Getting Started With Auditors Edition

7/28/2019 Getting Started With Auditors Edition

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Getting Started with Auditors Editionof Tally.ERP 9


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Version: Getting Started with Auditors Edition of Tally.ERP 9/Release 3.0/February 2011


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Contents

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Contents

Introduction .............................................................................................................................................................................1

Lesson 1: Creating Tally.NET Auditors

1.1 Creating Tally.NET Auditors .....................................................................................................................2

1.1.1 Company Delegation ..............................................................................................................................6

Lesson 2: Auditing Scenarios in Tally.ERP 9

2.1 Audit at CAs office by accessing local data ...........................................................................................8

2.2 Audit at Clients place by accessing local data .....................................................................................11

2.3 Audit Remotely by accessing Client's data from anywhere ................................................................13

Lesson 3: Tally.NET Overview

3.1 Configuring Tally.NET features ..............................................................................................................17

3.2 Authorise Tally.NET Auditors .................................................................................................................19

3.3 Create Security Controls ...........................................................................................................................21

3.4 Connect Company to Tally.NET for Remote Auditing .......................................................................24

Lesson 4: Features of Auditors Edition

4.1 Tax Audit .....................................................................................................................................................27

4.1.1 Form 3CD .............................................................................................................................................37

4.2 Statutory Audit ...........................................................................................................................................38

4.2.1 Audit Programme ..................................................................................................................................39

4.2.2 Data Analysis ........................................................................................................................................41

4.2.3 Auditing .................................................................................................................................................43

4.2.4 Audit Journals .......................................................................................................................................45

4.2.5 Financial Statements: ...........................................................................................................................46

Schedule-VI Balance Sheet ...................................................................................................................47

Schedule-VI Profit & Loss A/c Statement ............................................................................................50

4.3 Statutory Compliance ................................................................................................................................51


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Introduction

Tally.ERP 9 offers a special Gold Auditors Edition, which providesAudit & Compliance capabili-ties, exclusively for Chartered Accountants. The Auditors Edition provides the following tools for

Chartered Accountants:

Tax Audit

Statutory Audi t

Statutory Compliance

These tools will help in retrieving the relevant information and present them in the required form tohelp the Auditor to form the opinion. Using Tally.ERP 9, Chartered Accountants can provide theAudit and Compliance services to their clients in the following three scenarios:

Audit at CAs office by accessing local data

Audit at Clients place by accessing local data Audit Remotely by accessing Clients data from anywhere


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Lesson 1: Creating Tally.NET Auditors

On successful Activation of Tally.ERP 9 Auditors Edition, theAccount ID/Email ID (main BAPusername) provided during the Activation process is configured as a Tally.NET Auditor (having theRemote Audit & Compliance capabilities). The main BAP user can further create sub-users underhim and configure them as Tally.NET Auditors to perform Audit from any where.

1.1 Creating Tally.NET Auditors

Tally.NET Auditors can be created from Control Centre feature in Tally.ERP 9.

To create Tally.NET Auditors,

Start Tally.ERP 9

Click on K: Control Centre button in the top button toolbar or press CTRL+K keys

Figure 1.1 Tally.ERP 9 Startup screen


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Creating Tally.NET Auditors

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The Control Centre Login screen is displayed.

Enter the Account ID/Email ID as it was entered during the License Activation in YourEmail ID field

In Your Tally.NET Password field, enter the Account Password sent by e-mail to youas shown:

The Account Password is Automatically generated during the Activation andsent by e-mail to the Email ID provided. You can change the Password byLogging into Control Centre.

Figure 1.2 Control Centre Login screen

Press Enterto login

The Control Centre screen is displayed as shown:

Figure 1.3 Control Centre in Tally.ERP 9


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From the Control Centre screen,

SelectU: User Management and press Enter

Figure 1.4 User Management screen

User Management screen displays the list ofTally.NET Users and Tally.NET Auditors createdby default.

To create more users, go to the next Line and execute the following steps:

SelectStandard Userunder Security Level field from Security Level drop down list

Enter the required Email ID (e.g. [email protected]) in the Tally.NET IDfield

SetTally.NETUserfield to No

SetTally.NETAuditorfield to Yes

Admin field will be skipped

SetStatus field toActive


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Figure 1.5 Completed User Management screen

Press Enterto save the User (Tally.NET Auditor). Similarly, you can create more users.

Security level: Default options are Standard and Owner. Standard User has limited

permission and he cannot change his settings or create new users. Owner has full

permission and he can create new users.

Tally.NET ID:A valid Email ID should be entered in this field.

Tally.NET User: This option should be set to Yes if you want the user to work as

Tally.NET User.

Tally.NET Auditor: This option should be set to Yes if you want the user to work as

Tally.NET Auditorand have access toAudi t & Compl iance features.

Status: The Status should be selected asActive for the user to work.

The Password for [email protected] will be emailed to therespective Email ID.


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1.1.1 Company Delegation

The Companies which have provided the access to an auditor can be delegated to the articles(sub articles) for conducting the remote audit.

