A shorter, quieter audit
When schedules already exist and reconcile, the audit becomes review rather than reconstruction, and fewer adjustments land in the final accounts.
Finance Function
Accounting & Assurance Advisory
Accounting policy, standards application and Schedule III presentation for Indian companies, so that the books your statutory auditor receives are already reconciled, documented and supported by a maintained schedule file.
Overview
Books that are complete are not the same as books that are defensible. The gap between the two shows up once a year, under time pressure, in front of the auditor.
The symptoms are familiar. A trial balance that balances but carries a suspense account nobody can explain. Revenue recognised on invoice date because that is what the system does, not because the accounting standard says so. A fixed asset register kept in a spreadsheet that no longer agrees with the ledger. Provisions that were reasonable three years ago and have not been revisited since. An audit that runs into September because the schedules are built from scratch each year.
This engagement rebuilds the accounting position underneath the numbers. We set the policy, apply the correct standard, present the statements in the format the Companies Act requires, and leave behind a schedule set that is maintained monthly instead of reconstructed annually.
Scope of engagement
The engagement is scoped after the diagnostic, from the following work items. Not every company needs all of them, and we will say which ones you do not.
Group and consolidation work is scoped separately where subsidiaries or joint arrangements exist.
- Applicability memorandum testing whether AS or Ind AS governs your accounts, measured against the thresholds in the Companies (Indian Accounting Standards) Rules, 2015, and against any lender or investor requirement that overrides the statutory position
- Written accounting policy manual covering revenue, inventory, fixed assets, impairment, provisions, employee benefits, borrowing costs, foreign currency and related party transactions
- Revenue recognition review against AS 9 or Ind AS 115, including performance obligations, variable consideration, contract assets and unbilled revenue
- Lease classification and, under Ind AS 116, the right-of-use asset and lease liability workings with the discount rate basis documented
- Expected credit loss provisioning under Ind AS 109, or provisioning policy and ageing-based matrix where AS applies
- Fixed asset register rebuilt and reconciled to the ledger, with Schedule II useful lives applied and any deviation supported by a technical basis
- Employee benefit accounting under AS 15 or Ind AS 19, including the actuarial valuation inputs for gratuity and leave encashment
- Deferred tax computation under AS 22 or Ind AS 12, with the temporary difference schedule tied to the tax computation
- Related party identification and disclosure under AS 18 or Ind AS 24, with confirmations obtained and the Section 188 position tested
- Balance sheet and statement of profit and loss recast into Schedule III presentation, including ageing disclosures for trade receivables, trade payables, capital work in progress and intangible assets under development
- CARO 2020 readiness review clause by clause, with the evidence for each response identified
- Audit trail testing under the electronic books requirement: whether the edit log exists, is enabled, cannot be disabled, and is retained
- Audit schedule file built and handed over, then maintained through the monthly close
Deliverables
- Accounting policy manual, written for your business rather than adapted from a template
- Applicability memorandum on AS or Ind AS, with the reasoning recorded
- Gap register listing every difference between current treatment and required treatment, with an impact estimate and a remediation owner
- Restatement or reclassification workings where prior period figures move
- Draft financial statements in Schedule III format with notes and disclosure working papers
- Fixed asset register reconciled to the ledger, with depreciation recomputed
- Audit schedule file: ageing, provisions, accruals, prepaid, related party, deferred tax and confirmation control
- CARO 2020 readiness checklist with evidence references
- Audit trail position note
- Closing memorandum recording judgements taken and the basis for each
Process
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Diagnostic
We review the last two audited financial statements, the current trial balance, the auditor’s management letter, significant contracts and the accounting system configuration. The output is a gap register, not an opinion.
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Policy and applicability
Standards applicability is settled first, because it determines everything after it. The policy manual is drafted, discussed with your team, and agreed in writing before any restatement work begins.
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Remediation
Registers are rebuilt, computations are redone, and adjusting entries are drafted with a working paper behind each one. Entries are posted by your team after approval, never by us unilaterally.
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Presentation and schedule set
Statements are recast into Schedule III format and the permanent schedule file is built. CARO readiness and the audit trail position are documented at this stage.
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Audit support and handover
We respond to auditor queries alongside your team and track open points to closure. The schedule set is then handed to whoever will maintain it monthly, with a walkthrough.
Benefits
Books that survive scrutiny
Investors and acquirers test revenue cut-off, provisioning and related party disclosure first. Documented judgements shorten that conversation.
