Internship_report.docx

“ INTERNSHIP REPORT” Bachelor of Management Studies Semester V Submitted In Partial Fulfilment of the requirements For the Award of Degree of Bachelor of Management Studies By DIKSHA DINESH YADAV 4361 MAHATMA EDUCATION SOCIETY’S PILLAI COLLEGE OF ARTS, COMMERCE AND SCIENCE, SECTOR-16, NEW PANVEL - 410206

DECLARATION

I, DIKSHA DINESH YADAV the student of T.Y.B.S. Semester V(2016-2017) hereby declare that I have completed the internship report. The information submitted is true and original to the best of my knowledge.

DIKSHA DINESH YADAV 4361

MAHATMA EDUCATION SOCIETY’S PILLAI COLLEGE OF ARTS, COMMERCE AND SCIENCE SECTOR-16, NEW PANVEl

MAHATMA EDUCATION SOCIETY’S PILLAI COLLEGE OF ARTS, COMMERCE AND SCIENCE, SECTOR-16, NEW PANVEL – 410206

CERTIFICATE This is to certify that Ms. DIKSHA DINESH YADAV, Roll no.4361 of Third Year B.M.S, Semester V(2016-2017) has successfully completed the internship report under the guidance of

Course Coordinator

_____________________________ Project Guide/Internal Examiner

_________________ External Examiner

___________ Principal

ACKNOWLEDGEMENT To list who all have helped me is difficult because they are so numerous and the depth is so

enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the completion of this project. I take this opportunity to thank the university of Mumbai for giving me chance to do this project. I would like to thank my principal, _____________ for providing the necessary facilities required for completion of this project. I take this opportunity to thank our coordinator ______________,for her moral support and guidance. I would also like to express my sincere gratitude towards my project guide_____________ whose guidance and care made the project successful. Lastly , I would like to thank each and every person who directly or indirectly helped me in the completion of this project especially my parents and peers who supported me throughout my project.

No

Name of the topic

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Chapter 1- Organisation

An organization or organisation is an entity comprising multiple people, such as an institution or an association, that has a collective goal and is linked to an external environment. The word is derived from the Greek word organon, which means "organ". The Institute of Chartered Accountants of India (ICAI) is the national professional accounting body of India. It was established on 1 July 1949 as a body corporate under the Chartered Accountants Act, 1949 enacted by the Parliament(acting as the provisional Parliament of India) to regulate the profession of Chartered Accountancy in India. ICAI is the second largest professional Accounting & Finance body in the world in terms of membership, after American Institute of Certified Public Accountants. ICAI is the only licensing cum regulating body of the financial audit and accountancy profession in India. It recommends the accounting standards to be followed by companies in India to The National Financial Reporting Authority (NFRA) and sets the accounting standards to be followed by other types of organisations. ICAI is solely responsible for setting the auditing and assurance standards to be followed in the audit of financial statements in India. It also issues other technical standards like Standards on Internal Audit (SIA), Corporate Affairs Standards (CAS) etc. to be followed by practicing Chartered Accountants.

Sundaram seshan & associates is working as a Chartered Accountant firm under the rules and regulations and code of ethics designed for CA firms by ICAI (The Institution of Chartered Accountants of India).

Vision To be the most highly respected professional firm in the region where clients come for the peace of mind that their interests are being cared for by a team that enjoys working with them and one another.

Mission To provide businesses, entrepreneurs and individuals with the highest quality accounting, auditing, tax planning and business advisory services delivered in a timely, efficient and innovative manner by a professional team that clearly enjoys working together to exceed their clients' needs.

Why it was selected

Chartered Accountancy course is undoubtedly one of the most prestigious course a commerce student can opt for. With the cadre professional appeal and multifaceted opportunities it brings, it is indeed a big value on the table. On the other side any student or qualified professional very well knows the importance of quality of article-ship experience of a CA Student.

1) Real world experience: Joining a company as an intern gives you the opportunity to work hands on in a professional environment. As an intern you're not just there to get coffee or run errands but you're there to gain actual work experience. Internships help by teaching you more about the career path you are pursuing. Think of it like this – internships are a way to test drive possible jobs and explore different career options

2) Networking: Internships often give you the opportunity to attend meetings and events. By interacting with professionals you gain new connections and learn how to communicate in a professional environment. Personally, my internships have introduced me to a lot of useful resources and have given me the opportunity to meet a variety of professionals in my field. Networking has helped me acquire references and find new job opportunities. Internships can even provide you with a professional mentor. 3) Resume Builder: As a college student I know the importance of a strong resume. Without a solid resume it can be tougher to be considered for a position. And how can you have a strong resume without any experience? Internships are key to building experience as a student or recent graduate. Employers are much more likely to hire someone with internships and work experience rather than someone with a generic resume, lacking experience. 4) Time Management: As an intern you'll become a master of time management. When you're working in a fast paced professional environment you need to know every minute counts. Time management is vital in every circumstance whether you're attending meetings, finishing tasks on deadlines, making phone calls, picking up your boss' dry cleaning or walking their dog (just kidding about those last two). 5) Career Foundation: Internships provide you with the building blocks you need for your future. Many internship opportunities help set the foundation for your career. It is important that you choose you internships based on your interests and career prospects. As an intern you have the opportunity to get your foot in the door with a company. Keep in mind, employers often use internships as a recruitment tool to test out future employees and in many cases, companies hire interns after graduation.

Internships are great tools to improve your chances as a job applicant and help make you a better potential employee. So make the investment in your career and look into becoming an intern.

