provides a comprehensive overview of financial transactions within a specified period, ensuring accuracy and compliance with GST regulations. Additionally, this streamlined approach facilitates easier reconciliation and auditing, thereby enhancing overall transparency and accountability in tax reporting

Importance of Timely Filing

Timely filing of GST returns is crucial to avoid penalties and interest charges. Moreover, compliance with filing deadlines ensures financial discipline and prevents additional costs. Furthermore, adhering to these timelines helps maintain smooth business operations and enhances regulatory compliance.

Details to be furnished in Form GSTR-3B is as follows:

1. Outward and Inward Supplies

The tax filing form mandates that taxpayers report consolidated taxable values and tax amounts for both outward and inward supplies, including supplies liable under the Reverse Charge Mechanism (RCM). Additionally, it underscores the necessity of accurate reporting to maintain compliance with tax regulations. Furthermore, this reporting requirement ensures transparency in financial transactions and aids in preventing tax evasion.

2. Inter-State Supplies

Details of inter-state supplies made to unregistered persons, composition taxable persons, and those holding Unique Identification Numbers (UIN) must be reported in the GST return filing form applicable to such transactions.

3. Input Tax Credit

Eligible input tax credit can be claimed based on the transactions reported in GSTR-3B, subject to compliance with GST rules and conditions.

4. Exempt, Nil-rated, and Non-GST Inward Supplies

Accurate reporting of exempt, nil-rated, and non-GST inward supplies in GSTR-3B ensures compliance with GST regulations.

5. Payment of Tax and GST TDS/TCS Credit

The GST return form also requires taxpayers to provide details regarding the payment of tax and GST TDS/TCS credits, ensuring comprehensive reporting of financial transactions under GST.

GST returns will have to be filed for the months of July and August 2017 as per the timeline given below:

GSTR-3B

Firmway’s Role in Assisting with GSTR-3B

Firmway assists businesses in aligning with vendors and customers, thereby ensuring timely filing of their first GST return within a week. As a result, this prevents unintentional interest costs, helping businesses maintain financial efficiency and compliance

Conclusion

The simplified GST compliance process for businesses not only facilitates but also streamlines the return filing process. Moreover, timely and accurate filing is essential to avoid penalties and maintain compliance with GST regulations.

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