To Delegate the Companies, which have authorised the auditor,

PressAl t+G or click on G: Company Delegation button in the Control Centre

The Company Delegation screen appears as displayed:

Figure 1.6 Company Delegation screen

Press EnteronAl t+A or click onA: Add User

Select the auditor from the List of Users from your own account or select Other Usertoadd users from any other account. (each serial is treated as Account)

Select the name of account in theAccount Name field

Select the required access type from the list ofAccess Type

Al low All : Should be selected to delegate all companies which have authorised theauditor

Al low Specif ic: Should be selected to further select the required Company for delega-tion

Deny Specific: Should be selected to allow all company access, except the one forwhich access is denied.


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The completedCompany Delegation subs screen is displayed as shown:

Figure 1.7 Company Delegation subscreen

Press Enterto accept and save.

Press Alt+F1 to view the details of the Companies which are delegated for auditing asshown:

Figure 1.8 Company Delegation in detailed mode

The delegated Companies cannot be further delegated by the sub articles. Tally.ERP 9 allowsonly one level of delegation.


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Lesson 2: Auditing Scenarios in Tally.ERP 9

Tally.ERP 9 provides auditing and compliance capabilities exclusively for Chartered Accountantsand makes the Audit and Compliance tools available in the following scenarios for the CharteredAccountants:

Audit at CAs office by accessing local data

Audit at the Clients place by accessing local data

Audit Remotely by accessing the Clients data from anywhere

2.1 Audit at CAs of fice by accessing local data

The Auditors Edition includesAudit & Compliance capabilities as a default feature without anydependency on Tally.NET for Authentication. When the Clients data is locally available at CAsoffice, the Auditor can perform theAudit or Verification as the Tax Audit, Statutory Audit andStatutory Compliance features are available by default.

Go to Gateway of Tally > Alt+F3: Company Info. > Select Company

or

FromCompany Info. > Select Company

Tally.ERP 9 displays the List of Companies along with the Company number


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Auditing Scenarios in Tally.ERP 9

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Select the company to be audited and press Enter

Figure 2.1 Company selection screen

The Company Login screen is displayed as shown:

Figure 2.2 Company login screen

Enter the User Name and Password provided by the Client.

If the Clients company is not password protected, then you will have to make itpassword protected by enabling the security feature in the Company Master.(Gateway of Tally > Alt+F3 + Alter).


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The completed Company Login screen is displayed as shown:

Figure 2.3 Completed Login screen

Press Enterto Load the Company

Figure 2.4 Gateway of Tally (for Auditors Edition of Tally.ERP 9)

Tally.ERP 9 displays the Auditors License in the Information panel at the bottom of the screenand theAudit & Compliance menu is available by default, when the Auditor accesses the clientsdata from his local machine (where Auditors Edition of Tally.ERP 9 is installed). The Auditor canstart using the Tax Audit, Statutory Audit and Statutory Compliance Tools.


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2.2 Audit at Clients place by accessing local data

When the Auditor wants to use the Auditors License from the Clients Office to provide the Audit orCompliance Service, an Internet Connection and Tally.NET subscription are required. The Clientshould have authorised the Chartered Accountant as a Tally.NET Auditor for the Company forwhich Audit needs to be performed. For more details on the Authorisation process read thechapter Tally.NET Overview.

In this scenario, Tally.NET is used to Authenticate the Auditor to get the Auditors License on theClients Tally.ERP 9. The Auditor can then open the Company and perform Audit or Verification inthe same way as it is done in the Auditors office with Local data using the Auditors License.

The Auditor should have a valid Tally.NET subscription to perform Audit in this scenario.

To start the Audit, execute the following steps.

Go to Gateway of Tally > Company Info. > Select Company

Tally.ERP 9 displays the List of Companies along with the Company number

Figure 2.5 List of Companies for Selection

Select the company to be audited and press Enter


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Tally prompts forUser Name and password

Figure 2.6 CA Login Screen

Specify the CA User Name (Remote User Name)and Password, as explained in the ear-lier chapter

Type [email protected] in the Name of the Userfield

Type the passwordin the Password field

Press Enter

The Gateway of Tally screen is displayed as shown:

Figure 2.7 Auditors Edition of Tally.ERP 9 (Remote Authentication)


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Once the Chartered Accountant logs in using his authorised (BAP) user name and password,Tally.ERP 9 displays the Remote Auditor Serial No along with the clients Tally.ERP 9 licenseSerial number.Auditors Edit ion is displayed under Edition in the Information Panel.

2.3 Audit Remotely by accessing Client's data from anywhere

When the Auditor wants to provide Audit and Compliance services from his office (or from anyother remote location) and access the Clients Data Remotely, the internet connection and valid

Tally.NET subscription is a must for both the Auditor and the Client. The Client should have

authorized the Chartered Accountant as Tally.NET Auditor and Connect the Company toTally.NET at the time of Audit/Verification process. The Auditor will Login as Remote Userandprovide the Auditors Username and Password to view the Companies that are available forAudit (Connected) belonging to various Clients based on the Access provided.

