INTERNSHIP REPORT

INTERNSHIP TRAINING REPORT AT RAJAMANI VINOD & CO COIMBATORE Submitted in partial fulfillment of the requirements for the award of the Degree of Bachelor of Commerce (Professional Accounting) Department submitted by ABINAYA.K 10BPA001 Under the guidance of Mrs. S. VIJAYALAKSHMI, M.COM, M.Phil, PGDCA, M.B.A HEAD- I/C-COMMERCE Department of commerce (Professional Accounting)

P.S.G.R.KRISHNAMMALCOLLEGE FOR WOMEN College with potential for Excellence (An Autonomous Institution Affiliated to BharathiarUniversity) Re-Accredited with “A” grade by NAAC An ISO 9001:2008 Certified Institution) Peelamedu, Coimbatore – 641 004 June 2012 CERTIFICATE This is to certify that the internship training at RAJAMANI VINO D & CO submitted to P.S.G.R.KRISHNAMMAL COLLEGE FOR WOMEN, Coimbatore, (An Auton omous Institution affiliated to Bharathiar University, a College with Potential for Excellence) in partial fulfillment of the requirements for the award of the Degree of Bachelor ofCommerce (Professional Accounting) is a record of original work report done by ABINAYA.K (10BPA001) during the period of her study in the D epartment of Commerce (Professional Accounting), under my guidance and the work report has not formed the basis for the award of any Degree / Diploma or other s imilar title to any candidate of any University.

DATE OF THE GUIDE

SIGNATURE

Counter signed Head of the Department - Commerce (Professional Accounting) P.S.G.R.Krishnammal College for Women, Peelamedu, Coimbatore – 641004. DECLARATION This is to certify that the internship training report done at RAJAMANI VINOD & CO submitted to P.S.G.R.KRISHNAMMAL COLLEGE FOR WOMEN, (An Autonomous Institutio n affiliated to Bharathiar University, a College with Potential for Excellence) in partial fulfillment of the requirements for the award of the Degree of Bachel

or ofCommerce (Professional Accounting) is a record of original work report done by me under the supervision of MRS.S.VIJAYALAKSHMI, M.COM, M.PHIL, PGDCA, MBA.

Date: ABINAYA.K 10BPA001

Signature of HOD gnature of the Guide

Si

ACKNOWLEDGEMENT I take this opportunity to acknowledge with great pleasure, deep satisfaction an d gratitude, the contribution of many individuals in the successful completion o f this training. I owe my gratitude of SHRI. G.RANGASWAMY, Managing Trustee and SMT. R.NANDINI, S ecretary, P.S.G.R.Krishnammal College for Women in providing us an opportunity t o carry out the training. I thank our beloved Principal Dr. N. YESODHA DEVI, M.COM., Ph.D., P.S.G.R.KRISHN AMMAL COLLEGE FOR WOMEN, Coimbatore for providing me the opportunity to take up this training. I whole heartedly thank my guide and Head of the Department Mrs.S.VIJAYALAKSHMI M.Com., M.Phil, MBA.,PGDCA for her motivation, valuable guidance and constructiv e suggestions which enabled the successful completion of this training. I wish to express my heartful thanks to SRI.R.RAJAMANI FCA, for giving me an opp ortunity to do the training in their esteemed organization. Finally I thank my family, friends and all those who have helped me directly or indirectly for the successful and timely completion of this training. CONTENTS CHAPTER CONTENTS PAGE NO. 1. INTRODUCTION 1 2. FIRM’S PROFILE 13 3. COMPANY’S PROFILE 15 4. PRIMARY AREA OF TRAINING 17 5. FIELD WORK 20 6. AN ASSESSMENT OF THE INTERNSHIP 24

7.

CONCLUSION 25

INTRODUCTION 1. INTRODUCTION The purpose of this report is to fulfill the internship requirement for the Bachelor of Commerce (Professional Accounting). While I had undergone inter nship training at RajamaniVinod& Co for a period of two weeks, I had a good expe rience regarding the auditing field. This report summarizes the purpose of study of auditing, its objectives and techniques. The function of an audit concern is to get an independent opinion about the credibility of the Financial Statements whether it represents the true or fa ir view of the company’s financial position or not. It may encompass other areas l ike service sector, review of operations, performance, management policy and cos t records and so on. The aim of the audit is to evaluate the existing operations of the entity in order to give expert advice to improve their efficiency. 1.1.

OBJECTIVES OF THE TRAINING

The objectives of the report are as follows: To get a practical knowledge in the formal functional activities of an audit fir m. To develop the ability to work co-operatively in a business environment with coworkers and supervisors. To practice the skills and attitudes learnt in classroom. To gain exposure in fields like Auditing and Income tax. To discover the ability to keep up with the changing world of work by putting em phasis on problem solving, thinking and decision making.

1.2.

AUDIT

The definition of an audit is an evaluation of a person, organization, s ystem, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, qu ality management, water management and energy conservation. Audit means critical and intelligent examination of facts- financial or otherwise, to give in the form of certificate or report and attestation, an expe rt opinion or an expert advice. The agency employed for this purpose is called a n auditor. Audits are performed to ascertain the validity and reliability of inform ation; also to provide an assessment of a system s internal control. The goal of an audit is to express an opinion of the person / organization / system (etc.) in question, under evaluation based on work done on a test basis. Due to constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits. In the case of financial audits, a set of financial st atements are said to be true and fair when they are free of material misstatemen ts – a concept influenced by both quantitative (numerical) and qualitative factors .