Work culture Organizational culture encompasses values and behaviour that "contribute to the unique social and psychological environment of an organization." According to Needle (2004), organizational culture represents the collective values, beliefs and principles of organizational members and is a product of such factors as history, product, market, technology, strategy, type of employees, management style, and national culture; culture includes the organization's vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits . The concept of a workplace culture encompasses many different characteristics of a business. Culture has visible components in the way that a business looks and how employees dress, but it really thrives in the attitudes of employees, in the setting of goals and in the communication of business values to workers and customers. The business owner sets the pace for creating, defining and refining the company culture.

Sundaram seshan & associates believes that culture is dynamic so it important that employees should be capable to adapt the changes in culture. Employees are given full freedom to take decision which promotes flexibility in decision making flexibility helps in retention of business.

It’s a firm which promotes team work. As team work enhance the potentiality of the employees and gives effective outcome by using individual skills. It promotes the team work due to following advantages;-

Good teamwork maximizes involvement, utilizing everybody’s strengths and areas of expertise, as well as distributing responsibility to all.

Information is shared amongst the team members, maximizing the levels of knowledge and learning for the whole organization.

A good team can produce a wide range of possible solutions to each specific problem and ascertain the most effective one from the range through collective input and interaction. Teamwork gives people shared goals. It also gives individuals an interest in encouraging and aiding other members of the team to achieve those shared goals. A team often produces more accurate, innovative and practical solutions to problems than individuals (think in terms of “collective wisdom”, or “the wisdom of crowds”). Teamwork in general produces better end results, as well as bringing out better quality performances from individual members of the team. It encourages a wider sense of ownership for the organization, both collectively and individually, making team members more responsible and enthusiastic. Workers are more emotionally positive and are better at sharing knowledge, learning and responsibilities when they experience the personal security of being part of an effective team. Individuals are more likely to take risks when they experience the security of being part of an effective team, as they receive the support and reassurance of being part of a group. By utilizing teamwork, an organization’s decision-making process can be much better understood by its members. A group can sometimes deal with complicated, difficult, deep, and involved problems more effectively than individuals can. Last but not least, effective teamwork is fun for the people involved and this raises motivation and morale.

Do you prefer to work alone or as part of a team? 

I prefer to work alone

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I prefer to work as part of a team

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I like a mixture of both

Type of organisation

Sundaram seshan and Associates is service type of business which provides intangible product (product with no physical form) it offer professional skills, expertise, advice, and other similar products.

Organizational structure Any operating organization should have its own structure in order to operate efficiently. For an organization, the organizational structure is a hierarchy of people and its functions. A hierarchy is an arrangements of items (objects, names , values, categories, etc.) in which the items are represented as being “above” “below” or “at the same level as” one another and with only one “neighbour” above and below each level. These classification are made with regard to rank, importance, seniority, power status, or authority. A hierarchy of power is called as a power structure. Depending on the organizational values and nature of the business, organization tend to adopt the structures for management purposes.

 

Senior managers  



Partners

Managers Supervisors

Senior trainee students 

Junior trainee

Partners are often founders of the firm. Most of the firms names are associated with the names of the partners. They are basically the main parties who issue and sighn any report (specifically audit report) on behalf of the firm. Partners mostly communicate with the senior managers. In other words the progress of any report and any inquiry is made from the managers and hierarchy structure is strictly followed to avoid any disruption.

Managers are inquired of by the senior managers and mostly managers manage audit field works etc and after field work managers with cooperation of senior manager makes and finalize any audit report to be issued. Senior manager is a qualified chartered accountant having more den 10 year working experience.

Field work and information collection and implementation of policies by adopting changes in rules and regulation is the main responsibility of supervisors and trainess. They use different kind of techniques for error and fraud detetction.

Sundaram Seshan and Associates is having head office in Navi Mumbai-Vashi. Almost all the controls and regulations are dealt at head office in vashi.

Types of services

Audit An audit is a systematic and independent examination of books, accounts, statutory records, documents and vouchers of an organization to ascertain how far the financial statements as well as non-financial disclosures present a true and fair view of the concern. It also attempts to ensure that the books of accounts are properly maintained by the concern as required by law. Auditing has become such a ubiquitous phenomenon in the corporate and the public sector that academics started identifying an "Audit Society". The following are the audits done in sundaram seshan and associates: 1. Company audit: The firm provide audit service to different companies. The company needs to appoint an auditor either individual or a firm. The auditor has the right to access the books of holding as well as subsidiary in relation to consolidation. Auditor can inquire the following matters: a. whether loans and advances made by the company on the basis of security have been properly secured and whether the terms on which they have been made are prejudicial to the interests of the company or its members b. whether transactions of the company which are represented merely by book entries are prejudicial to the interests of the company c. where the company not being an investment company or a banking company, whether so much of the assets of the company as consist of shares, debentures and other securities have been sold at a price less than that at which they were purchased by the company d. whether loans and advances made by the company have been shown as deposits; e. whether personal expenses have been charged to revenue account f. where it is stated in the books and documents of the company that any shares have been allotted for cash, whether cash has actually been received in respect of such allotment, and if no cash has actually been so received, whether the position as stated in the account books and the balance sheet is correct, regular and not misleading

2. Internal Internal audit, also referred as operational audit, is a voluntary appraisal activity undertaken by an organization to provide assurance over the effectiveness of internal controls, risk management and governance to facilitate the achievement of organizational objectives. Internal audit is performed by employees of the organization who report to the audit committee of the board of directors as opposed to external audit which is carried out by professionals independent of the organization and who report to the shareholders via audit report. Unlike external audit, whose scope is primarily restricted to matters that concern the financial statements, the scope of work of an internal audit is very broad and can encompass any matters which can affect the achievement of organizational objectives. Internal audit is typically centered around certain key activities which include: 