For information on Authorising the Remote Auditor and Connecting the Client Company toTally.NET, refer to Tally.NETOverview chapter.

The process of Remote Audit is as shown:

Start Tally.ERP 9

Go to Company Info. screen

The Auditor can fetch the Auditors Edition License on Educational version ofTally.ERP 9 also.


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Figure 2.8 Company Info screen

SelectLogin as Remote Userand press Enter

The Remote Login screen is displayed as shown:

Figure 2.9 Remote Login screen

In the Remote Login screen,

Enter the BAP username in the Your Email ID field

Enter the password in the Your Tally.NET Password field


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The completed Remote Login screen is displayed as shown:

Figure 2.10 Completed Remote Login screen

Press Enterto login Remotely

The Remote Company selection screen is displayed as shown:

Figure 2.11 Remote Company Selection screen

Select the required Remote company and press Enterto Load the Company

The Remote Company selection screen displays the List of Remote Companies which haveauthorised the Chartered Accountant to access from a Remote location.


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On successful login, the Gateway of Tally screen is displayed as shown:

Figure 2.12 Gateway of Tally with Remote Login

You can view the Remote User details on the left side. The Information Panel displays the remote

Serial Number for the Auditor (BAP User). You can click onAudit & Compliance menu to startexperiencing the Power of Remote.

Remote Auditing can be performed successfully on the Educational Version of

Tally.ERP 9 also.


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Lesson 3: Tally.NET Overview

Tally.NET (to be read as TallyNET) is an enabling framework which establishes a connectionthrough which the remote user (or Remote Auditor) can access the Client's data without copying /transferring the data. Tally.NET is a default feature of the product and provides a host of capabili-ties.

By default Tally.NET is enabled in Tally.ERP 9, however, certain configurations have to be setup toget the company connected for the Remote Access. The following steps need to be executed atthe Client of the required Company:

1. Configuring Tally.NET features

2. Authorise Tally.NET Auditors

3. Security Controls for Tally.NET Auditors

4. Connect Company to Tally.NET for Remote Access

3.1 Configuring Tally.NET features

To configure the Company for Tally.NET features,

Go to Gateway ofTally >F11: Features >F4: Tally.NET Features

In the Registration Details section,Type the required Connect name for the Company (e.g. Global Enterprises) in the

Connect Name field (Tally.ERP 9 allows to specify company name to be connected /made available as per the user requirements)

Type the required name (e.g. Rajesh) inContact Person Name field

Type the contact number (e.g. 9909968650) inContact Numberfield

In Connect for Remote Access section,


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Tally.NET Overview

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Select Yes forAl low to Connect Company

Select Yes forConnect on Load

SMS Access Detailsoptions can be skipped if SMS is not used.

The completedTally.NET Features screen is displayed as shown.

Figure 3.1 Completed Tally.NET Features screen

Press Enterto accept.

Connect Name: The user can specify any Connect Name for the Company to

be connected.

Contact Person Name: The name of the Contact person should be entered

who should is responsible for connecting the Company to Tally.NET

Contact Number: The name of the contact person should be provided for the

person who is responsible for connecting the company to Tally.NET

Al low to Connect Company: This option allows the user to enable the Com-

pany to get connected for remote access.

Connect on Load: This allows the company to get connected by default when

the company is loaded.


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Tally.NET Overview

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3.2 Authorise Tally.NET Audi tors

To Authorise the Tally.NET Auditors, execute the following steps:

Go to Gateway of Tally >Al t+F3: Company Info. >Security Control

The Security Control screen is displayed as shown:

Figure 3.2 Security Control menu

SelectUsers and Passwords and press Enter

It is mandatory to enable Security Control in the Company Creation master forTally.NET features to be available in Tally.ERP 9. In case Security Controlfeature is not enabled, go to the Company Alteration (Al t+F3) screen andenable the same before proceeding further.


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Tally.NET Overview

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The List of Users for Company is displayed as shown:

Figure 3.3 List of Users for the Company

SelectTally.Net Audi torfrom the Security List

Enter the BAP user name (e.g. [email protected]) inName of Userfield

Password field will be skipped

Type Yes inAl low Remote Access field to allow the user to access data from a remotelocation

Type No in the fieldAl low Local TDL, so that the user does not execute TDL files availableon the remote computer

Type the contact number (e.g. 9890412345) in the Mobile Numberfield

SelectEnd of List


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Tally.NET Overview

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Figure 3.4 User Authorisation screen

Accept to allow remote access to the user.

3.3 Create Security Controls

By default, Tally.NET Auditoris created and authorised in the capacity of Owner, thereby havingcomplete access to the company data. However, the Client can allow /disallow access to a menu/

report by altering the Security Levels.

To create security controls for Tally.Net Auditor, execute the following steps shown.

Go to Gateway of Tally > press Al t + F3: Company Info. > Secur ity Control > Types ofSecurity

In the Security Levels screen, select Tally.NET Auditor

In the Security Levels sub screen for Tally.NET Auditor

The registered CA Username will be provided to the customer/client from their

Chartered Accountant/ Auditor. Al low Remote Access should be set to Yes, only if you want your Auditor to

access your data remotely for Auditing.