1.2.1. SCOPE & OBJECTIVES OF AUDIT: The scope of audit extends to the transactions of both State and Union G overnment offices located within the territorial jurisdiction. It covers: Certification Audit: Certification of Finance and Appropriation Accounts of the State Government prepared by the A&E office and expenditure incurred by the State Gov ernment on Centrally Sponsored/Central Sector Schemes/State Plan Schemes and oth er Schemes/projects financed by International Development Agencies like World Ba nk and UNFFA assisted projects. Audit of expenditure: Examine the regularity, propriety, economy, efficiency and effec tiveness of expenditure and correctness of their accountability. Audit of receipts: Effective check on the assessment, collection, proper allocation of revenues and their credit in accounts. Audit of stores and stocks: To ensure that departmental rules/regulations governing procurem ent/ purchase, receipt, issue, custody, condemnation, sale and stock taking of s tores are strictly followed and to assess the quality of store management. Audit of Grants-in-aid: To ensure that Grants-in-aid are utilized for the purpose for wh ich these are given and that sound financial management practices are duly follo wed while incurring expenditure out of such grants.

Audit of Borrowings, Loans, Advances, Guarantees, Reserve Funds, Suspense Transa ctions and Interest Payment: To ensure that: (i) The transactions are within such limits if any prescribed and are in tun e with the authority that governs them; (ii) The transactions are correctly reflected in the accounts; (iii) The balances relating to these accounts represent amounts which are real izable and there exists a mechanism for periodic confirmation of balances. Audit of Non-Commercial Autonomous Bodies and Non-Government Institutions: (i) Provisions relating to audit of government corporations are contained in Sub-Section (2) & (3) of Section 19 of the CAG’s DPC Act 1971 and the relevant Ac ts, Rules and Regulations framed by competent authorities by virtue of the power s vested in them under relevant Acts of Parliament, Legislative Assemblies. (ii) Audit of certain authorities or bodies not falling under Section 19 of t he Act is governed by Sections 14, 15, 20. The terms ‘Body and Authority’ used in th ese sections or constitution have not been defined therein. However, ‘Authority’ has been interpreted to mean a person or body exercising power or command; while ‘Bod y’ has been interpreted to mean an aggregate of persons, incorporated or unincorpo rated. The terms ‘Body’ or ‘Authority’ used in Section 14, 15 and 20 of the Act will thu s include Companies, Corporations, etc. and is open to take up audit of the acco unts of the company or corporation not covered by section 19 of the Act, under s ection 14 or section 2, if the conditions specified in them are fulfilled. 1.2.2. TYPES OF AUDITING Statutory audit This is the audit governed by statute such as the company s Act. A legal ly required review of the accuracy of a company s or governments financial recor ds. The purpose of a statutory audit is the same as the purpose of any other aud it - to determine whether an organization is providing a fair and accurate repre sentation of its financial position by examining information such as bank balanc es, book-keeping records and financial transactions. External audit It is an audit conducted by an individual or firm that is independent of the company being audited. These independent auditors audit the books of a comp any generally once per year after the completion of the company’s fiscal year. The irrole is to give an opinion of the financial statements reflection of the statu s and operations of the company being audited. Final Audit Final audit is commenced when all account has been closed and final acco unts are been prepared. Internal audit This is a review of operations carried out sometimes continuously specia lly assigned staff with in the client business. An internal audit is conducted b y the permanent staff of the same office to detect weakness in system, procedure s and for the improvement. Social audit Social audit is performed to know the corporate social responsibility. Corporate audit A corporate audit is an examination of financial or operational procedur es at a corporation. Audits may be conducted by an internal or external corporat

e auditing team, and they can serve a variety of functions. While many people th ink of audits by tax authorities when they hear the word “audit”, corporate audits a re not just about taxes. Auditing is designed to confirm that companies are oper ating within the law, and their stated ethical standards are upheld by their pra ctices. In the financial sense, a corporate audit involves detailed inspection o f financial accounts and financial practices. Tax audit For the purpose of examining the correctness of tax return or returns fi led by a dealer or a class of dealers and to verify admissibility of various cla ims including claim of input tax credit made by dealer or a class of dealers, ta x audit shall be made of such number dealers as may be prescribed. Bank audit Bank audit means verifying bank NPA’s. (A Non-performing asset (NPA) is de fined as a credit facility in respect of which the interest and/or installment o f principal has remained ‘past due’ for a specified period of time.) Financial audit A historically oriented, independent evaluation performed for the purpos e of attesting to the fairness, accuracy, and reliability of financial data. Operational audit A future-oriented, systematic and independent evaluation of organization al activities. Financial data may be used, but the primary sources of evidence a re the operational policies and achievements related to organizational objectivi ties. Internal controls and efficiencies may be evaluated during this type of re view. 1.3. AUDITOR : Meaning An official whose job it is to carefully check the accuracy of business records. An auditor can be either an independent auditor unaffiliated with the c ompany being audited or a captive auditor, and some are elected public officials . The term is sometimes synonymous with "comptroller." Auditors are used to ensu re that organizations are maintaining accurate and honest financial records and statements. Auditors can work for many different entities, such as the IRS or a stat e government. Auditors are also found in the private sector at accounting firms. There are both internal and external auditors; internal auditors are usually em ployees or contractors with the company they are auditing, while external audito rs generally work either directly for or in conjunction with governmental agenci es. Auditors of financial statements can be classified into following categories: •

External auditor / Statutory auditor:

External auditor / Statutory auditoris an independent firm engaged by th e client subject to the audit, to express an opinion on whether the company s fi nancial statements are free of material misstatements, whether due to fraud or e rror. For publicly-traded companies, external auditors may also be required to e xpress an opinion over the effectiveness of internal controls over financial rep orting. External auditors may also be engaged to perform other agreed-upon proce dures, related or unrelated to financial statements. Most importantly, external auditors, though engaged and paid by the company being audited, are regarded as independent auditors.

