CA CMA Syam sundar

  The Biggest Control Weakness in Every Company It’s not weak systems. It’s not poor segregation of duties. It’s not careless employees. 👉 It’s the CEO. Here’s the truth nobody dares to write in an audit report: Controls only work if leadership chooses to respect them. ⚠️ Procurement rules vanish with a CEO override. ⚠️ HR policies bend when “star performers” are involved. ⚠️ Financial discipline collapses when the boss says: “Just book it.” And yet—most audits, risk reports, even board papers never say it. Why? Because calling out the CEO feels like career suicide. But history doesn’t lie: ➡️ Enron. ➡️ Satyam. ➡️ Wirecard. None collapsed because a “reconciliation failed.” They collapsed because CEOs overrode every control. The paperwork looked fine. The culture was rotten. So here’s the uncomfortable governance question: 👉 If the CEO is the ultimate control weakness, who is holding them accountable? Audit Committees? Too soft. Boards? Too close. Risk Teams? Too d...

  E-Invoicing at a Glance 1) To Whom It Is Applicable: E-invoicing is applicable to registered persons whose aggregate turnover exceeds a specified threshold in any financial year from FY 2017–18 onwards. Thresholds for Applicability: Turnover Limit Effective Date ₹500 Cr 1st Oct 2020 ₹100 Cr 1st Jan 2021 ₹50 Cr 1st April 2021 ₹20 Cr 1st April 2022 ₹10 Cr 1st Oct 2022 ₹5 Cr 1st Aug 2023 2) Entities/Persons Exempted from E-Invoicing: Regardless of turnover, the following entities are exempt from e-invoicing: SEZ units (not developers) Insurer, Banks, financial institutions, and NBFCs Goods Transport Agencies (GTAs) Passenger transportation services Cinematograph film exhibition in multiplexes Government departments and local authorities 3) Documents Covered Under E-Invoicing: The following documents require e-invoicing: Tax Invoices Debit Notes Credit Notes Related to B2B...

  The financial statements told one story… but the processes told another. During an audit, everything balanced perfectly — revenue matched invoices, expenses reconciled, and the trial balance tied up. But one critical gap stood out: all vendor payments were processed by a single individual without independent review. The numbers looked fine, but the risk of fraud or error was very significant and real. This experience reminded that internal controls are the backbone of trustworthy financial reporting. They don’t just protect balances — they protect the business itself. 💡 Here’s what effective controls should look like: ✔ Preventive controls → segregation of duties, approval hierarchies, access restrictions. ✔ Detective controls → reconciliations, independent reviews, exception reports. ✔ Corrective controls → escalation procedures, timely adjustments, audit trails. For auditors, evaluating controls isn’t a checklist exercise. It’s about: ❗ Testing if approvals are real or j...

  What is Blocked ITC? Blocked ITC means input tax credit which cannot be claimed, even if GST has been paid on such goods or services. Section 17(5) of CGST Act, 2017 lists these cases. ⸻ 🔸 Main Cases of Blocked ITC (Section 17(5)) 1. Motor vehicles & conveyances • ITC not allowed on motor vehicles for transportation of persons (seating capacity ≤ 13), except when used for: • Further supply of such vehicles (car dealers) • Transport of passengers (cab, bus operators) • Training on driving such vehicles • For vessels & aircraft, ITC blocked except when used for: • Transport of goods or passengers • Further supply (sale/lease) • Training 2. Food & beverages, outdoor catering, beauty treatment, health services, club membership, travel benefits to employees • ITC blocked, unless: • The inward supply is used to make outward taxable supply of the same category (e.g., catering company). • It is obligatory for employer under law to provide (e.g., canteen under...

 ORDER TO CASH (O2C) CYCLE – COMPLETE EXPLANATION The Order to Cash (O2C) cycle is an end-to-end process that starts when a customer places an order and ends when the company receives payment and records it in accounts. It directly impacts revenue, cash flow, and customer satisfaction. 🔹 Steps in O2C Cycle: 1. ORDER MANAGEMENT - Customer places order for goods/services. - Order details recorded: product, quantity, price, delivery date, customer data. 2. CREDIT MANAGEMENT - Customer’s credit history checked before approval. - Reduces risk of bad debts. 3. ORDER PROCESSING / FULFILMENT - Approved order is picked, packed, and shipped from warehouse. - For services, schedule and delivery is confirmed. 4. SHIPPING & LOGISTICS - Goods dispatched with delivery note and tracking details. - Proof of delivery recorded. 5. BILLING / INVOICING - Invoice sent to customer with product, price, taxes, due date, payment terms. - Accuracy in invoicing avoids disputes. 6. ACCOUNTS RECEIVABLE (AR...

 Post-Sale Discounts & Credit Notes under GST – A Compliance Reminder Recently, there have been instances where the GST Department has disallowed credit notes issued for post-sale discounts – despite the clarifications given in Circular No. 178/10/2022-GST dated 03.08.2022. 👉 The common ground for such disallowance: The Credit Notes did not contain reference to the original invoice against which they were issued. As per Section 15(3)(b) of the CGST Act, 2017, post-sale discounts are permissible deductions only when they can be linked to the relevant supply/invoice. Further, Rule 53(1A)(g) of the CGST Rules, 2017 mandates that a credit note must contain the "number and date of the corresponding tax invoice(s)". ⚠️ Risk: If this linkage is missing, the Department may argue that the credit note is not valid for GST purposes, leading to denial of tax adjustment.