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Tally.NET Overview

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By default Tally.NET Auditorappears in the Name of Securi ty Level field

By defaultTally.NET Auditorwill Use the Basic Facili tiesofanOwner, which has fullaccess on the company data. You can also selectTally.Net AuditorfromSecurity List

which has similar properties

Figure 3.5 Security Level for Tally.Net Auditor

By default Days allowed for Backdated Vouchers is set to 0

The Cut-off date for Back Dated Vouchers is left empty

SetYes to Allow to Connect Company, if you want the Tally.NET Auditorto Connectthe Company to Tally.NET

SetNo to Use Tally.NET Authentication

SetYes to Use Tally.NET Audi tor Authentication

In Disallow the Following Facili ties:

SelectEnd of List fromType of Access

InAl low the Fol lowing Facili ties:

SelectFull Access fromType of Access

SelectAudit Listings fromList of Reports


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Tally.NET Overview

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Figure 3.6 Security Levels for Tally.NET Auditor

SelectEnd of List fromType of Access and return to Security Levels for Companyscreen

Press Enter.

Accept to save the access controls for Tally.NET Auditor.

If you want to deny access to certain reports for Auditor you can select the type of

access and select the required reports in the Securit y Levels screen.


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Tally.NET Overview

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3.4 Connect Company to Tally.NET for Remote Auditing

To enable the Auditor to Log in as Remote Auditor, the Client needs to Connect the requiredCompany to Tally.NET.

To connect a Company to Tally.NET, execute the following steps:

Go to Gateway of Tally

Click on F4: Connect or press F4.

The Company Info menu is displayed as shown:

Figure 3.7 Company Info menu

Select the Company that needs to be connected from the List of Companies and pressEnter


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Tally.NET Overview

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The completedConnect Companies to Tally.NET screen is displayed as shown:

Figure 3.8 Remote Company Login

Press Enterto Connect

The Company should be connected to Tally.NET during the Remote Auditing process for theAuditor to view the required reports and post Audit comments.

The Connect Companies to Tally.NET screen will not be displayed if a singlecompany loaded. In this case, the loaded company directly Connects toTally.NET you click on F4: Connect or press F4.


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Tally.NET Overview

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On establishing a successful connection, the status is displayed in the Calculator panel availablein the Information Panel. Click on the Calculator Panel to view the complete message as shown:

Figure 3.9 Tally.NET Connection status

The Client needs to ensure that the Company is connected to Tally.NET during the Remote Auditprocess for the Auditor to check various reports and post the Audit Remarks.


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Lesson 4: Features of Auditors Edition

Auditors Edition comprises of the following features which will help the Auditors in improving theefficiency while providing the Audit & Compliance services to the Clients.

Tax Audit tool as per section 44AB of IT Act and printing of:

Form 3CD

Form 3CA

Form 3CB

Statutory Audi t tool to perform Audit as per the requirements of Companys Act

Audit Programme

Data Analysis

Auditing

Audit J ournals

Financial Statements in Schedule-VI format

Statutory Compliance tool for regular compliance services

4.1 Tax Audit

Tax Audit feature helps in ensuring that the books of accounts and other records are properlymaintained, in order to reflect the true income of the assessee and to facilitate the Tax Auditor tocarry out the verification and generate required Annexure and Forms.

The key features of Tax Audit tool in Tally.ERP 9 are listed below:

Extracting financial and quantitative information required for Tax Audit (under Sec. 44AB)

Displaying relevant data for Audit based on Clause requirement for the following Clauses:

Clause 16

Clause 17(h)

Clause 18

Clause 21

Clause 24(a) & 24(b)


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Features of Auditors Edition

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Clause 27

Instant Statistics on Audit Listings (Vouchers which are Audited and Unaudited. Voucherswhich are marked as Under Observation, Need Clarification and Vouchers which are Clari-fied by the Client and altered by the client after audit)

Provides facility to record Audit Remarks using Audit Note

Provision to mark Vouchers for clarification / Verification from Clients

Provides facility to post corrections and reviews remotely

Tracking any alteration / modification to vouchers post Audit

Generate Annexures to Form 3CD

Printing of Form 3CD along with Annexure I and II

Printing of Form 3CA and Form 3CB

To view the Tax Audit Dashboard,Go to Gateway of Tally > Audi t & Compl iance > 44AB Audit

The Tax Audit Dashboard appears as shown below:

Figure 4.1 Tax Audit Dashboard

The Tax Audit dashboard screen shows total number of vouchers available for Audit (Unaudited),number of Vouchers Audited, number of Vouchers To be re-audited and Audit Complete informa-tion for each Clause.


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Clause No.: Displays the Clause number as it appears in Form 3CD.

Audit Type: Provides brief description on the respective Clause.

Unaudited: Displays the total number of unaudited vouchers for each clause.

Audited: Displays the total number of Audited Vouchers for each clause.