•

Internal auditors

Internal auditors are employed by the organization they audit. They perf orm various audit procedures, primarily related to procedures over the effective ness of the company s internal controls over financial reporting. Due to the req uirement of Section 404 of the Sarbanes Oxley Act of 2002 for management to also assess the effectiveness of their internal controls over financial reporting (a s also required of the external auditor), internal auditors are utilized to make this assessment. Though internal auditors are not considered independent of the company they perform audit procedures for, internal auditors of publicly-traded companies are required to report directly to the board of directors, or a sub-c ommittee of the board of directors, and not to management, so to reduce the risk that internal auditors will be pressured to produce favorable assessments. •

Consultant auditors

Consultant auditors are external personnel contracted by the fir m to perform an audit following the firm s auditing standards. This differs from the external auditor, who follows their own auditing standards. The level of in dependence is therefore somewhere between the internal auditor and the external auditor. The consultant auditor may work independently, or as part of the audit team that includes internal auditors. Consultant auditors are used when the firm lacks sufficient expertise to audit certain areas, or simply for staff augmenta tion when staff are not available. •

Quality auditors

Quality auditorsmay be consultants or employed by the organization.Quali ty audits are performed to verify conformance to standards through review of obj ective evidence. A system of quality audits may verify the effectiveness of a qu ality management system. 1.3.1. QUALITIES OF AN AUDITOR To be successful, an auditor should possess certain desirable qualities, besides having his formal qualification. His qualification requires that he sho uld be a qualified chartered accountant. Besides, he should possess the followin g qualities: 1. 2. 3. 4. 5.

Tactfulness Cautious approach Firmness Good temperament Integrity etc.

• He should be tactful in doing the job of auditing. Exile doing auditing, he shou ld be cautious. • He should have integrity, and independence. • He should possess the knowledge of common business laws. Like mercantile law par tnership act, sale of goods act etc. • He should possess a thorough knowledge of taxation provisions prevalent in the c ountry. • An auditor is required to critically comment upon the financial statements. He s hould possess requisite expert in that field. He should occupy the position of a n expert in that field. • He should not be influenced directly or indirectly by others in discharge of his duties. • He must be cautious, methodical and accurate. • He should have through knowledge of all accounting principles and procedures. • He should also know the ways and means in which the business is being conducted.

1.4.

Audit Process The audit process is generally a ten-step procedure as outlined below. Notification

The auditor will send you a preliminary checklist. This is a list of doc uments (e.g. organization charts, financial statements) that will help the audit or learn about the unit before planning the audit. Planning After reviewing the information, the auditor will plan the revie w, conduct a risk workshop primarily to identify key risks and raise risk awaren ess, draft an audit plan, and schedule an opening meeting. Opening Meeting The opening meeting should include senior management and any adm inistrative staff that may be involved in the audit. During this meeting, the sc ope of the audit will be discussed. They should feel free to ask the auditors to review areas that they are concerned about. The time frame of the audit will be determined, and they should discuss any potential timing issues (e.g. vacations , deadlines) that could impact the audit.

Fieldwork After the opening meeting, the auditor will finalize the audit p lan and begin fieldwork. Fieldwork typically consists of talking with staff, rev iewing procedure manuals, and learning about the business processes, testing for compliance with applicable university policies and procedures and laws and regu lations, and assessing the adequacy of internal controls. Communication Throughout the process, the auditor will keep them informed, and they will have an opportunity to discuss issues noted and the possible solution s. Report Drafting After the fieldwork is completed, the auditor will draft a repor t. The report consists of several sections and includes: the distribution list, the follow-up date, a general overview of their unit, the scope of the audit, an y major audit concerns, the overall conclusion, and detailed commentary describi ng the findings and recommended solutions. They should read the draft report car efully to make sure there are no errors. If they find a mistake, inform the audi tor right away so that it can be corrected before the final report is issued. Management Response Once the report is finalized, we will request your management re sponses. The response consists of 3 components: whether they agree or disagree w

ith the problem, their action plan to correct the problem, and the expected comp letion date. Closing Meeting A closing meeting will be held so that everyone can discuss the audit report and review your management responses. This is an opportunity to dis cuss how the audit went and any remaining issues. Report Distribution The report is then distributed to the company, their manager(s), senior university administrators, internal audit, and the university s external auditors. They also distribute an audit survey to the audited unit to solicit f eedback about the audit. Feedback is important to them, since it can help us imp rove the audit process. Follow-up Follow-up reviews are performed on an issue-by-issue basis and t ypically occur shortly after the expected completion date, so that agreed-upon c orrective actions can be implemented. The purpose of the follow-up is to verify that they have implemented the agreed-upon corrective actions. The auditor will interview staff, perform tests, or review new procedures to perform the verifica tion. They will then receive a letter from the auditor indicating whether they h ave satisfactorily corrected all problems or whether further actions are necessa ry. If further corrective action is required, they will need to write a manageme nt response. Otherwise, the issue will be reported as resolved.

AUDITORS PROFILE 2. AUDITOR’S PROFILE RAJAMANI VINOD & CO is a Chartered Accountants firm consisting of two pa rtners namely Sri.R.Rajamani and Sri.R.Vinod. While Sri.R.Rajamani has been carr ying on the business in his individual capacity for more than 42 years, and then entered into partnership with Sri.R.Vinod under reference on 03/03/2012.The fir m is located at 21/1, Kalingarayan Street, Ramnagar, Coimbatore. Ithas more than 35 clients. RAJAMANI VINOD & CO has a Manager and Data entry operators. Mrs.S.Meenak shi has finished her degree in Masters of Commerce and has been working under Sr i.R.Rajamani. They also give internship training for students who have cleared C hartered Accountancy-Inter mediate level (IPCC). The firm is given the professional service in the following fields; Corporate audit Trust audit Bank audit Tax audit Income tax: Consultancy Income tax: Representation Service tax: Consultancy Service tax: Representation VAT: Consultancy VAT: Representation Corporate Financial Advices Project study and feasibility analysis Other Specialist Advice with Financial Institution All matters allied to the above are.

2.1.