Monitoring the effectiveness of internal controls and proposing improvements

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Investigating instances of fraud and theft

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Monitoring compliance with laws and regulations

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Reviewing and verifying where necessary the financial and operating information

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Evaluating risk management policies and procedures of the company

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Examining the effectiveness, efficiency and economy of operations and processes

Tax Tax audits are conducted to assess the accuracy of the tax returns filed by a company and are therefore used to determine the amount of any over or under assessment of tax liability towards the tax authorities. In some jurisdictions, companies above a certain size are required to have tax audits after regular intervals while in other jurisdictions random companies are selected for tax audits through the operation of a balloting system. External External audit, also known as financial audit and statutory audit, involves the examination of the truth and fairness of the financial statements of an entity by an external auditor who is

independent of the organization in accordance with a reporting framework such as the IFRS. Company law in most jurisdictions requires external audit on annual basis for companies above a certain size. The need for an external audit primarily stems from the separation of ownership and control in large companies in which shareholders nominate directors to run the affairs of the company on their behalf. As the directors report on the financial performance and position of the company, shareholders need assurance over the accuracy of the financial statements before placing any reliance on them. External audit provides reasonable assurance to the owners of the company that the financial statements, as reported by the directors, are free from material misstatements. External auditors are required to comply with professional auditing standards such as the International Standards on Auditing and ethical guidelines such as those issued by IFAC in order to maintain a level of quality and trust of all stakeholders in the auditing exercise.

Sundaram seshan and associates also do company audit, co-operative society audit and trust audit. As it believes in team work, few people are appointed from the office to work together. They try their best to provide quality audit.

Tax A tax is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state to fund various public expenditures. A failure to pay, or evasion of or resistance to taxation, is usually punishable by law. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent. Some countries impose almost no taxation at all, or a very low tax rate for a certain area of taxation.

1. Income tax: An income tax (IT) return is the tax form or forms used to file income tax with the Income Tax Department. The tax returnis usually in a predefined worksheet format where the income figures used to calculate the tax liability are written into the documents themselves. The law states that tax returns must be filed every year for an individual or business that received income during the year, whether through regular income (wages), dividends, interest, capital gains or other sources.

Tax returns, regardless of whether it relates to an individual or a business, must be filed by a specific date. If the return shows excess tax has been paid during a given year, the assesse is eligible for a ‘tax refund’, subject to the department’s interpretations and calculations.

2.Professional tax Professional tax is the tax by the state governments in India. Anyone earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax. Different states have different rates and methods of collection. In India, professional tax is imposed at the state level. However, not all states impose this tax. The professional tax is a slab-amount based on the gross income of the professional. It is deducted from his income every month. Slab for professional tax varies across different states in India The owner of a business is responsible to deduct professional tax from the salaries of his employees and pay the amount so collected to the appropriate government department. He/she has to furnish a return to the tax department in the prescribed form within the specified time. The return should include the proof of tax payment. In case the payment proof is not enclosed, the return shall be deemed incomplete and invalid sec 16(iii). 

Employers covered under the jurisdiction of “State Government” as Designated authority shall pay in the treasury by Challan through the bank. Other employers shall pay at the place of payment declared by the Designated Authorities concerned.



If an employer has employed more than 20 employees, he is required to make payment within 15 days from the end of the month. However, if an employer has less than 20 employees, he is required to pay quarterly(i.e. by the 15th of next month from the end of the quarter). 3.Service tax

Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994. It is charged to the individual service providers on cash basis, and to companies on accrual basis. This tax is payable only when the value of services provided in a financial year is more than Rs 10 lakh. This tax is not applicable in the state of Jammu & Kashmir. Service Tax which started out at a nominal 5% is now at 15% It was increased to 14% for transactions that happened on or after 1 June 2015 and then for transactions that occurred on or after 15 Nov 2015, the new Swachh Bharat Cess at 0.5% was also added to the Service Tax. Therefore, the effective rate became 14.5% with effect from 15 Nov 2015. For transactions that occurred on or after 1 June 2016 this tax is at 15%.2016 Union budget of India has proposed to impose a cess, called the Krishi Kalyan Cess, at 0.5% on all taxable services effective from 1 June 2016. The current service tax is at 15%.

4.Value-Added Tax - VAT

A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. VAT is most often used in the European Union. The amount of VAT that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed. The VAT is an alternative to a sales tax and is meant to deal with a specific problem. With a sales tax, a business selling goods is responsible for making a subjective decision about the intent of a buyer, the business may not be fully competent to make the decision. The refund portion of a VAT removes that incentive, and incentivizes accurate collection. If the buyer is a businessperson, then that VAT is a temporary payment to the state, based on the purchase price, eventually to be reimbursed by the state for the initial payment when the goods are resold, usually after adding value to them. Hence collecting the tax is a way to get money

back. Consumers, with no possible refund, have no reason to inaccurately report their intended use. TDS Return Tax Deducted at Source (TDS) is a means of collecting income tax in India, under the Indian Income Tax Act of 1961. Any payment covered under these provisions shall be paid after deducting prescribed percentage. It is managed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS). It has a great importance while conducting tax audits. Assessee is also required to file quarterly return to CBDT. Returns states the TDS deducted & paid to government during the Quarter to which it relates. A deductor is required to issue a TDS certificate called form 16 for salaried employees and form 16A for non salaried employees within a specified time. He has to issue TDS Certificates within one month of the next financial year. TDS on immovable Property Section 194I of Income Tax Act by Freakans. 