Under Observation: Displays the total number of Vouchers marked as Under Observationfor each Clause. The Auditor can mark a Voucher as Under Observation for further study or

for his Superior's help. The Auditor or his superior can highlight the respective column todrill down to view the Under Observation Summary for each Clause.

Need Clarification: Displays the total number of Vouchers marked for Clarification fromthe Client. This will help the Auditor to keep track of the total number of Vouchers that arepending for Clarification from the Client. The Auditor can highlight the respective column toview the Need Clarification Summary for each Clause.

Clarified (To be re-audited): Displays the total number for Vouchers which are Clarified bythe Client for each Clause. The Auditor can highlight the respective column to view theClarified Vouchers.

Al tered (To be re-audited): Displays the total number of Vouchers that are Altered by theClient post Audit. The Auditor can highlight the respective column to view the Re-Audit

Summary for the respective Clauses. Audit Complete?: Displays the Audit completion status for each Clause as entered by the

Auditor using the F9: Save Audi t button.

The Auditor can click on any Clause in the Tax Audit dashboard to perform the Audit for the

respective Clause.

To Audit the Cash Payments made by the Client,

Press EnteronAmounts inadmissible u/s 40A(3)

The Voucher Count shown under the Unaudited Column also contains the Vouchers

which are shown under the Under Observation, Need Clarification, Clarified and

Al tered columns.

If the Client alters any Audited Vouchers after the Audi t Complete is set to Yes.

The Audi t Complete status will automatically change to blank for the respective

Clause.


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The Cash Payments screen is displayed as shown:

Figure 4.2 Cash Payments screen -1

The Cash Payments screen displays all the Cash Payment Vouchers irrespective of any limit. Youcan specify the per day aggregate values in the F11: Tax Audit Rules orF12: Configure screensand the above report will list down only those transactions where the per day aggregate valueexceeds the specified limit.

Press F11: Features

In the Tax Audi t Rules screen,

SetShow Aggregate for the Day to Yes


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Specify 20,000 inShow Aggregate Amounting more than field as shown:

Figure 4.3 F11: Tax Rules screen

Press Ctrl+A to save the changes

The Cash Payments screen with per day aggregate more than 20,000 is displayed as shown:


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Figure 4.4 Cash Payments - showing per day aggregate more than 20,000

From the above report you can still filter some more payments which are allowed under Rule6DD. In the above screenAdvance Tax payment can be removed from by following the processgiven below:

Press Ctrl+F9 or click on Ctrl+F9: Masterbutton

SelectAdvance Tax from the List of Ledgers and press Enter


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Specify the details as shown in the screen displayed below:

Figure 4.5 Configuring expenses allowed under Rule 6DD

The Cash Payments after filtering the expenses allowed under Rule 6DD is displayed as shown:

You can specify the Rule 6DD exceptions for a period as shown above or forever by

not specifying any dates in the From and To fields.


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Figure 4.6 Updated Cash Payments screen

The above screen displays only required Cash Payments which can be further investigated by theAuditor. The Auditor can drill down into each ledger Vouchers and decide to allow or disallow anytransactions. The Transactions which are marked as disallowed will appear in the Annexure toClause 17(h), which can be annexed with Form 3CD.

To audit the Cash Payments transactions,


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Select the required Ledgerand press Enter

Figure 4.7 Ledger Vouchers report

Bring the cursor to the required Voucher and press Enter

In theAudit Details screen,

SelectedAudit Status as Disallowed

Amount field is prefilled with Voucher value this can be changed if required

Specify your remarks in theAudit Note field

To select more than one transactions, press Spacebaron the required transactions

and press F9.


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The completedAudit Details screen is displayed as shown:

Figure 4.8 Audit Details screen

Press Enterto save

Similarly, other transactions can be audited. After auditing, you can press Al t+P from CashPayments screen to print theAnnexure to Clause 17(h) as shown:

Figure 4.9 Print Configuration screen for Annexure to Clause 17(h)

Set the option Print as Annexure to Yes

Press Enter to print the Annexure

If you have selected multiple Vouchers for Audit, then use Ctrl+A key combinations

to save the Audit Details for all the Vouchers.


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TheAnnexure to Clause 17(h) is displayed as shown:

Figure 4.10 Annexure to Clause 17(h)

Similarly, other Clauses can be audited and the Annexure can be printed. Alternately, you canalso click on Print button or pressAl t+P from the Tax Audit Dashboard to print theAnnexure forall Clauses.

4.1.1 Form 3CD

Tally.ERP 9 provides the Form 3CD which can be filled by the Auditor at the end of the Auditprocess and print out for the same can be taken along with the required annexure.

The Salient Features of Form 3CD in Tally.ERP 9 are listed below:

The filled Form 3CD will get saved along with the company data for each company andhence available for reference next year. There is no need to save Form 3CD separately inan Excel sheet or any other format.

The entire Form 3CD can be copied from one company to different companies or different

years of same company and hence time can be saved by eliminating data entry.