ORGANOGRAM

COMPANY’S PROFILE 3. COMPANY’S PROFILE 3.1. PLASTALLS It is a partnership firm carrying on business in manufacturing industria l plastic components for various uses. PLASTALLS was established in the year 1970. The foundation of the compan y was laid by the late Mr.P.R.Srinivasalu. The managing partner of the company, Mr.S.Govindarajan has made the company flourish with his vastexperience of more than 30 years in the field. The company carries out all its operations from Coim batore, Tamil Nadu. It is an ISO 9001:2008 Certified Manufacturer. The aim of th e company is to satisfy the customer requirements through competitive pricing an d continuousimprovement of the system when it comes to the manufacturing of Inje ctionMoulded plastic components and Bakelite components. Infrastructure They have a well equipped infrastructure that includes machinery of plas tic from 20 tonne to 100 tonne and Bakelite injection from 30 tonne to 250 tonne . They have In-house tool room with modern machineries with 3d design labs. Thei r Stale of art infrastructure helps them to meet their customer’s requirements pre cisedesign with the perfection of the case. Team Backing their success are the efforts of a diligent workforce having the technical know-how in component designing and production. Supported by a teamof quality checkers, their workforce enables them in the production of premiumcompo nents in bulk as per the varied needs of customers. Network They manage to serve clients based in different corners of the globe lik eUSA, UK, Switzerland, Germany and Kuwait with the assistance of a well-coordina ted export network. Their widespread network also enables them in delivering the components right within the time-frame specified by the clients of other countr ies too. 3.2. THE COIMBATORE COTTON MILLS ASSOCIATION The Coimbatore Cotton Mills association is an association of traders. It is a Non Profit Organization solely engaged in helping and promoting the intere st of India’s Textile Industry, particularly in Coimbatore. It is registered under Societies Registration Act. Provisions of Companies Act are not applicable to r egister a cooperative society. In this association there are 134 members who are working for the welfare of Cotton Mills and India’s growth. Activities: Take all steps for promoting, protecting, supporting, encouraging or opposing le gislative and other measures affecting the interest of the textiles. Create and encourage co-operative feeling and unanimity amongst the textile mill s on all subjects connected with their common interest. Collect, collate and circulate policy related circulars, press releases and all relevant data. Initiate research studies on various textile related topics-cotton economy, yarn

markets and labour. Protect and promote textile economy offer industrial Engineering and HRD Service . 3.3. INDIVIDUAL CLIENTS The firm is also indulged in the filing of returns of income for individ uals. Income of the following clients were filed, Smt. KumudVasudevan. Dr. M. Mallikarjunan. Dr. V.V. Parthasarathy. Sri. Sundara Raman. Sri. Suguntha Raman. All the above clients except Dr.V.V.Parthasarathy and Dr.Mallikarjunan have reti red from profession and have only income from house property and other sources.

PRIMARY AREA OF TRAINING 4.

PRIMARY AREA OF TRAINING

4.1. OPERATION OF AUDIT: The audit was operated / conducted with the help of following techniques , Vouching: In vouching every transaction is checked with it documentary evidence. D ocumentary evidence includes vouchers, invoices, and goods inward and outward no tes, cash memos and receipts. It is also checked that the transaction is authori zed by a proper person having powers to do so. Verification: When vouching is complete then the verification of assets and liabilitie stakes place. Assets of the firm are verified by checking that if the assets are held by others then a letter is written to them to verify their presence and th eir title. For confirmation of major debtors a letter is written to them to conf irm the balance due from them. To confirm bank balance account, statement is rec eived from the client s banker. For the confirmation of liabilities letters to t he creditors is written to confirm their balance due to them. In order to check the stock of the client, stocktaking is done, where the members of audit team vi sits the storerooms of the factory and see the counting of the stock done by the store keepers and if they find something wrong they themselves count the stock. During the stock taking storerooms records are also checked to see that

they are maintained properly. If due to some reason any asset cannot be verified then a certificate is received from the management certifying the existence of the asset. Ticking: During the checking of various books, the entries that were checked were marked/ticked with red ball pen indicating that the entry has been examined for certain purpose. Variously shaped marks were used to denote checking of additio ns; postings carry forwards, balances etc. Posting Check: Then it was checked whether the transactions are correctly and accuratel y posted to ledger or not. Special care in checking posting to personal ledgers in needed as to names and titles of accounts; otherwise a wrong posting may rema in undetected. Cross Checking: It is the comparison of entries in two or more books or of an entry in a book with its supporting evidence or voucher. My seniors assisted me in this st ep. Accuracy of cross checking plays a vital role in the process of auditing. Th erefore, it should be made with due care. Trial Balance Checking: Then trail balance was checked and important balances were noted in the working papers for reference use in further process. If during the course of aud it different queries or unexplained events are seen, then these are noted and ex planations asked from management and they are asked to make necessary adjustment s. If during the course of audit some irregularity is witnessed that is also rep orted to the management and reported in the auditor’s report.

Analytical Procedure: After the end of the audit analytical procedure is adopted in order to c onfirmthe accuracy and correctness of the results obtained from above procedures , Profit and Loss Account and Balance Sheet. In analytical procedure results are compared with prior period results, ratios, expected results and industrial inf ormation. Any major difference is looked into. At this stage the stock valuation , Material variations, Financial Ratio, and Variance Analysis are done. 4.2.

E Filing: The process of electronically filing the income tax returns through inte rnet is known as e-filing. It is mandatory for Companies and Firms requiring Sec tion 44AB audit to submit the Income tax returns electronically for AY 2007-08 a s well as AY 2008-09. Any Company and Firm requiring Section 44AB audit return w ithout an e-filing receipt will not be accepted. The Income Tax Department is ke en to encourage e-filing of IT returns by all taxpayers in view of the following benefits to taxpayers. • Anywhere-Anytime Filing • No long queues • No Personnel Interface • Quick Processing • Accurate data in return 4.3.

Chapter VI A Deductions To give impetus to savings these deductions are given on certain investm ents or certain expenditure made by the assessee. The chapter VIA deductions doe s not form part of the income; they are to encourage long term savings and speci fic expenditure.

FIELD WORK 5.

