This reminds me a case of one India Tobacco Limited in 1071 or so. The Balance Sheet Containing the situation like this.
There was a requirement of Gratuity provision , amount had to be declared , has to me made in Books of Account , not as a contingent liability.
Reserve and Surplus Rs 00000 Crores.
Note in Accounts
Reserve of Rs 000000 is sufficient to meet with Gratuity Liability of a sum of Rs 0000 .
This was a question raised during my article ship. I asked the question to out Senior most Director of Board of Studies respected Shri Mr Majumdar/ Majumdar , Majmudar or so. He rightly stated this is a provision out side books of account. When you specify a sum against a som of rupees specifically is a provision only. Such were the faculties in our Board of Studies who gives a full guidance to students correctly and properly . He also gave me some assurance to guide all the time and whenever you raise the question.
The Auditor was Price Water House of Kolkata. Not PWC . I also raised the question Before the Company also. In the next year Balance Sheet the same note was deleted from accounts.!!!!!
The Auditor was Price Water House of Kolkata. Not PWC . I also raised the question Before the Company also. In the next year Balance Sheet the same note was deleted from accounts.!!!!!
When I raised this question Before one C C M , Now Late, the then, I was scolded like , Do you know that such a big firm can make a mistake ? Without applying any mind in the situation , the answer was given with Due respect to such a big firm??
One should always try to learn from the life as a teaching and experience. Try to develop your mind. You will be master in the field , this is a direct message to Learner and new in the field of C A.
No body will teach you inherently internally.
Shah D J
On Tuesday, 26 May 2015 1:16 PM, "CMA Ramesh M Joshi ramojoshi@gmail.com [ICAI_CIRC_MEERUT_CA]" <ICAI_CIRC_MEERUT_CA@yahoogroups.com> wrote:
Dear CAs - CMAs[Including Hon Presidents of ICAI-CA & ICAI-CMA]Following Query is based on records and contents of Statutory Financial books of Accounts of The ICAI-CMA-WIRC.Query :Can Annual Financial Accounting Statements based on such Books of Accounts as described below be considered Properly Drawn and supporting Statutory Books of Accounts being maintained properly :==================There were Three Office Bearers [OBs] of Statutory Professional Accounting Institute The ICAI-CMA-WIRC namely :Chairman, Vice Chairman, and Hon Secy & Treasurer;The OBs claimed that Cash on hand was found short on 31-03-2004;There was no record available to support this claim, however since it is made by Responsible OBs, ASSUMING [for the sake of convenience] that this claim is VALID and LEGITIMATE, I would request you to evaluate following facts including ACTION TAKEN by OBs;[1] Some one [presumably the OBs] asked the Staff to "Recoup" the short cash;[2] Staff did "Recoup" the concerned amount;[3] With this WIRC's Cash on Hand should have tallied with Book Balance;And the matter should have been over. To my mind it was absolutely correct way of tackling the issue [leaving aside the aspect of taking action against concerned employee].What Happened :WIRC issued a Cash Receipt to Employee in respect of "Recouped" cash.Being basically B.Sc. qualified, I am NOT a student of Commerce Faculty, per se. But on basis of what I understand based on my studies in CMA Curriculum is as follows :Illustration :IFActual Physical Cash Balance : Rs.10,000/=AND Book Cash Balance : Rs.10,500/=The Cash on Hand is Short;When Staff puts in Rs.500/=Cash on Hand becomes Rs.10,500/=and matches with Book Balance.But when a Receipt is issued for Rs.500/= Then the Book Balance becomes 11,000/=Cash Balance AFTER payment by Staff will be Rs.10,500/=It STILL LEAVES Cash on Hand Short by Rs.500/=Qs are :[1] Why receipt could have been issued to Staff when what was being done is "Recouping the Cash on hand found short"?[2] And once the Receipt is issued[2] [a] How could the Cash Balance Match with Book Balance ?[2] [b] How could the Statutory Financial Auditor [SFA] have been "Satisfied" with correctness of Cash Records - Cash Balance ?[2] [c] How could the Trial Balance have tallied when there was difference in Petty Cash of rs.500/= ?[2] [d] Could something have been shown as "Cash Suspense Account" !?[2] [a] OR could some "Creative Accounting" have been used to "Match the "Trial Balance"? What could it be? Would it be acceptable to SFA?If you would like to have some more information to enable you give opinion, please let me know. I will provide the same with pleasure, ASAP._____CMA Ramesh M JoshiM : +91.9594913752Twitter : @JoshiCMAWhatsApp : +91.9594913752
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Satyam Eva Jayate……..Only The Truth Triumphs
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Posted by: Dipak Shah <djshah1944@yahoo.com>
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