Customized texts (auto text) which are commonly used are automatically generated whilefilling the Form 3CD to reduce the time to enter information.

To view the Form 3CD Dashboard,

Go to Gateway of Tally > Audit & Compl iance > Form 3CD

The Annexure for each Clause can be printed separately by drilling down into each

Clause and pressingAl t+P from any report in the respective Clause.


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The Form 3CD Dashboard in Tally.ERP 9 is displayed as shown:

Figure 4.11 Form 3CD dashboard

The Auditor can drill down on the Clause no. column on the left side and enter the required infor-mation and save it.

Once the Form 3CD is filled completely, the Auditor can click on P: Print button or pressAl t+P toprint the Form 3CD along withAnnexure I andAnnexure II.

Similarly, Form 3CA and Form 3CB can also be printed.

4.2 Statutory Audit

The Statutory Audit tool is aimed at providing the necessary tools to investigate Audit data bycomparing the same with the previous years data that is available in the same company or a

separate company.The Auditor can generate the required Financial Statements like Balance Sheet and Profit & LossAccount statement that needs to be submitted to the stake holders as per the format prescribed inCompanys act.

This tool is divided into the following sections:

Audit Programme

Audit & Analysis


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Data Analysis

Auditing

Audit J ournals

Financial Statements

Schedule-VI Balance Sheet

Schedule-VI Profit & Loss A/c

4.2.1 Audit Programme

Creation of a detailed Audit Programme is a compulsory pre-audit planning activity which includesof preparing of audit checklist based on the industry type, allocation of resources, identifying thetime required for audit etc. Tally.ERP 9 now provides the facility to create a detailed AuditProgramme along with the required features and also record the post audit comments. All this willremain in Tally.ERP 9 itself along with the Clients data for future reference if needed.

To create Audit Programme,

Go to Gateway of Tally > Audit & Compliance > Audit Programme

Set the option Set / Alter Client & Auditor Details to Yes

Specify the details for Client and Audit firm as shown:

Figure 4.12 Audit Programme- Auditor and Client Details

Press Enterand create the checklist for Audit along with the resource names and timerequired for audit for each area.

The Audit Programme contains the default checklist which is used widely to conduct

the Auditing. The other Audit areas can be added to this list or removed from this list

as required by you based on the industry type.

The details forExtent of Verification and Verification Remarks can be entered

after the actual audit completion activity.


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The completedAudit Programme screen appears as shown:

Figure 4.13 Completed Audit programme screen

Press Enterto save the Audit Programme.

PressAl t+P to print the Audit Programme which can be taken to the Clients place for refer-ence.


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The printed Audit Programme is displayed as shown:

Figure 4.14 Printed Audit Programme

4.2.2 Data Analysis

Data Analysis consists of the following tools, which will help in highlighting the exceptions that theAuditor will be interested to verify:

Verification of Chart of Accounts: will help the Auditor to understand and scrutinize theChart of Accounts by comparing with the previous Year Chart of Accounts and will drawattention for all exceptional cases such as Master which as Discontinued, Newly Created,


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Regrouped etc. The Auditors can also mark the Ledgers as Verified to track the Ledgerswhich are pending for Verification.

Verification of Balances: Will help the Auditor to check the difference in Opening Bal-ances and Transaction details by highlighting the exceptions. The Negative Cash balanceand Ledger Balance variance reports can also be generated.

Verification of Stock Items: Will help the Auditor to check the Stock Items available andwill draw attention for the exceptional items such as negative stocks, difference in balancesetc. by comparing with the previous years Stock Items list.

Analytical Procedures: Will help the auditor to Compare various Groups/Ledgers/CostCategory/Cost Centres or cross compare to draw various trends and obtain the Variancefor further investigation.

Pending Documents: Provides the details of the pending bills, Sales Orders & PurchaseOrders and Receivable & Payable during the selected year.

Statutory Payments: Will help the Auditor to find if the necessary Statutory payments weremade on time or not. This will also help to find the details of the Amount Payable, Paid andBalances if any.

Fixed Assets Analysis : This report displays the details of the Fixed Assets Ledgers with

the following information:

Opening Balance of the Assets brought forward from the previous year

Accumulated Depreciation for the Assets if separate Ledger is created for eachAsset

Number of days for the Assets purchased/procured during the Audit Year with theoption to classify as less than 180 days and more than 180 days. The relevantPurchase entries are also available for scrutiny.

Closing Balance for each Fixed Assets at Group and Ledger level.

The above report can be exported to Excel and the Depreciation can be computed for

each asset.

Periodic Payments and Receipts: This report displays the details of periodic payments orreceipts for all the ledgers selected by the Auditor and provides a comparison with the pre-vious years payments and receipts. The report provides the frequency and amount varia-tions as compared to the previous year.

Repeated Value Transactions:This report displays the transactions where the samevalue is repeated more than once for the same Ledger. This is aimed at finding the fictionalVouchers which are passed by the Client without any proper supporting as the trend is sup-

pose to repeat. Relative Size Factor report:This report displays the Relative Size Factor analysis for the

all the Ledger Vouchers which is obtained by dividing the highest value transaction withthe second highest transaction.This report is aimed at rectifying these errors:

Data entry mistakes

Alterations in decimals

Wrong Postings

Wrong coding with masters (vendors, customers, employees, etc.)