This provision is applicable in respect of transactions effected on or after June 1, 2014

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.



It seeks deduction of tax at source on transfer of certain immovable property other than agricultural land

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Any person being a transferee who is liable to Pay to a resident by way of consideration for transfer of any immovable property exceeding 50 Lakhs shall at the time of credit of such sum to the account of the transferor or at the time of payment in whatever manner, has to deduct tax at source at 1% only

This TDS is required TDS on property is required to be deposited in 30 days from the end of the month in which deduction is made for all payments to be made on or after 01st June 2016. Before 01.06.2016 time limit to deposit TDS on property is 7 days from the end of the month in which deduction is made

Section 194C of Income Tax Act Section 194C of Income Tax Act - Tax need to be deducted 1% (for individual, HUF)/ 2% (for others) of payment where payment is made for carrying out any work (including supply of labour for carrying out any work and advertisements) by a contractor/sub-contractor. Such work must be in pursuance of a contract (including sub contract) between the contractor and payer. TDS is to be made at the time of credit to the account of contractor or at the time of payment in cash or by cheque or draft or by any other mode whichever is earlier. TDS on Dividends Section 194 of Income Tax Act, 1961 by lawnotes. 

TDS provisions under this section are attracted only in respect of deemed dividend u/s 2(22)(e), If such dividend exceeds 2500 in year.

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Rate of deduction of tax in respect of such dividend is 10%.

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Provisions will not apply to dividend receivable by LIC, GIC(General Insurance Corporation)

Accounting Accounting has variously been defined as the keeping or preparation of the financial records of an entity, the analysis, verification and reporting of such records and "the principles and procedures of accounting"; it also refers to the job of being an accountant Accounting can be divided into several fields including financial accounting, management accounting, auditing, and tax accounting. Accounting information systems are designed to support accounting functions and related activities. Financial accounting focuses on the reporting of an organization's financial information, including the preparation offinancial statements, to

external users of the information, such as investors, regulators and suppliers and management accounting focuses on the measurement, analysis and reporting of information for internal use by management. The recording of financial transactions, so that summaries of the financials may be presented in financial reports, is known as bookkeeping, of which double-entry bookkeeping is the most common system. Financial accounting: Financial accounting focuses on the reporting of an organization's financial information to external users of the information, such as investors, regulators and suppliers. It calculates and records business transactions and prepares financial statements for the external users in accordance with generally accepted accounting principles (GAAP) Management accounting: Management accounting focuses on the measurement, analysis and reporting of information that can help managers in making decisions to fulfil the goals of an organization. In management accounting, internal measures and reports are based on cost-benefit analysis, and are not required to follow the generally accepted accounting principle (GAAP).[7] In 2014 CIMA created the Global Management Accounting Principles The firm provides accounting services to the company, individual and co-operative society as well. It uses the modern approach for accounting i.e Tally ERP 9. It’s a software used for the accounting.

Learning objective I chose to work with sundaram seshan & associates. During this internship I have learnt many new skills. Before internship I had only theoretical knowledge about work in organisation but now I have some practical experience of working in organisation. Now I have knowledge about the working environment of the organisation and how organisation work and achieve their goals and objectives.

This internship has given me the understanding of business and also about the elements of strategic thinking, planning and implementation and how these things are applied in a real world organisation environment. Following are the objectives that I had in my mind before working as an internee:

To determine if working for an accounting firm is an appropriate goal for me.

To study the methods of cost accounting used by this firm.

To learn how to apply the principles of accounting to tax preparation.

To develop my potential as a facilitator in group counselling.

To develop an understanding of the tax software the firm uses to prepare client returns.

Chartered Accountants work in a wide range of business sectors and in a broad spectrum of roles, from Chief Executives to Financial Controller. No matter where you live or how the economy is doing, there is going to be a need for accountants.

That’s because governments, businesses and not-for-profit organizations (and sometimes individuals, too) continually need accountants and bookkeepers to manage their budgets, deal with taxes, do financial reporting, complete audits…and the list goes on.

It’s a great opportunity to work under a CA, we get knowledge related to tax and how to manage financial accounts and preparing budget. As a professional with in the field you will likely need to stay up to date on best practices to be successfu . Accounting provides working opportunities in all kind of career options.

Work experience

Filing of TDS return TDS return is summary of all the transaction made during the quarter field in the form of 26Q, 24Q, 27Q by computer readable media on CD ROM/PIN drive as format described under Income Tax Act. The person who deducts TDS is liable to furnish eTDS Return. It is mandatory to file TDS Return within time as given below; otherwise they are liable to pay penalty for non-submitting of e-TDS Return. The following persons are required to file e-TDS return quarterly. 

