Financial documents and financial statements have different meanings. Financial documents are proof, and these evidence-based records are used for decision making. The financial position of the company is conveyed with financial statements. The documents attested by chartered accountants have eighteen digits unique numbers. UDIN is created for document verification. It is the unique number that improves authenticity and curbs malpractices. The authorities who have the right to view UDIN details are the member, regulator, and stakeholder. It is confidential information.
In the chartered accountancy profession, several cases are arising with forged duplicate signatures. UDIN concept came into practice in the year 2019. The number format conveys the year, month and alpha-numeric features. The capital contribution or net worth certificate, working capital certificate, turnover certificate, certification of fair values, foreign remittance certificate, a certificate under section 92 of the income tax act, 1961, certificates for funds, certification for GST Act, the certificate used for KYC, certificate to show the source of income, certificate to RERA, and others are the certificates that have UDIN details.
Auditor report, review report, valuation reports, information system audit, limited review report, forensic audit, stock audit, borrower monitoring assignments, internal audit, and other reports come under certificates without UDIN number. The original copies are published online. So, no need for a UDIN number. This blog engages the readers with worthy information about UDIN numbers such as registration, time limit, cancellation, bulk generation, GST filling, and bank audits.
With effect from February 2022, the firm registration number is mandatory for generating UDIN. The purpose of this is to know the number of UDIN generated by the firm for its clients. If the chartered accountant is not working for firms, he can mention the individual capacity. The income tax forms in the e-filling portal must have UDIN from April 2022.
After generating the UDIN for a document, one cannot change it. If the professional wants to change or cancel the UDIN, the option of ‘revoke’ explains the revocation. The UDIN will appear in the portal even after cancellation with a status of “revoke”. The login page has the details of the revoke/cancel process. It also asks for the reason behind the cancellation.
After signing the certificates and documents, the UDIN generation has a time frame of 15 days to 60 days. The details of UDIN has to be disclosed to the management or the personnel taking care of corporate governance. Auditors wanted to have uniformity with the standard on quality control and standards on auditing. By getting the UDIN number for the documents, the professionals feel secure.
Bulk UDIN generation:
The members can apply for bulk UDIN generation with the help of an excel file with the required details. The maximum limit for bulk UDIN generation is 300 numbers.
UDIN for GST:
UDIN is essential for online and offline transactions. If the online portal does not have the space for filling UDIN, it has to be generated and kept for the future. Stakeholders ask UDIN after the transition. There is an illustrative list with different sections of the IT Act 1961 that has to be selected in tax audits. If the document does not fall into the illustrative list, it mentions in the document description. For section 44AB the mandatory details are turnover, net profit, fixed asset, assessment year, and firm registration number. The fields for other sections are assessment year, firm registration and figure or value. One UDIN is enough for the annexures of the document. UDIN is essential for management services and audit services. Review services attest audit, and assurance requires UDIN from 2019.
UDIN for bank audits:
The tax audit and bank audit require separate UDIN numbers. By using the add more button, multiple reports are added. If the reports have different dates, different UDINs are generated. Auditors can use the different figures or keywords for generating UDIN. Statutory branch auditors and central auditors are also supposed to generate UDIN.
Non-generation of UDIN:
Non-generation of UDIN is termed misconduct with a part I, Part II and Part III of the first schedule. And second, schedule with Part I and Part II.
Importance of UDIN:
• Transparency and digital reference are possible because of the introduction of the UDIN system.
• Entities that deal with important documents like firms, banks and individuals check the geniuses with the UDIN verification.
• UDIN is the one time proof for the documents. Users need to maintain the number and changes with the document carefully.
• No backdating of the document curb the forgery.
• Documents are viewed by the regulator, member, and stakeholder. The UDIN protects the security and maintenance of the document.
• It improves the reliability of the document.
• Chartered accountants working in industries do not certify the document. Hence, the UDIN is only for chartered accountants with independent practice.
• Different types of regulators such as SEBI, RBI, CBIC, CBDT, MCA, IBA, and RERA ask for the verification of the UDIN number.
• UDIN is not for true copies. It is applicable only for the attested copies produced by a chartered accountant. It helps for understanding the original, and attested copy.
• The consumed and unconsumed status explain the acceptance and rejection of the UDIN by the taxpayer.
• UDIN becomes invalid if the parameters such as AY/FY, UDIN, and MRN are a mismatch.
• UDIN for stock audit is as per the location. UDIN is location-based and date based.
• As the government is requesting faceless IT assessments, there are chances for revenue leakages. The evidence-based proof help for reducing the problems.
ICAI believes that the UDIN system minimizes the error. The system corrects the clerical mistakes with the document. UDIN process solves the complex problems of chartered accountants.