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Revenue items charged to capital accounts and vice versa

Excess payments in payroll

Once the Auditor finishes verifying the data using the above tools, he can mark the status in theVerification Complete? column to Yes.

4.2.3 Auditing

The Auditing section provides the facility to the Auditors to Vouch the transactions and enter therequired Audit remarks.

Verification of Vouchers: Option to apply the recommended Sampling methods and dothe Auditing for the Sampled Vouchers or all Vouchers is provided.

Related Party Transactions: Option to check and Audit the vouchers of Ledgers markedas Related Party is provided.

Forex Transactions: Option to check and audit the transactions involving multi currency isprovided.

Micro, Small and Medium Enterprises (MSME) Transactions: Auditor can check andaudit the Outstanding Payments for the parties identified as MSMEs. The Payments whichwere made after 45 days can also be tracked using this report.

Salary / Wages Payments: Auditor can check the Head count details and Salary Pay-ments details for all the employees and option to audit these transactions is provided.

Though the Auditing section provide the list of all Vouchers for Audit, the tool provides the flexibil-

ity to Audit any transaction from anywhere.

The Auditors Edition provides the facility to the Auditors to raise the Clarification Note and obtainnecessary clarifications from the Client. The tool also tracks the Vouchers which are altered afterthe Audit completion.

To view the Data Analysis andAuditing reports,

Go to Gateway of Tally > Audit & Compliance > Audit & Analysis


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The Statutory Audit Dashboard appears as shown:

Figure 4.15 Statutory Audit Dashboard

The drill down from Total, Audited columns will display all and Audited Vouchers respectively.While the drill down from the Under Observation, Need Clarification, Clarified (To be re-audited) andAl tered (To be re-audited) columns will display the Vouchers with the respectiveAudit Status.

The Statutory Audit Dashboard also displays the percentage of sampled Vouchers to totalVouchers and Sampled Vouchers to Audited Vouchers.

The Statutory Audit Dashboard with these percentage values is displayed as shown:


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Figure 4.16 Statutory Audit Dashboard -2

For more information on sampling methods and configuration, refer to the Tally.ERP 9 ReferenceManual (Help file).

4.2.4 Audit Journals

TheAudit Journals report displays and provides the facility to pass the Finalisation, Appropria-tion and Provision Entries which are required to finalise the Books of Accounts.

These entries can be passed using the following appropriation types using the F7: Audit Jrnlbutton:

Appropriation:This Appropriation Type should be used to record the Appropriation entriessuch as Dividend, Dividend Tax, Reserve and Surplus etc. The entries passed with theAppropriation flag will appear below the heading Appropriations under the Amount Availa-

ble for Appropriations in the Schedule-VI Profit & Loss A/c.

Depreciation Provisions: This Appropriation Type should be selected to record theDepreciation entries which will appear as Depreciation under Profit/(Loss) before Interest,Depreciation and Tax in the Schedule-VI Profit & Loss A/c.

Finalisation Entries:This Appropriation Type should be used to pass the entries that willnot affect the Profit/(Loss) before Interest, Depreciation and Tax in the Schedule-VI Profit &Loss A/c. Profit & Loss A/c Ledger is not available for selection when this flag is selected inthe Audit J ournal creation.


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Interest Provision:This Appropriation Type should be selected to record the provisionalentries for Interest which will appear as Interest under Profit/(Loss) before Interest, Depre-ciation and Tax in the Schedule-VI Profit & Loss A/c.

Tax Provisions:This Appropriation Type should be selected to record the provisionalentries for Tax which will appear as Provision for Taxation under Profit/(Loss) before Tax inthe Schedule-VI Profit & Loss A/c.

Others:This Appropriation Type should be selected for all other entries. If the Client haspassed any entry using the Profit & Loss A/c Ledger it will appear under Others in the Audit

J ournals report. The Auditor needs to correct these entries by selecting the required Appro-priation flag.

The entries with the Others flag will appear above the Profit/(Loss) Carried to BalanceSheet in Red colour to grab the attention.

TheAudit Journals report with these entries is displayed as shown:

Figure 4.17 Audit Journals

4.2.5 Financial Statements:

Using Auditors Edition of Tally.ERP 9 the Financial Statements can be prepared as per theSchedule VI requirements as specified in Companies Act. The following reports can begenerated using this tool in the Schedule VI format:


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Balance Sheet

Profit & Loss Statement

The salient features for the Schedule VI reports are listed below: Schedule-VI Balance Sheet

Can be generated with a single click

Tally Default Groups (Business Groups) are mapped to Schedule VI groupings bydefault.

Can be further regrouped as required (User defined)

Flexible Schedule numbering

Generation of Schedules

Export to Excel for further formatting if required.

