BASICS of GST Audit

BASICS of GST Audit

Joint auditors[1]

1. a) Sharing of work

Work should be divided among joint auditors in such a way so that burden of work shall not be on, any one auditor. Joint auditors shall perform audit collectively. Work shall be divided, based upon identifiable units.. But, if the nature of business is such that the division is not possible, then the division can be done on the basis of:

• Items of assets and liabilities
• Items of income or expenditure
• Period of time

1. b) Cooperation and synchronization among Joint auditors

Cooperation and co-ordination among joint auditors is must for the purpose of successfully completing the audit. During the period of audit, if the GST auditor comes across any matter which is relevant to the areas covered by the other auditors and deserve their attention, then the same should be communicated in writing to them. All matters shall be concluded before submission of final audit report

1. c) Relation among Joint Auditors

The joint auditor is responsible for the work allocated to him except in the following cases where the responsibility of the joint auditors is joint and several:-

• Wherein GST audit work is not specifically allotted to any one auditor but is jointly allotted to more than one auditor.
• In respect of the decisions taken by all the auditors regarding the nature, timing and extent of the audit procedures to be adopted by any of the joint auditors. However, responsibility concerning the actual execution of the audit procedures is the separate and specific responsibility of the respective joint auditor.
• In case of a dealer having several branches, the joint auditor concerned shall be responsible for the review of the branch auditor’s report concerning his area of work and not pertaining to the other joint auditor. In case, one or more branch auditor’s report is not concerning any of the joint auditor’s area of work, then for such branch auditor reports, the joint auditors may mutually decide regarding the division of work.

Note1: Each of the joint auditors will issue a final report for the consolidated GST audit report. However, where the joint auditor is in disagreement with regard to any of the matters covered in the GST audit report, each of them of should express own opinion through separate report. The joint auditor is not bound by the views of the majority of the joint auditors regarding matters to be covered in the report.

Note2: Each of the joint auditors is entitled to assume that the other joint auditors have carried out their part of the audit work. It is not necessary for the joint auditor to review the work performed by the other joint auditor.

[1] Adapted from ‘A Guide to Karnataka GST’ December 2009 Edition by Indirect Taxes Committee of Institute of Chartered Accountants of India.

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