FIELD WORK

The Income & Expenditure account of THE COIMBATORE COTTON MILLS ASSOCIAT ION was verified. Only the revenue items (E.g.: repairs, wages, depreciation) we re included, all the capital items (E.g.: purchase of machinery, land, etc.,) we re taken to the balance sheet. The account had been prepared based on accrual ba sis. All the revenue items were shown on the income side and all the expenses an d losses were shown on the expenditure side. It shows the net operating result i n the form of surplus (i.e. excess of income over expenditure) or deficit (i.e. excess of expenditure over income), which is transferred to the capital fund sho wn in the balance sheet. Trading & Profit/ Loss account was prepared for PLASTALLSorganisation. A ll the items such as opening stock, purchases, direct expenses (E.g.: wages, car riage inwards, assembling charges, etc.), returns inward were entered on the deb it side of the trading a/c and sales, returns outward, closing stock were put on the credit side. The gross profit arrived at trading a/c is transferred to profit or loss a/c and other necessary adjustment relating to outstanding expenses, prepaid expenses, and indirect expenses (E.g.: office expenses, salary, depreciation, etc.) are ma de and then net profit is calculated. This net profit is transferred to the cred it side of the Balance sheet. All the errors in the profit/ loss account were found and necessary veri fication was made, and then the balance sheet was prepared according to the prov isions of Schedule VI of The Companies Act, 1956.

Prepared Receipts & Payments a/c of THE COIMBATORE COTTON MILLS ASSOCIAT IONfor the year ended 31.3.2012. The statement was prepared using the ledger acc ounts and only cash transactions were to be considered. All the incomes such as Life membership fee, Entrance fee, fixed interest, etc., were on the receipt sid e and other expenses such as Audit fee, salary, rent, printing & stationery, pos tage etc., were posted on the payments side of the Receipts & Payments account. The Receipts and Payments account that was preparedmanually was later posted to MS Excel.

Interest certificate was verified for various clients and the amount of interest was also calculated and tax on income was computed was computed for; a) Dr. M. Mallikarjunan. b) Dr. V.V. Parthasarathy. c) Sri. Sundara Raman. d) Smt. Suguntha Raman. e) Smt. KumudVasudevan. Their income was computed and was posted accordingly using Compu Tax software. Had a detailed knowledge on Chapter VI A deductions. It covers the foll owing sections, (i) 80 CCC: Payment of premia for annuity. The premium must plan of LIC or a ny other insurer, be deposited to keep Deduction is available uptoa in force a c ontract for maximum of Rs. 10,000. (ii) 80D: Payment of medical insurance premia. Deduction is available uptoRs. 10,000. (iii) 80DD: Deduction of Rs. 40,000 in respect of a) Expenditure incurred on medical treatment, (including nursing), training and rehabilitation of a handicapped dependent relative. b) Payment or deposit to specified scheme for maintenance of dependent hand icapped relative. (iv) 80DDB: Deduction of Rs. 40,000 in respect of medical expenditure incurre d. (v) 80E: Deduction in respect of repayment of loan taken uptoRs. 40,000 per year. (vi) 80G: Donations to certain funds, charitable institutions etc. (vii) 80GG: Deduction available is the least of a) Rent paid less 10% of total income. b) Rs. 2,000 per month. c) 25% of total income. (viii) 80L: Interest/Dividend/Income from : a) Any government security (state/central). b) NSC, VI, VII & VIII issues. c) Notified debentures of public undertaking, co operative societies/ land mortgage bank or Land development banks. d) Notified National Deposit Scheme. e) Any other deposit scheme framed by central govt. and notified. f) Deposit under Post Office Monthly Income Account Rules, 1987. g) Deposit with banking companies. h) Deposit with banks established under any law made by Parliament. i) Deposits with financial corporations approved by the central government. j) Deposits with any authority constituted in India under any law for planning, development or improvement of cities, towns and villages etc. k) Deposits with co-op. Societies. l) Deposits, with any public companies providing long term fina nce for construction or purchase of houses. m) Income from U.T.I. n) Income from Units of Mutual Fund specified under clause (23D) of Sec. 10 . (ix) 80U: Deduction of Rs. 40,000/- to an individual who suffers from a physi cal disability (including blindness) or mental retardation. FORM 3CD While furnishing the particulars in Form No.3CD the following were considered: (a) If a particular item of income/expenditure is covered in more than one of th e specified clauses in the statement of particulars, care should be taken to mak e a suitable cross reference to such items at the appropriate places.

(b) If there is any difference in the opinion of the tax auditor and that of the assessee in respect of any information furnished in Form No. 3CD, the tax audit or should state both the view points and also the relevant information in order to enable the tax authority to take a decision in the matter. (c) If any particular clause in Form No.3CD is not applicable, he should state t hat the same is not applicable. (d) In computing the allowance or disallowance, he should keep in view the law a pplicable in the relevant year, even though the form of audit report may not hav e been amended to bring it in conformity with the amended law. (e) In case the prescribed particulars are given in part or piecemeal to the tax auditor or relevant form is incomplete and the assessee does not give the infor mation against all or any of the clauses, the auditor should not withhold the en tire audit report. In such a case, he can qualify his report on matters in respe ct of which information is not furnished to him. In the absence of relevant information, the tax auditor would have no option but to state in his report that the relevant information has not been furnished by the assessee. (f) The information in Form No. 3CD should be based on the books of accounts, re cords, documents, information and explanations made available to the tax auditor for his examination.

AN ASSESSMENT OF THE INTERNSHIP AN ASSESSMENT OF THE INTERNSHIP Internships are integral parts of many professional degree programs. Pote ntially, they make significant contributions to an education experience. Well or ganized and carefully supervised programs enhance student’s ability to integrate a cademic knowledge with practical application. This internship program will improve my job/career opportunities af ter graduation, create relevance for past and future classroom learning, and dev elop workplace social and human relations skills. I had a detailed knowledge regarding the Preparation of Income & E xpenditure account, Receipts & Payments account, and Preparation of Balance shee t under Schedule VI format of the Companies Act 1956, FORM 3CD, Chapter VI A ded uctions and auditing field as a whole in this training program. 6.

CONCLUSION 7.

