During the lockdown period, CA students take up online classes, yet the truth deserted is that there is a considerable drop in the article ship training. With the guidelines to complete the shortfall of training, ICAI instructs the students to appear in the same attempt in which they have intended to show up. Depending upon the facilities available in the residence of the student, the lockdown period is treated as a leave or service period. If the articled assistants work from home, then it is the service period. Problems like the residence of the trainee located in the containment zone, the location of the office located in the containment zone, and there is no transport in the principal office becomes the barrier for taking the training. Then it is considered a leave period for the students. The stipend given to the student differs as per the quantity of work. During the lockdown period, it is mutual understanding between the principal and student. Let me sketch some valuable points regarding the importance of Articled training.
Exposure of audit during CA article ship
CA practical training gives the experience of an exciting audit to the CA student. An audit is of different types like statutory audit, internal audit, concurrent audits, forensic audits, and tax audits. As a professional auditor, a chartered accountant is a factotum, with knowledge about all the departments. Let me take a tour to see the different types of audits.
In the case of a statutory audit, the work is related to document preparation and report preparation. Statute means a set of law that is to enact the business. The audit party states the requirement of the records for the examination before performing the audit. State government or federal government spends the revenue of the taxpayer. The spending is as per the associated law. Annual statutory audit in government departments is to check about spend on the government. If foreign companies are doing business in India, then they need to follow the prevailing laws in India. These types of laws would be audited with the statutory audit.
‘SOX’ is the law that came into existence in the year 2002. It is for checking the standards of the US-based public companies. From the year 2005, India took some provisions from SOX. Some of the provisions from SOX followed in India in the financial reporting process are listed below:
- Fifty percent of executive chairman constitute independent directors.
- The internal controls should be monitored by the CEO or CFO’s, CEO’s.
- CFOs check and certify the statements of the company,
- The quarterly reports of the listed companies must be submitted to the stock exchanges.
- Director’s and auditor’s reports need to be attached.
- Establish the Audit committee establishment and do revisions of responsibilities of the audit committee.
- Maintain the Code of conduct for management and board of directors.
- Maintain the transparency of the financial statement.
Internal audit is to analyze the risk management, supply chain management, and cybersecurity measures. Internal audit is to gather an understanding of the issues of a particular department, report about the department, and recommend to the board of directors about the changes. The internal audit report consists of an interim report and an annual report. A quarterly interim report is to communicate the suggestions of the auditor to the management.
Concurrent audit is conducted in the banks to cover all the transactions related to the bank. It will be parallel when processing the transaction. It is to ensure accuracy in the different banking functions like acceptance of deposits, advances, loans, safety lockers, cash management, bill payment, and forex. Regularly, the checkpoints of the audit were monitored by the audit department.
A forensic audit shall be to find the reasons for the fraud, and it is not for the recommendations to improve the performance. In cases like interest conflicts, extortion, and bribery the forensic audit brings out the reasons.
Tax Audit is to check the income tax payments and documents related to tax. Detailed records maintenance is the best way to minimize the risk arising out of tax payments. If the receipts of the business exceed the amount of one crore, then it is mandatory to do a tax audit. In the tax audit, financial details of the business like the sales and revue worked out by the auditor.
Article ship training is the period when the student gets insight into the CA practical training tasks. The work pressure is on the high side during March and September that is the pinnacle season for the finance department. The marks secured by the student and the training from the big firms are interconnected. In this way, getting more marks is the criteria to join the practical training offered by big companies. Article ship is the time when the student transforms the knowledge into a practical way of knowledge. But articled training is only to clear the doubts, and it has nothing to do with the future of the student. In small firms, there is an opportunity to learn every small task. Moreover, the work pressure is also less in small firms that help the students to attend the coaching regularly. It is good to bear in the mind that the article ship is not the way to a job. Knowledge and skill both work as a ladder to success for CA students.