Company

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Persons whose accounts Audited (See limit for Audit of Accounts)

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Govt. Officers The types of income that are subject to TDS include: 

Salary

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Interest and dividends

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Winnings from the lottery

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Insurance commission

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Rent

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Fees from technical and professional services

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Payment to contractors and subcontractors Preparation of e-TDS Statement Step by Step

1) TDS Return Software: First of all you need the software to prepare TDS return as the format given by e-Filing Administrator /Income tax Department. You can find the data format on the official website of Income Tax Department i.e. www.incometaxindia.gov.in and e-TDS

Intermediary’s website i.e. http://tin.nsdl.com. There is also software to validate the file which is prepared by TDS software. But you don’t need to download it, if you have purchased the TDS software from valid vendor. The e-tDS Intermediary (NSDL) has also provided the valid vendor of TDS soft wares. You can buy online or offline. All software has its help file to prepare TDS return/statement. As we have experience, all software required to enter three entries after creation of master of payees/deductee and payers/deductors. (a) Credit or Paid Amount (b) TDS deducted on that amount (c) Challan detail of TDS payment 2) After Preparing and validating the .fvu file (e-TDS file after preparation), it will generate form 27A. You should Printout two copies of 27A. 3) The authorized signatory should sign on it. 4) Copy the .fvu file to Pen Drive or burn the CD. But confirm form your nearest TIN Facilitation centers for facility of Pen drives. 5) Now go to the TIN center with CD/Pen Drive and form 27A. 6) Pay the fee for process of TDS return (Rs.31 up to 100 deductees, Rs. 185 for maximum 1000 and minimum 101 deductees, Rs. 618 for more than 1000 deductees) 7) Now take the provisional receipt from TIN Center and you have done. Due Dates to File TDS Returns/ TDS Statements

QTRs.

1st QTR ending on 30th

Due Dates in Case of Deductor (Office of the

Due Dates In Other

Government)

Cases

31st July

15th July

31st October

15th October

31st January

15th January

15th May

15 the May

June, 2016

2nd QTR ending 30th September

3rd QTR ending 31st December

4th QTR ending 31st March

Audit vouchers Voucher is known as the evident for the support of a transaction in the books of account. It may be bill, receipts, requisition form, agreement, decision, bank paying slip etc. Objectives Of Vouching Main objective of vouching is to find out the regularity or irregularity of transactions, frauds and errors. Regularity means maintaining record and performing the work compliance with the rules, regulation and law. But irregularity means doing the work crossing to the line of rules, regulation and laws. Some of the major objectives of vouching are given below:

1. To Detect Errors And Frauds

All transactions are to be supported by evidence. Each document should be proved by authorized authority. With the help of vouching we can detect errors and frauds by verifying each transaction. Planned fraud can be detected through vouching.

2. To Know The Truth Of Account Each and every transaction is checked and ratified on the basis of support document. So, we can easily know the truth of account.

3. To Find The Unrecorded Transactions Each and every transaction is checked and ratified on the basis of document. Vouching helps to find out the unrecorded or missing transactions. If any voucher is found unrecorded, auditor can suggest to record such transactions.

4. To Know That All The Transactions Are Authorized If the transactions are made on the consent of concerned authority, such transactions are known as authorized transactions. If transactions are not authorized, such transactions can be fictitious transactions. So, such fictitious transactions ca be found with the help of vouching.

5. To Know That Only The Business Transactions Are Recorded Sometimes, transactsions are performed for individual purpose but payment is made out of business. Such transactions should not be recorded in account of business. If such transactions are recorded, we can find it with the help of vouching. To know the real profit or loss of business, such transactions are to be separated.

Some important point when auditing a voucher which a auditor must kept in mind:

1.All the voucher should be consecutively arranged.because if all the vouchers are not consecutively arranged then lots of time will be lost to find out a specific voucher.

2.A auditor must pay attention to the dates,amount,name of the party who is using the voucher and to whom the voucher is issued which must be similar with the cash book.

3. He should also check the nature of the payment whether it related to business or not.

4.He should also check where the payment is posted, in revenueor in capital.

5. He should also pay attention to both amount and word figure.

6.He should also check that whether Receipted invoice is consider as voucher or not.if not then it must be consider as voucher there is a danger of payment being made twice.

7.While check the voucher for insurance,rents,taxes ,etc theauditor should notice the period because sometimes these payment are made in advance,so he should check weather proper adjustment is made or not.

Overview of Tally ERP 9 Journal entry Journal vouchers are used to adjust the debit and credit amounts without involving the cash or bank accounts. Hence, they referred to as adjustment entries. Creating a Journal Entry Journal entries are usually used for finalization of accounts To pass a journal voucher. Go to Gateway of tally > Accounting Vouchers Click on : Journal on the Button Bar or press F7 For example, there may be entries made for interest accrued or interest due. If you have to receive interest from a party, the same can be entered using Jounal Voucher. 1. Debit the party 2. Credit the interest receivable account The jounal entry is displayed as shown:

SPECIAL KEYS FOR VOUCHER NARRATION FIELD: 

ALT+R: Recalls the last narration saved for the first ledger in the voucher, irrespective of the voucher type

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CNTRL+R: Recalls the last narration saved for the specific voucher type, irrespective of the ledger.

Allowing Cash Accounts in Journal Journals are adjustment entries, which do not involve Cash account and Bank account. However in exceptional cases where the user would like to account Journal entries involving Cash/Bank

Account, Tally.ERP 9 has the flexibility of passing such entries by enabling the option under F12 configuration. To enable Cash Accounts in Journal voucher, 

Set Allow Cash Accounts in Journals to Yes in F12: Configure (Voucher Entry Configuration).

To pass a Journal voucher with Cash/Bank Ledger, 1. Go to Gateway of Tally > Accounting Vouchers > Select F7: Journal 2. Press the spacebar at the Debit or Credit field.

Bank reconciliation

Gateway of Tally>Banking>Bank Reconciliation Select the bank

Now press F12 Configure

In the configuration screen, enable ‘Show reconciled transaction also’ by giving Yes in the box. Press enter and save.You will get a screen with all vouchers including reconciled voucher, make necessary changes and save again.