CONCLUSION

Thus the internship training at RajamaniVinod& co helped to gain practic al knowledge about the functioning of auditing accounts. All the information fur nished in the report is useful for the career development and advancement. Thus training was beneficial not only for academic purpose but has given some guideli nes to develop the personal skills and attitude towards the business.This traini ng was a good experience for me to watch closely the real happening in this comm ercial world.I express my sincere gratitude to all those who helped me in comple ting my project and making my dream come true of gaining organizational knowledg e.

BIBLIOGRAPHY BIBLIOGRAPHY Websites: Wikipedia www.scribd.com bilaras.hubpages.com cagroupindia.com taxguru.in www.investopedia.com Books: Practical Auditing- B.N.Tandon Principles of Auditing-DinkarPagare

ANNEXURES ANNEXURES FORM NO. 3CA [See rule 6G (1) (a)] This form is considered as auditor report under section 44AB of the Inco me Tax Act, 1961. This is prepared for the purpose of certified the reports by a uditors as per the statute. Some important points are: i. The audited profits and loss account for the year ended ii. The audited balance sheet.

FORM NO. 3CD [See rule 6G (2)] It is for the purpose of furnishing details required under section 44AB of Income Tax Act, 1961. This statement comprises two parts, namely: i. Part – A and ii. Part – B Under part – A: • Name of the assessee • Address • Permanent Account Number • Status • Previous year ended • Assessment year Under part –B: • Firm of Association of persons • Nature of business or profession • Books of account • Profit and loss account • Method of accounting employed in the previous year • Method of valuation of closing stock • Particulars of depreciation • Particulars of any liability of a contingent nature • Particulars of income or expenditure • Accounting ratios Finally, the FORM NO. 3CA & FORM NO. 3CD are verified by the auditor and Signs. If the above said information is true and fair. FORM 3CD FORM NO. 3CD [See rule on 6G(2) ] Statement of Particulars required to be furnished under section 44AB of the Inco me Tax Act,1961 PART – A 1 Name of the Assessee 2 3

Address Permanent Account Number

4

Status

5

Previous year ended

6

Assessment year 2012-2013

31ST MARCH, 2012

PART – B 7 (a) If firm or Association of Persons, indicate names of partners /m embers and their profit sharing ratios. (b) If there is any change in the partners / members or their sharin g ratios, the particulars of such change. 8 (a) Nature of business or profession. (b) If there is any change in the nature of business or profession, the particulars of such change.

9 (a) Whether books of accounts are prescribed under section 44AA, if yes, list of books so prescribed. (b) Books of account maintained (In case books of account are mainta ined in a computer system mention the books of account generated by such compute r by such computer system.) (c) List of books of account examined. 10 Whether the profit and loss account includes any profits and gai ns assessable on presumptive basis, if yes, indicate the amount and the relevant section (44AD, 44AE, 44AF, 44B, 44BB, 44BBA, 44BBB or any other relevant sectio n). 11 (a) Method of accounting employed in the previous year. MERCANTI LE SYSTEM (b) Whether there has been any change in the method of accounting em ployed vis-à-vis the method employed in the immediately preceding previous year . (c) If answer to (b) above is In the affirmative, give details of su ch change, and the effect thereof on the profit or loss. (d) Details of deviation, if any, in the method of accounting employ ed in the previous year form the accounting standards prescribed under section 1 45 and the effect thereof on the profit or loss. 12 (a) Method of valuation of closing stock employed in the previous ye ar. AT COST OR NET REALISABLE VALUE WHICHEVER IS LOWER (b) Details of deviation, if any, from the method of valuation presc ribed under section 145 A, and the effect thereof on the profit or loss. 12A. Give the following particulars of the capital asset converted in to stock-in-trade: (a) (b) (c) (d) 13

Description of capital asset; Date of acquisition; Cost of acquisition; Amount at which the asset is converted into stock-in trade., Amounts not credited to the profit and loss account, being, -

(a) the items falling within the scope of section 28; (b) the proforma credits, drawbacks, refunds of duty of customs or e xcise, or refunds of sales tax, where such credits, drawbacks or refunds are adm itted as due by the authorities concerned; (c) escalation claims accepted during the previous year; (d) any other item of income; (e) 14 1961 in respect lowing form:(a) (b)

Capital receipt, if any. Particulars of depreciation allowable as per the Income Tax Act, of each asset or block of assets, as the case may be, in the fol Description of asset/block of assets. Rate of depreciation.

(c) Actual cost or written down value, as the case may be. (d) Addition/deductions during the years with dates; in the case of any addition of an asset, date put to use ; including adjustments on account of (i) Modified Value Added Tax credit claimed and allowed under the Ce ntral Excise Rules,1944 in respect of assets acquired on or after 1st March,1944 , (ii) change in the rate of exchange of currency, and (iii) Subsidy or grant or reimbursement, by whatever name called.

(e)

Depreciation allowable

(f) Written down value at the end of the year. 15 Amount admissible under section(a)33AB (b)33ABA (c)33AC(wherever applicable) (d)35 (e)35ABB (f)35AC (g)35CCA (h)35CCB (i)35D (j)35DD (k)35DDA (l)35E (a) debited to the profit and loss account (showing the amount debit ed and deduction allowable under each section separately); (b) Not debited to profit and loss account. 16 (a) Any sum paid to an employee as bonus or commission for services rendered, where such sum was otherwise payable to him as profits or dividend. [s ection 36(1)(ii)] (b) Any sum received from the employees towards contributions to any provident fund or superannuation fund or any other fund mentioned in section 2( 24) (x); and due date for payment and the actual date of payment to the concerne d authorities under section 36(1) (va). 17 Amount debited to the profit and loss account, being:(a) expenditure of capital nature; (b)

expenditure of personal nature;

(c) expenditure on advertisement in any souvenir, brochure, tract, p amphlet or the like, published by a political party; (d) expenditure incurred at club,(i)

as entrance fees and subscriptions;

