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Audits Under PCAOB Standards

A yearly audit is a key safeguard for your money and a planning tool for the year ahead. Think of it as a “year in review” for your finances.

The primary benefit of an annual audit under PCAOB standards  is the confidence it gives you and your members that the PTO’s financial house is in order. Basically, the audit verifies the numbers, ensures accuracy, and assesses procedures. A comprehensive audit also identifies internal controls that should be implemented to improve the integrity of your financial systems. Furthermore, the audit gives closure to the treasurer and sets a starting point for the new year’s activity. An audit is also the primary tool for uncovering financial mismanagement. Hopefully you won’t need to conduct an audit for this reason, but an annual audit can uncover problems before they become significantly more serious. Your PTO might also choose to include in your audit a review of how closely your group’s income and expenditures matched the year’s budget. This type of review can be a strong planning tool.

 

The audit is not within the jurisdiction of the PCAOB. This seems like a strange request.  Perhaps the client is a clearing agency or futures commission merchant registered with the Commodity Futures Trading Commission, which requires that entities registered with it have an audit performed in accordance with PCAOB standards. Maybe the client has entered into a contractual agreement that requires an audit conducted under PCAOB standards. Or maybe, for whatever reason, the client just wants an audit conducted under PCAOB standards.

 

The PCAOB determines which audits are within its jurisdiction, including audits of the financial statements of issuers and nonissuer brokers and dealers registered with the SEC. A regulator (other than the PCAOB) requiring that the audit be conducted in accordance with PCAOB standards does not make the audit fall within the jurisdiction of the PCAOB. Therefore, even though the regulator— for example, the CFTC— requires an audit to be conducted in accordance with PCAOB standards, that audit is required to also be conducted in accordance with GAAS.

 

The Auditor’s Report

The report from the auditor will mark the completion of the review. If you are using volunteers, you should clearly itemize what you expect back, so your auditors know when they have completed their job.

Ensure that your auditor has returned the files you provided, and file the original report in the PTOs permanent archives. At the first meeting of the new school year, you should present the auditors report and move that it be adopted. According to Robert’s Rules of Order, once the annual report of the auditor is adopted, it is no longer necessary to move to adopt each month’s treasurer’s report. The reports are presented and then simply filed for next year’s audit.

Related Things you should Know before Registering a Company in India

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What is Subsidiary Company in India

Subsidiary company is any company whose interests are held and controlled or held by another company. Paid up equity share capital and preference share capital of the subsidiary company can be used to determine the holding company, subsidiary company relationship between two companies.

 

What is a Subsidiary Company?

There’s often a lot of confusion regarding the position of the subsidiary company and what it does. A subsidiary company is a company that is either owned or owned in part by another company. The company that owns the subsidiary is known as a parent company or a holding company. It should be noted that a holding company does slightly differ from a parent company, though.

 

What is WOS (Wholly Owned Subsidiary)

When one company is 100% owned by another company, it is called Wholly Owned Subsidiary of the company who had made 100% investment in it.

 

How To Set Up a Subsidiary

To setup one of these companies, you only need a sole director. The requirement for a company secretary was waived some years ago. The only restriction is that the sole director cannot then act as the company secretary. When you register as a sole director, you will enter both your residential address and a service address. Only the service address will appear in the public records.

The key here is that in the various documentation you submit regarding shareholders you will have both an individual director and another company as a shareholder. You are prohibited from having an entire company owned by another company.

Once you submit the documents, you will have a decision within 24 hours from Companies House.

 

Conclusion

Opening up a subsidiary isn’t a decision that you should take lightly. It isn’t always necessary and it may be better to simply open a different company from scratch. You have to make this decision by yourself. And it may be better to employ a professional agent to help with the opening of your subsidiary.

 

Know more about how to register company in India

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How GST Works in India

GST is a type of value added tax and a proposed comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian central and state governments. Further, the Goods and Service Tax (GST) is considered to be one of the biggest reforms in India’s indirect tax structure.

 

THE NEED FOR GST

Suppose Mr. A sells goods to Mr. B and charges sales tax; then Mr. B re-sells those goods to Mr. C after charging sales tax. While Mr. B was computing his sales tax liability, he also included the sales tax paid on previous purchase, which is how it becomes a tax on tax.

 

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This was the case with the sales tax few years ago. At that time, VAT was introduced whereby every next stage person gets credit of the tax paid at earlier stage. This means that when Mr. B pays tax of Rs. 11, he deducts Rs. 10 paid earlier.

Similar concept came in Excise Duty and Service Tax also, which is called Cenvat credit scheme. To a huge extent, the problem of cascading effect of taxes is resolved by these measures.However, there are still problems with the system that have not been solved till date.

 

GST will solve this problem. Let us see how.

 

  • Sale in one state, resale in the same state

In the example illustrated below, goods are moving from Mumbai to Pune. Since it is a sale within a state, CGST and SGST will be levied. The collection goes to the Central Government and the State Government as pointed out in the diagram. Then the goods are resold from Pune to Nagpur. This is again a sale within a state, so CGST and SGST will be levied. Sale price is increased so tax liability will also increase. In the case of resale, the credit of input CGST and input SGST (Rs. 8) is claimed as shown; and the remaining taxes go to the respective governments.

     

  •  Sale in one state, resale in another state

In this case, goods are moving from Indore to Bhopal. Since it is a sale within a state, CGST and SGST will be levied. The collection goes to the Central Government and the State Government as pointed out in the diagram. Later the goods are resold from Bhopal to Lucknow (outside the state). Therefore, IGST will be levied. Whole IGST goes to the central government.

 

  • Sale outside the state, resale in that state

In this case, goods are moving from Delhi to Jaipur. Since it is an interstate sale, IGST will be levied. The collection goes to the Central Government. Later the goods are resold from Jaipur to Jodhpur (within the state). Therefore, CGST and SGST will be levied.

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Online Services May Face Google Tax

The digital space has grown rapidly in the past few years and is expected to grow substantially in next few years too. The biggest beneficiaries of this rapid growth in the digital space are companies earning through digital ads like Google,Facebook,Twitter,LinkedIn etc.

 

Moreover, these companies are located outside India, and hence they are not even subject to any taxes in India. These new business models have created new tax challenges by challenging the current manner of levy of tax which are based on the presence based on permanent establishment rules..
The ‘Google Tax’ or ‘Facebook Tax’ which was first announced in the FY17 budget statement by Finance Minister Arun Jaitley will be levied from June 1. Here’s all you need to know about it — what Google Tax is, who will pay it, and its implications —

As the name suggests, it’s got something to do with e-commerce companies.

 

The Google Tax was announced to introduce a tax on the income as accrue to a foreign e-commerce company outside of India. Google Tax or ‘equalisation levy’ as it’s called in India, is expected to impact the bottomlines of giants like Google, Facebook, and others.

 

Why has the tax been introduced?

The tax has been aimed at technology companies that make money via online advertisements. Their revenue is mostly routed to a tax haven country. This tax will help bring the said companies under the tax radar in India. With this new tax, India has also joined the list of other Organisation for Economic Cooperation and Development (OECD) and European countries where a similar tax is already in place.

 

The government has earned Rs.100 crore in revenue on account of the equalisation levy so far. Companies like Facebook, Yahoo, Twitter and Google earn significant revenues from India from local advertisers. A committee set up by the Central Board of Direct Taxes to examine indirect taxation in India of e-commerce had recommended an equalisation levy of 6-8 per cent on 13 broad services based on the OECD’s Base Erosion and Profit Shifting guidelines.