Schedule-VI Profit and Loss A/c

Sales & Income Groups are mapped to INCOME by default

Expenses & Purchase Groups are mapped to EXPENDITURE

Option to rename INCOME & EXPENDITURE is provided to support all industries

Flexibility to regroup within INCOME & EXPENDITURE

Flexible Schedule numbering

Generation of Schedules

Export to Excel for further formatting if required.

Schedule-VI Balance Sheet

To generate the Balance Sheet in the required Schedule VI format,

Go to Gateway of Tally > Audit & Compliance > Financial Statements > Balance Sheet


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The schedule VI Balance Sheet is displayed as shown:

Figure 4.18 Schedule VI Balance Sheet

To generate the Balance sheet with previous year figures, load the previous year data if it is in adifferent Company.

Click on Ctrl+F3: Compare Cmp or press Ctrl+F3

Figure 4.19 Compare Company screen


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Select the required Previous Year Company and press Enter

Figure 4.20 Schedule VI Balance Sheet with two years data

All the default Tally Groups are mapped to the Schedule VI titles to generate the above FinancialStatements. The Auditor can further re-classify these Groups as per the requirement withoutaffecting the Clients data.

Flexibility has been provided to rearrange either Groups or Ledgers so that the requiredSchedule -VI Balance Sheet can be generated. Please refer to Tally.ERP 9 reference manual(help file) for more information.


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Schedule-VI Profit & Loss A/c Statement

To generate the Profit & Loss A/c Statement in the required Schedule VI format,

Go to Gateway of Tally > Audi t & Compl iance > Financial Statements > Profi t & Loss A/cThe Schedule-VI Profit & Loss A/c statement is displayed as shown:

Figure 4.21 Schedule-VI P&L Account statement

In the above report all the default Sales, Direct Income and Indirect Income Groups aremapped under INCOME and all the default Purchase, Direct Expenses, Indirect ExpensesGroups are mapped under EXPENDITURE.

You can further reconfigure the above report as per the requirement to arrive at the final Profit &Loss A/c Statement.

The Tally Groups appearing under INCOME can only be reclassified under INCOME. Similarly,the Tally Groups appearing under EXPENDITURE can be reclassified only under EXPENDI-TURE.

Flexibility has been provided to rearrange either Groups or Ledgers so that the requiredSchedule -VI P&L A/c can be generated. Please refer to Tally.ERP 9 reference manual (help file)for more information.


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4.3 Statutory Compliance

The Statutory Compliance feature in the Auditors edition will help the Auditors to provide the

Compliance services for various direct and indirect taxation modules on a regular basis.The salient features for Statutory Compliance tool are listed below:

Taxation based in-built rules to classify the Masters and Vouchers as Possibly Incorrect(not created as per the recommended setup for each Taxation)

Reasons for Possibly Incorrect Masters and Vouchers

Auditor can concentrate only on Possibly Incorrect and save time

No need for 100% verification of Masters and Vouchers (for other than Possibly Incorrect)

Taxation based Payable & Paid information

Taxation based Due Dates

Random verification of In Accordance Masters and Vouchers

Provision to raise Clarification on Master and Vouchers from Clients Provides facility to record Verification Remarks using Verification Note

To view the Statutory Compliance Dashboard,

Go to Gateway of Tally > Audit & Compliance > Statutory Compliance

The Statutory Compliance Summary screen appears as displayed below:

Figure 4.22 Statutory Compliance Summary


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The Statutory Compliance Summary is divided into two sections:

1. The first section displays the number of Ledgers and Vouchers and classifies them intofollowing:

Total: Displays the total number of Ledgers/Vouchers

Possibly Incorrect (to be Verified): Displays the number of Ledgers/Vouchers which arenot created/passed as per the setup recommended by Tally.ERP 9 for selected Statutes.

Marked for Clarification/Correction: Displays the number of Ledgers /Vouchers for whichthe clarification is asked from Client or correction is suggested.

In Accordance: Displays the number of Ledgers/Vouchers that are created/passed as perthe recommended setup in Tally.ERP 9 for the selected Statutes.

Others/Non Statutory: Displays all other Ledgers /Vouchers that does not belongs to the

selected Statutes.

2. The second section shows the Statutory Payment Details for the selected period along withpending payments and due dates etc.

Tax payable: Displays the total tax payable for the selected period.

Tax paid: Displays the total tax paid during the selected period. Balance Tax: Displays the pending tax payment based on the Tax payable and Tax Paid

amounts during the selected period.

Due on: Displays the last date of making the tax payment for the selected period if there isany balance tax to be paid.

The Auditor can drill down from the first section to view the Ledger Masters and LedgersVouchers and perform the Audit and save the Verification remarks. The drill down fromPossiblyIncorrect (to be Verified) will display the reasons for the non compliance.

The number of Ledgers/Vouchers that are marked Verified will appear in the

brackets next to the total number of Ledgers/Vouchers in each column except

Possibly Incor rect (to be Verified) and Marked for Clarification/Correction.

The due date for the selected statue is shown based on the due date specified in the

F11: Audit Features screen.

Getting Started With Auditors Edition

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