(ii) as cost for club services and facilities used; (e)(i) expenditure by way of penalty or fine for violation of any law f or the time being in force; (ii) any other penalty or fine; (iii) expenditure incurred for any purpose which is an offence or whic h is prohibited by law; (f) amounts inadmissible under section 40(a); (g) interest, salary, bonus, commission or remuneration inadmissible under section 40(b)/40(ba) and computation thereof; (h) (A) whether a certificate has been obtained from the assessee re garding payments relating to any expenditure covered under section 40A(3) that t he payments were made by account payee cheques drawn on a bank or account payee bank draft, as the case may be; (B) amount inadmissible under section 40A(3), read with rule 6DD [with break-up of inadmissible amounts; (i) provision for payment of gratuity not allowable under section 40 A(7); (j) any sum paid by the assessee as an employer not allowable under section 40(9); (k) Particulars of any liability of a contingent nature. (l) amount of deduction inadmissible in terms of section 14A in resp ect of the expenditure incurred in relation to income (m)

amount inadmissible under the proviso to section 36(1)(iii);

17A 17A. Amount of interest inadmissible under section 23 of the Mic ro, Small and Medium Enterprises Development Act, 2006 18 Particulars of any payment made to persons specified under secti on 40A (2) (b). 19 Amounts deemed to be profits and gains under section 33AB or 33A

C or 33ABA. 20 Any amounts of profits chargeable to tax under section 41 and co mputation thereof 21 (i) In respect of any sum referred to in clause (a),(c),(d),(e) or ( f) of section 43B the liability for which:(A) pre-existed on the first day of the previous year but was not al lowed in the assessment of any preceding previous year and was (a) paid during the previous year; (b) not paid during the previous year; (B) was incurred in the previous year and was (a) paid on or before the due date for furnishing the return of inc ome of the previous year 139(1)(a); (b) Not paid on or before the aforesaid date. * state whether sales tax, customs duty, excise duty or any thei r indirect tax, levy, cess, impost etc. is passed through the profits and loss a ccount 22 (a) Amount of Modified Value Added Tax Credits availed of or utilize d during the previous year and its treatment in profit and loss account and trea tment of outstanding Modified Value Added Tax Credits in accounts, (b) Particulars of income or expenditure of prior period credited or debited to the profit and loss account. 23 Details of any amount borrowed on hundi or any amount due thereo n (including interest on the amount borrowed) repaid, otherwise than through an account payee cheque,(Section 69D) 24 (a) * particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year :i) name, Address and permanent account number (if available with th e assessee) of the lender or depositor; ii) Amount of loan of deposit taken Accepted; iii) Whether the loan or deposit was squared up during the previous y ear; iv) Maximum amount outstanding in the account ay any time during the previous year; v) Whether the loan or deposit was taken or accepted otherwise than by an account payee Bank cheque or account payee bank draft *(These particulars need not be given in case of a Government Co mpany, a banking company or a corporation established by a Central ,State or Pro vincial Act.) (b) Particulars of each repayment of loan or deposit in an amount ex ceeding the limit specified in section 269T made during the previous year :i) name, address and permanent account number (if available with th e assessee) of the payee; ii) Amount of the repayment; iii) Maximum amount outstanding in the account at any time during the previous year; iv) Whether the repayment was made otherwise than by account payee c heque or account payee bank draft. (c) Whether a certificate has been obtained from the assessee regard ing taking or accepting loan or deposit, or repayment of the same through an acc ount payee cheque or an account payee bank draft. The particulars (i) to (iv) at (b) and the Certificate at (c) ab ove need not be given in the case of a repayment of any loan or deposit taken or accepted from Government, Government company, banking company or a corporation established by a Central, State or Provincial Act; 25 Details of brought forward loss or depreciation allowance, in th e following manner, to the extent available :

(a) Sr. Assessment | Nature of | Amount as returned | Amount as assessed | Remarks No. Year | loss / | (in Rs.) | (give reference to | | allowance | | relevant order) | | (in Rs.) | | | (b) whether a change in shareholding of the company has taken place in the previous year due to which the losses incurred prior to the previous year cannot be allowed to be carried forward in terms of section 7 26 Section-wise details of deductions, if any admissible under Chap ter VIA. 27 (a) Whether the assessee has complied with the provisions of Chapter XVII-B regarding deduction of tax at source and regarding the payment thereof t o the credit of the Central Government. (b) If the provisions of Chapter XVII-B have not been complied with, please give the following details*, namely:AMOUNT (i) Tax deductible and not deducted at all (ii) Shortfall on account of lesser deduction than required to be ded ucted (iii) Tax deducted late 28 (a) In the case of a trading concern, give qualitative details of p rincipal items of goods traded; i) opening stock; ii) iii)

purchases during the previous year; sales during the previous year;

iv)

closing stock;

v)

Shortage/excess, if any.

(b) In the case of manufacturing concern, give quantitative details of the principal items of raw materials, finished products any by-products. (A)

Raw materials;

i)

opening Stock;

ii)

purchases during the previous year;

iii)

consumption during the previous year;

iv)

sales during the previous year;

v)

closing stock;

vi)

* yield of finished products;

vii)

* percentage of yield;

viii)

* shortage/excess, if any;

(B)

Finished products / By products :

I)

opening stock;

ii)

purchases during the previous year;

iii) iv)

quantity manufactured during the previous year; sales during the previous year;

v)

closing stock;

vi)

Shortage/excess, if any. * Information may be given to the extent available. 29 In the case of Domestic Company, details of tax on distributed p rofits under section 115-O in the following forms :(a) total amount of distributed profits; (b)

total tax paid thereon;

(c)

Dates of payment with amounts.

30 Whether any cost audit was carried out, if yes, enclose a copy o f the report of such audit [See Section 139(9)]. 31 Whether any audit was conducted under the Central Excise Act, 19 44, if yes, enclose a copy of the report of such audit. 32 Accounting ratios with calculations as follows :(a) Gross profit/Turnover; (b) Net profit/Turnover; (c) Stock-in-Trade/Turnover; (d) Material consumed/Finished goods produced. AS PER REPORT OF EVEN DATE ANNEXED FOR XYZ ASSOCIATES CHARTERED ACCOUNTANTS PROPRIETOR PLACE : DATED : Notes: 1. The Annexure to this Form must be filled up failing which the Form will be co nsidered as incomplete. 2. This Form and the Annexure have to be signed by the person competent to sign Form No. 3CA or Form No. 3CB, as the case may be.