Accounting Before the advent of fast and cheap computers, accounting traditionally was processed manually with all transactions recorded in columnar papers and kept in voluminous binders. Once computers became popular and software affordable, accounting tasks moved into this medium, where concepts stayed the same but mechanics changed from papers to programs. The most important accounting reports are called the financial statements. Remember that the word statement, as used in the term financial statements, simply means a report. So the financial statements are simply financial reports.

The financial statements are prepared from the information in the trial balance Purpose of Accounting Reports and the Financial Statements Accounting reports come in various formats and all provide different information. However, they all have one thing in common: they give useful information about a business (or about an aspect of the business) to the reader.

The specific stated purpose of the financial statements is to show the reader the financial position, financial performance and cash flows of a business. The financial position of the business is shown in the balance sheet, the financial performance of the business is shown in the income statement (also known as the profit and loss report), and the business cash flows are shown in the cash flow statement. This will become clearer as you go through each of these reports that comprise the financial statements.

Users of Financial Statements But here's a question - who are the readers or users of the financial statements? Who are these reports prepared for?Save Well, the financial statements are like the business scorecard - they show if the business is doing well or not.

The people who want to see the financial statements are the people that are interested in this business scorecard - the guys who want to know how well the business is doing and details about the business income, expenses, assets, etc. These people, in rough order of importance, typically include: 1) Business owners - They have the most direct interest in how well the business is doing. The better the business performs, the more money they make.

2) Business executives - Managers (people employed by the owners to run the business) will get fired if the business performs poorly, or get bonuses if it performs well!

3) Investors - Investors are only going to invest in businesses with good scorecards. 4) The bank - They are interested in the financial statements (the business scorecard) of businesses they have a relationship with. For example, they may want to look at the financial statements to see how risky it would be to loan money to the business.

5) The government and tax authorities - They want to know that the business is fulfilling their legal duties, and in particular, that they are paying enough tax! The financial statements give a good idea of how much tax the business should be paying over. 6) Suppliers - Suppliers want to get paid by the business they are supplying goods to! So they may want to check the financial statements of the business before they even begin to make any agreements to trade with them.

7) Employees - Though this is not often the case, an employee may want to know how well the business is doing so he or she can plan for the future. For example, if the business looks like it might fall apart soon, the employee would probably want to start looking for another job! Note that the drawing up of financial statements is a compulsory (legal) obligation for public companies - companies that are listed on a public stock exchange. Also, after they are finalized, their financial statements have to be audited (checked by an external auditor). For these

companies the financial statements must be prepared once a year, but the company executives may also want them prepared more often for internal and other uses. For other types of corporations such as private companies, it is also customary to prepare the financial statements annually. Alright, now that we know what the financial statements are, let's take a look at the first of its reports, the income statement (also known as the profit and loss report). INCOME STATEMENT The income statement is the first component of our financial statements. It is also known as the profit and loss statement. The income statement is a report showing the profit or loss for a business during a certain period, as well as the incomes and expenses that resulted in this overall profit or loss. The amount of the profit or loss for a business during a certain period indicates the financial performance of the business.

Income Statement Accounting Period An income statement usually covers a year; however this statement may be drawn up for shorter periods, such as one month, three months (quarters) or six months. The period of time that is covered by the income statement (and other financial statements) is called the accounting period. A regular 12-month accounting period does not necessarily have to begin on the first day of the year and end on the last. Accounting periods can, for example, run from March 1st to February 28th, or July 1st to June 31st, etc. The choice of the accounting period rests with the enterprise itself. Creating the Income Statement from the Trial Balance The income statement is drawn up from the figures in the trial balance. Let's look at an example. Our previous trial balance for George’s Catering is shown below.

We will now take the income and expense items and create a simple income statement:

Note that when we are creating an income statement, we only take the incomes and expenses from the trial balance, we ignore everything else (assets, liabilities and owners equity). Budgeted Income Statements Budgeted income statements can also be drawn up, showing targeted figures for sales, expenses and profits. These budgeted figures can then be compared to the actual figures and action can be taken to rectify any shortfalls.

In the budgeted income statement above, we can see that the actual profit for the period is about Rs8,500 less than what was planned for. This was due to the income being Rs5,400 less (Rs100,000 – Rs94,600), and the expenses (such as water and electricity) being greater than expected. These budgeted figures would normally be drawn up based on actual figures from past years, but taking into account any expected future changes. The budgeted figures (and the way these figures were obtained) could be explained or justified in additional notes to the income statement. BALANCE SHEET The balance sheet shows the balances of assets, liabilities and owner's equity on a particular day. The balance sheet thus provides a snapshot of a business at an exact point in time - it shows the balances of the various accounts on the last day of the reporting period. The given below is an example of balance sheet: (Rs in Cr) Mar' 16

Mar' 15

216.39

216.35

Share Application Money

0.00

0.00

Peference Share Capital

0.00

0.00

3,470.23

3,507.76

SOURCES OF FUNDS Owners' Fund Equity Share Capital

Reserves & Surplus Loan Funds

Secured Loans

0.00

0.00

Unsecured Loans

0.00

0.00

3,686.62

3,724.11

5,077.42

4,430.63

0.67

0.67

Less: Accumulated Depreciation

2,162.69

1,973.10

Net Block

2,914.06

2,456.86

385.97

479.01

2,966.55

3,277.93

7,899.78

7,419.59

Less : Current Liabilities & Provisions

10,479.74

9,909.28

Total Net Current Assets

-2,579.96 -2,489.69

Total USES OF FUNDS Fixed Assets Gross Block Less: Revaluation Reserve

Capital Work-in-progress Investments Net Current Assets Current Assets, Loans & Advances

Miscellaneous Expenses not written

0.00

0.00

3,686.62

3,724.11

Book Value of Unquoted Investment

1,728.32

1,510.44

Market Value of Quoted Investment

1,264.19

1,792.05

Contingent liabilities

1,167.45

1,072.71

Total Note

Number of Equity shares outstanding (in 21,639.37 21,634.65

lakh) Profit and loss statement : The following is an example of profit and loss statement of the company.