Comparable periods
Consistent policy applied across periods means variance analysis reflects the business rather than a change in accounting treatment.
Known positions
Where a treatment is arguable, it is written down with its basis, so the position is a considered one rather than something discovered later.
Industries served
Manufacturing brings inventory valuation, absorption of overheads and capital work in progress ageing. Technology and SaaS brings deferred revenue, contract cost capitalisation and multi-element arrangements. Real estate and infrastructure brings percentage-of-completion judgement, borrowing cost capitalisation and long-cycle receivables. Financial services brings expected credit loss and fair value measurement. Healthcare brings payer receivables, contractual allowances and equipment depreciation policy.
Typical timeline
- Diagnostic and gap register: 7 to 10 business days
- Applicability memorandum and draft policy manual: a further 10 business days
- Remediation and register rebuild: 3 to 5 weeks, driven by the size of the gap register
- Schedule III recast, schedule file and CARO readiness: 2 weeks
- Audit support: through your audit window, by arrangement
Engagement model
Contracted as a defined-scope engagement with agreed phases and a written deliverable list. Where you want the schedule set maintained after handover, that continues as a monthly retainer with thirty days notice, quoted separately.
Delivery is virtual, using read access to your accounting system and a shared workspace for working papers. Adjusting entries are drafted by us and posted by your team after approval. Every judgement is recorded in a working paper at the time it is taken, not reconstructed later.
What is not included
- Statutory audit, tax audit under Section 44AB, internal audit and any other attest engagement. We are not your auditor and will not accept work that compromises your auditor’s independence.
- Any audit opinion, review conclusion or certificate. Nothing in this engagement constitutes assurance.
- Signing or filing of financial statements, ROC forms, tax returns or GST returns.
- Actuarial valuation of gratuity and leave benefits. We specify the inputs and review the output, but the valuation is performed by an actuary you appoint.
- Independent valuation of assets, businesses or securities, and impairment testing that requires a registered valuer’s report.
- Bookkeeping and voucher entry. We do not maintain your primary records.
- Group consolidation, business combination accounting and purchase price allocation, unless separately scoped.
- Tax computation, tax positions and representation before any tax authority.
- Remediation of periods already audited and adopted, beyond identifying the issue and its comparative effect.
Where an excluded item is needed, we identify it during the diagnostic so it can be arranged before it becomes urgent.
Frequently asked questions
No. We are not appointed under Section 139 of the Companies Act, we issue no audit opinion, and nothing we produce is assurance in the technical sense. This is preparation and advisory work carried out on the client side of the audit boundary. Your statutory auditor remains independent and reaches their own conclusions on the financial statements they report on.
Usually, because recurring audit points are almost always a process defect rather than a judgement disagreement. Unrecorded accruals, an asset register that does not tie to the ledger, missing related party confirmations and stale provisions repeat because nothing in the monthly cycle catches them. We fix the cycle and the schedule set, then confirm in the following close that the points have actually cleared.
That depends on your net worth and listing status measured against the Companies (Indian Accounting Standards) Rules, 2015, and on whether a lender, investor or overseas parent requires it regardless of the statutory position. We test applicability first and give you a written memorandum. Voluntary adoption is a real decision with real cost, and we will tell you if the trigger has not been met.
Companies maintaining books in electronic form must use software with an edit log that records every change and cannot be disabled. In practice this means checking whether the feature exists in your version, whether it is switched on, whether anyone has the right to switch it off, and whether the log is preserved. We test all four and document the position, because the auditor is required to report on it.
We prepare the draft statements in Schedule III format with the notes, schedules and disclosure working papers behind them. Approval and adoption remain with your board, and the signature stays with your directors. Where a disclosure involves a judgement, the basis is written down in the working paper rather than left as an unexplained figure in the notes.
The diagnostic needs read access to the accounting system and roughly two half-day sessions with whoever maintains the ledgers. Remediation is heavier, and how heavy depends on the backlog we find. We give you a written estimate of your team's hours before that phase starts, so the cost to you is not just our fee.
Yes, as support to your team. We respond to audit queries, prepare reconciliations the auditor asks for, and track open points to closure. We do not negotiate with your auditor on your behalf on matters of accounting judgement, and we do not represent that any treatment has been accepted until your auditor has said so.
Related services
- Virtual CFO Services where the close calendar and monthly reporting need an owner once the schedule set exists.
- Data Reconciliation Services for the bank, GST, TDS and subledger reconciliations that the schedule file depends on.
- Business Valuation Services where an accounting treatment turns on a fair value or an impairment assessment.