These days are the days for finalization of the Books of Accounts for Listed companies and for Closing of Books and Account as well as for the Auditing Purpose following things are required to kept in mind, there are certain things to be considered being COVID19 Scenario which are as follows this is checklist as well as Auditors observation considerations:-
| Disclosures regarding provision for Loss due to COVID. | Disclosures for Lease rentals as there will be change in Discount rates due to COVID-19 Effect. |
| Contingent Liability with respect to COVID Outbreak. | Disclosures for Impairment of Assets due to COVID-19 Effect. |
| Disclosures related to Physical verification of Stock under COVID. | Extraordinary Expenses on account of COVID-19 to be disclosed Separately. |
| Disclosures related to Going Concern (If Effected due to COVID-19) | Expenses related to COVID-19 such as Sanitizer, Gloves, Mask for Employees are deductible Expenses. |
| Disclosures related to Property, Plant and Equipment (PPE) – AS10 |
Further following are the checklist for Normal Transaction and also important to cover: –
| No entry on national holiday. | Licence fee – receipt or covering letters of licence copy. |
| Confirmation of secured loans. | Tel. Exp. – bill of 12 months entered or not. Narration similar to that of electricity exp. |
| Confirmation of unsecured loans. | Depreciation entries. |
| Confirmation of sundry creditors (especially those with debit balance.) | Tally TDS certificates with relevant ledgers. |
| Confirmation of sundry debtors (especially those with credit balance) | Tally TDS returns with relevant ledgers. |
| Bonus sheet to be tallied with bonus paid in cash and by cheque. | Reconcile all bank accounts. |
| Check cash for negative balance. | Gross Profit rate comparison with last year. |
| Electricity charges for 12 months entered or not. | Audit fee to be entered. |
| Salary sheet – tally with salary paid in cash & cheque. Salary of employees who have not signed salary sheet should reflect as payable. Tally with salary summary for whole year. | Check cash exp. Vouchers. |
| Copy of all full & final a/c papers required. | Check all debit notes / cr. Notes. Should be signed |
| Insurance exp. – pre-paid entries to be done. Copy of all cover notes to be kept in balance sheet file. | Check all cash receipts. Should be signed |
| Other pre-paid exp. Entries like licence fee, AMC etc. | Check all discounts to customers or short & excess or bad debts vouchers. Should be signed |
| Tally opening balance with last year balance sheet. | All heads in previous year Profit & Loss, trading balance sheet should be in current year balance sheet and comparison of amount to be done. |
| Reconcile sale + purchase with GST returns. | Challans of all govt. Dues to be enclosed with ITR, GST, ESI, EPF, TDS etc. |
| Transfer previous year pre-paid to relevant expense head. | Exp. Payable entries: tel., electricity, water etc. |
| Check payment of previous year expenses payable. |
Also following are the disallowed Expenses, which needs to be checked and to be excluded in calculating the Tax:-
| Cash payments Exceeding Rs. 10,000/- Per Day Per Person (Except Certain Excluded Transactions) | Gratuity Provision |
| On Default of TDS Payment/ Equalization Levy | Donations |
| Depreciation under Companies Act | Personal Expenses of Director |
| Bonus Provision | Lost or Stolen Articles |
Disclaimer: – The information compiled from understanding and personal observation of The Income Tax Act, 1961 and The Companies Act, 2013 and are updated till the date of Publish of this document i.e. on 21st June, 2020, any further changes due to subsequent notifications shall accordingly be applied, The Author and publisher disclaim any liability in connection with use of this information.
Chartered Accountant and Experienced Professional with a demonstrated history of working in the financial services industry.