Mar' 16

Mar' 15

31,987.17

30,805.62

15,371.85

15,748.56

271.41

304.62

1,592.02

1,578.89

0.00

0.00

9,021.97

7,965.31

0.00

0.00

26,257.25

25,597.38

5,729.92

5,208.24

500.63

618.39

6,230.55

5,826.63

0.18

16.82

320.75

286.69

0.00

0.00

Income : Operating Income Expenses Material Consumed Manufacturing Expenses Personnel Expenses Selling Expenses Adminstrative Expenses Expenses Capitalised Cost Of Sales Operating Profit Other Recurring Income Adjusted PBDIT Financial Expenses Depreciation Other Write offs

Adjusted PBT

5,909.62

5,523.12

Tax Charges

1,788.22

1,872.16

Adjusted PAT

4,121.40

3,650.96

-39.03

664.30

0.00

0.00

Reported Net Profit

4,082.37

4,315.26

Earnigs Before Appropriation

5,259.46

5,058.31

Equity Dividend

2,785.00

2,609.42

0.00

0.00

677.25

635.90

1,797.21

1,812.99

Non Recurring Items Other Non Cash adjustments

Preference Dividend Dividend Tax Retained Earnings Cash Flow Statement:

Mar' 16

Mar' 15

Profit Before Tax

5,909.62

5,523.12

Net CashFlow-Operating Activity

3,965.21

3,103.76

-43.65

448.04

-4,008.98

-3,450.44

Net Inc/Dec In Cash And Equivlnt

-87.42

101.36

Cash And Equivalnt Begin of Year

721.97

620.61

Cash And Equivalnt End Of Year

634.55

721.97

Net Cash Used In Investing Activity NetCash Used in Fin. Activity

The Difference Between Traditional Accounting & Computerized Accounting

Speed The most glaring difference between traditional and computerized accounting is the speed of operations. With an accounting program, data is entered once and it is saved. The program provides management with reports in a speed never dreamed possible in the traditional days. No more waiting days or weeks to know whether your business is making a profit. Using computerized accounting, information can be accessed in a matter of minutes. Once data is available in the system, it can be used in reports, queries and analysis. Accuracy Computerized systems have drastically increased accuracy of calculations when compared to the traditional, manual system, in which columns had to be added up, numbers moved from one page to the next, and trial balance and financial statements manually compiled. If errors occurred, many hours had to be spent trying to find and correct them. With accounting software, this problem is eliminated. In the case of accounting spreadsheets, adding simple formulas still may be needed, but it is an easier and more accurate process. Efficiency goes through the roof when a computerized system is used. Costs The traditional manual accounting system with paper and pencil is cheaper than the computerized version, in which a firm needs a computer, software, printer and other expenses associated with a system. The manual system may work for small businesses up to a certain point, but with the affordable costs of computers and software, many firms are opting for the

computerized system. They are easy to use, and finding experienced employees to run the system is not a hurdle. Backups When using a manual system, the risk of losing data is real. If important papers are damaged or destroyed, that work may have to be re-created. Copies of the original work can be made, but that could be expensive and time-consuming. Accounting on a computerized system offers the choice of saving work on a CD, portable or external hard drive, flash drive, or even online. Many firms back up data every night as a precaution. If something happens the next day, the data can be restored from the backup.

Considerations Using a computerized accounting system keeps all of the information organized and in one place & dash;the computer hard drive. Finding and accessing information on an accounting software program is much easier than the traditional method. Specific data can be found using system functions, which usually include a "find" or ; key. For example, finding information about a vendor on a manual system could take many steps and significant time. The same process in a computerized system most likely would yield the information in a snap, with less confusion and aggravation.

Timing I have worked in Sundaram Seshan & Associates for the period of 2 months commencing from 01/04/2016 to 31/05/2016.

5. Learned Experience To determine if working for an accounting firm is an appropriate goal for me. Every year legislators twist and tweak tax laws, leaving the average citizen scratching his head when faced with financial decisions such as selling investment property or claiming a tax deduction for a home office. Accounting firms stay abreast of the new tax laws, and many offer financial advice and help individuals and small businesses develop budgets and set financial goals. Whether you need someone to handle weekly payroll or you just want reliable tax advice, you’ll be happier with your choice if you ask some preliminary questions. Business Specialties Accountants generally specialize in a few business areas in order to offer clients better service. A retail tax accountant might not be as much assistance to a farmer as an accountant who specializes in helping rural and agricultural clients. Certification Tax preparation firms hire and train tax preparers to assist the public in filing income taxes, but these firms can’t offer in-depth advice to small businesses. In general, the greater your accounting needs, the more you’ll benefit from a general accounting firm that employs certified public accountants, or CPAs. Advice Some accounting firms are quick to offer advice on when to purchase equipment and how to keep financial records, while other accounting firms compile the necessary financial reports but offer little feedback. The amount of advice you need or want depends upon your financial knowledge and experience. If you need a lot of help, select a firm that offers in-depth financial counseling. Level of Service If you need complete bookkeeping services, look for a full-service accounting firm that employs bookkeepers who handle day-to-day client transactions. An accounting firm that does not employ bookkeepers will charge more if a CPA handles routine bookkeeping tasks. Availability