Receipts & Payments of THE COIMBATORE COTTON MILLS ASSOCIATION for the year ende d 31.3.2012.

PARTICULARS RECEIPTS PAYMENTS Opening Cash balance 3254.00 Opening Bank balance 46428.14 To Audit fee 1500.00 To Fixed interest 48416.00

Fixed interest 2000.00 To Entrance fee 100.00 To Life membership fee 3500.00 Salary 10500.00 Rent 6000.00 Printing & Stationery 1696.00 Postage 1224.00 Subscription 3083.00 Meeting expenses 2000.00 Sundry expenses 600.00 Fixed deposit 678994.00 To Fixed deposit 675000.00 Closing Cash balance 21651.00 Closing Bank balance 47450.14 776698.14

776698.14

INDEPENDENT AUDITOR’S REPORT Board of Directors, Stockholders, Owners, and/or Management of ABC Company, Inc. 123 Main St. Any town, Any Country We have audited the accompanying balance sheet of ABC Company, I nc. (the “Company”) as of December 31, 20XX and the related statements of income, re tained earnings, and cash flows for the year then ended. These financial stateme nts are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards gen erally accepted in (the country where the report is issued). Those standards req uire that we plan and perform the audit to obtain reasonable assurance about whe ther the financial statements are free of material misstatement. An audit includ es examining, on a test basis, evidence supporting the amounts and disclosures i n the financial statements. An audit also includes assessing the accounting prin ciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above prese nt fairly, in all material respects, the financial position of the Company as of December 31, 20XX, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in (the country where the report is issued). AUDITOR’S SIGNATURE Auditor’s name and address Date = Last day of any significant field work This date should not be dated earlier than when the auditor has sufficient audit evidence to support the opinion. BALANCE SHEET FORMAT - SCHEDULE VI OF COMPANIES ACT, 1956. Name of the Company Notes forming part of the financial statements GN 8.1.2 Note 4 Reserves and surplus Ref. No. Particulars As at 31 March, 20X2 As at 31 March, 20X1

BS 6.B.i.a (a) Capital reserve GN 8.1.2.2 Opening balance GN 8.1.2.10 Add: Additions during the year (give details) GN 8.1.2.10 Less: Utilized / transferred during the year (give details)

Closing balance BS 6.B.i.b (b) Capital redemption reserve GN 8.1.2.3 Opening balance GN 8.1.2.10 Add: Additions during the year Transferred from surplus in Statement of Profit and Loss Others (give details) GN 8.1.2.10 Less: Utilized during the year (give details) Closing balance BS 6.B.i.c (c) Securities premium account GN 8.1.2.4 Opening balance GN 8.1.2.10 Add : Premium on shares issued during the year GN 8.1.2.10 Less : Utilized during the year for: Issuing bonus shares Writing off preliminary expenses Writing off shares / debentures issue expenses Premium on redemption of redeemable preference shares / debentures Buy back of shares Others (give details) Closing balance BS 6.B.i.d (d) Debenture redemption reserve GN 8.1.2.5 Opening balance GN 8.1.2.10 Add: Additions during the year Transferred from surplus in Statement of Profit and Loss Others (give details) GN 8.1.2.10 Less: Utilized / transferred during the year (give details) BS GN GN GN

Closing 6.B.i.e 8.1.2.6 8.1.2.10 8.1.2.10

balance (e) Revaluation reserve Opening balance Add: Addition on revaluations during the year Less: Utilized for set off against depreciation

Written back / other utilizations during the year (give details) BS GN GN ng GN ar

Closing 6.B.i.f 8.1.2.7 8.1.2.10 the year 8.1.2.10

balance (f) Share options outstanding account Opening balance Add: Amounts recorded on grants/modifications/cancellations duri Less: Written back to Statement of Profit and Loss during the ye

Transferred to Securities premium account GN 8.1.2.10 Less: Deferred stock compensation expense Closing balance (g) General reserve Opening balance GN 8.1.2.10 Add: Transferred from surplus in Statement of Profit and Loss GN 8.1.2.10

Less: Utilized / transferred during the year for:

Issuing bonus shares Others (give details) Closing balance AS 11.40.b (h) Foreign currency translation reserve Opening balance GN 8.1.2.10 Add / (Less): Effect of foreign exchange rate variations during

the year GN 8.1.2.10 Add / (Less): Transferred to Statement of Profit and Loss on dis posal of the net investment in non-integral foreign operations Closing balance GN 8.1.2 Note 4 Reserves and surplus (contd.) Ref. No. Particulars As at 31 March, 20X2 As at 31 March, 20X1

(i) Hedging reserve Opening balance GN 8.1.2.10 Add / (Less): Effect of foreign exchange rate variations on hedg ing instruments outstanding at the end of the year GN 8.1.2.10 Add / (Less): Transferred to Statement of Profit and Loss Closing BS 6.B.i.g GN 8.1.2.8 ve) Opening GN 8.1.2.10 GN 8.1.2.10 Closing BS 6.B.i.h BS 6.B.iii GN 8.1.2.9 GN 8.1.2.12

balance (j) Other reserves (specify the nature and purpose of each reser balance Add: Additions / transfers during the year Less: Utilizations / transfers during the year balance

(k) Surplus / (Deficit) in Statement of Profit and Loss

Opening balance GN 8.1.2.10 Add: Profit / (Loss) for the year PL 5(iv)(b) GN10.10 Amounts transferred from: General reserve Other reserves (give details) GN 8.1.2.10 Less: Interim dividend BS 6.U Dividends proposed to be distributed to equity shareholders (
___ per sh are) BS 6.U Dividends proposed to be distributed to preference shareholders (
___ pe r share) Tax on dividend PL 5(iv)(a) GN 10.9 Transferred to: General reserve Capital redemption reserve Debenture redemption reserve Other reserves (give details) Closing balance Total