Some clients are content to meet with their accounting firm once a year for tax-filing purposes. Others clients have frequent business questions that require timely answers. Find out if your accountant is a phone call away or if you'll have to schedule a time to come into the office and talk in person. Personal Connection You can hire the highest-priced accounting firm in town, but if you don’t feel comfortable discussing your finances, you aren’t getting the service you need. If the accountant talks in terms you don’t understand or if you feel intimidated, look for a different firm. Goal Setting Some accountants offer to help clients set goals and monitor financial progress, which can be very helpful if you’re just starting out in business. Find out the firm’s policy on goal setting and if you’ll be charged an additional fee for the service. Audit Support When the Internal Revenue Service comes knocking, it’s reassuring to know that your accountant will be right by your side. IRS audits are a way of life for some small-business owners and individual taxpayers, but facing an audit is a stressful situation. Some accounting firms offer their own offices for audit purposes and provide an accountant to represent your interests. To study the methods of cost accounting used by this firm.

To learn how to apply the principles of accounting to tax preparation. There are general rules and concepts that govern the field of accounting. These general rules–referred to as basic accounting principles and guidelines–form the groundwork on which more detailed, complicated, and legalistic accounting rules are based. For example, the Financial Accounting Standards Board (FASB) uses the basic accounting principles and guidelines as a basis for their own detailed and comprehensive set of accounting rules and standards. The following is a list of the ten main accounting principles and guidelines together with a highly condensed explanation of each.

1. Economic Entity Assumption

The accountant keeps all of the business transactions of a sole proprietorship separate from the business owner's personal transactions. For legal purposes, a sole proprietorship and its owner are considered to be one entity, but for accounting purposes they are considered to be two separate entities.

2. Monetary Unit Assumption

Economic activity is measured in U.S. dollars, and only transactions that can be expressed in U.S. dollars are recorded. Because of this basic accounting principle, it is assumed that the dollar's purchasing power has not changed over time. As a result accountants ignore the effect of inflation on recorded amounts. For example, dollars from a 1960 transaction are combined (or shown) with dollars from a 2015 transaction. 3. Time Period Assumption

This accounting principle assumes that it is possible to report the complex and ongoing activities of a business in relatively short, distinct time intervals such as the five months ended May 31, 2015, or the 5 weeks ended May 1, 2015. The shorter the time interval, the more likely the need for the accountant to estimate amounts relevant to that period. For example, the property tax bill is received on December 15 of each year. On the income statement for the year ended December 31, 2014, the amount is known; but for the income statement for the three months ended March 31, 2015, the amount was not known and an estimate had to be used. 4. Cost Principle

From an accountant's point of view, the term "cost" refers to the amount spent (cash or the cash equivalent) when an item was originally obtained, whether that purchase happened last year or

thirty years ago. For this reason, the amounts shown on financial statements are referred to as historical cost amounts. Because of this accounting principle asset amounts are not adjusted upward for inflation. In fact, as a general rule, asset amounts are not adjusted to reflect any type of increase in value. Hence, an asset amount does not reflect the amount of money a company would receive if it were to sell the asset at today's market value. (An exception is certain investments in stocks and bonds that are actively traded on a stock exchange.) If you want to know the current value of a company's long-term assets, you will not get this information from a company's financial statements–you need to look elsewhere, perhaps to a third-party appraiser.

5. Full Disclosure Principle

If certain information is important to an investor or lender using the financial statements, that information should be disclosed within the statement or in the notes to the statement. It is because of this basic accounting principle that numerous pages of "footnotes" are often attached to financial statements. 6. Going Concern Principle

This accounting principle assumes that a company will continue to exist long enough to carry out its objectives and commitments and will not liquidate in the foreseeable future. If the company's financial situation is such that the accountant believes the company will not be able to continue on, the accountant is required to disclose this assessment. The going concern principle allows the company to defer some of its prepaid expenses until future accounting periods. 7. Matching Principle

This accounting principle requires companies to use the accrual basis of accounting. The matching principle requires that expenses be matched with revenues. For example, sales commissions expense should be reported in the period when the sales were made (and not

reported in the period when the commissions were paid). Wages to employees are reported as an expense in the week when the employees worked and not in the week when the employees are paid. If a company agrees to give its employees 1% of its 2015 revenues as a bonus on January 15, 2016, the company should report the bonus as an expense in 2015 and the amount unpaid at December 31, 2015 as a liability. (The expense is occurring as the sales are occurring.)

8. Revenue Recognition Principle

Under the accrual basis of accounting (as opposed to the cash basis of accounting), revenues are recognized as soon as a product has been sold or a service has been performed, regardless of when the money is actually received. Under this basic accounting principle, a company could earn and report $20,000 of revenue in its first month of operation but receive $0 in actual cash in that month.

9. Materiality

Because of this basic accounting principle or guideline, an accountant might be allowed to violate another accounting principle if an amount is insignificant. Professional judgement is needed to decide whether an amount is insignificant or immaterial. 10. Conservatism

If a situation arises where there are two acceptable alternatives for reporting an item, conservatism directs the accountant to choose the alternative that will result in less net income and/or less asset amount. Conservatism helps the accountant to "break a tie." It does not direct accountants to be conservative. Accountants are expected to be unbiased and objective.