Management Consultancy Services
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1. Financial management planning and financial policy determination
2. Capital structure planning and advice regarding raising finance.
3. Working capital management.
4. Preparing project reports and feasibility studies.
5. Preparing cash budget, cash flow statements, profitability statements, statements of source and application of funds etc.
6. Budgeting including capital budgets and revenue budgets.
7. Inventory management, material handling and storage.
8. Market research and demand studies.
9. Price fixation and other management decision making.
10. Management accounting system, cost control and value analysis.
11. Control methods and management information and reporting.
12. Personnel recruitment and selection.
13. Setting up executive incentive plans, wage incentive plans etc.
14. Management and operational audit.
15. Valuation of shares and business and advice regarding amalgamation, merger and acquisition.
16. Business policy, corporate planning, organization development, growth and diversification.
17. Organization structure and behavior, development of human resources including design and conduct of training programmes, work study, job- description, job- evaluation and evaluation of workloads.
18. System analysis and design, and computer related services including selection of hardware and development of software in all areas of services, which can otherwise be rendered by Chartered Accountant in practice and also to carry out any other professional services relating to EDP.
19. Quality Audit.
20. Environment Audit.
21. Energy Audit.
Project Finance
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A large number of Chartered Accountants in practice are involved in project financing, consultancy to their clients and liaisoning with the different financial institutions. Chartered Accountants are playing a leading role in the society and are considered as finance advisors, who assist their clients in every field relating to finance, tax, accounts and banking. Chartered Accountants, who desire to deal in such line of activity, should know all the financial institutions that provide finances
Due Diligence
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Due Diligence’ is a term that is often heard in the corporate world
these days in relation to corporate restructuring. Due Diligence can
be sub-classified into discipline-wise exercises. It may be mentioned
here that these sub- classifications should not to be seen as totally
mutually exclusive to each other. If considered mutually exclusive, it
might result in a less-than-effective evaluation of the entity. The sub-
classification of due diligence exercise could be as follows:- Commercial or Operational Due Diligence
- Financial Due Diligence
- Information systems Due Diligence
- Legal Due Diligence
- Environmental Due Diligence
- Personnel Due Diligence
Insurance Area
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MSME themselves do not have knowledge of assessing the risk relating to potential loss of profit on account of machinery breakdowns, fire, natural calamities, transit losses, workmen compensation, accidental losses and other such similar areas. CAs have wide knowledge of such risk of the probable losses and work as advisors to the MSMEs for returning insurance risk at comparative prices. CAs can play a vital role in designing the insurance products and advice for premium, rebates which fulfill the need of associate industry/ enterprise
Insurance Litigation
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The Chartered Accountants can render their professional expertise in the quantification of claims, both personal injury and business interruption claims. They may also render their services in determining the consideration of liability involving accountants’ negligence and for other professional negligence cases. They may also provide their knowledge in rendering assistance of fidelity insurance disputes and insurance accounting disputes
Risk Assessment
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In today’s volatile business environment, organizations face a wide array of complex business risks. These risks come in the form of many issues such as regulatory compliance, litigation, competitive market pressures, changing technology, investors’ demands etc. Managers and investors are concerned about whether entities have identified the full scope of these risks and evaluate whether adequate precautions are taken to mitigate these risks. In the absence of in-house expertise, CAs can ensure that identification of business risk of the entities is comprehensive and can also evaluate whether the entities have an appropriate system in place to effectively manage the risk.
Performance Measurement Services
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Performance measurement incorporating non-financial criteria such as competitive performance, resource performance, process performance and environmental performance represents a new but complementary support by CAs. Likewise, demands for risk-based measures of value and other new approaches in assurance, present a further expanding area of business support service.
Business Performance Improvement
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Corporates increasingly face more complex business issues and need to rapidly change to keep pace with today’s dynamic market. As competition grows and a larger number of industries head for a shakeout, improving business performance (efficiency and effectiveness) is a survival imperative. Meeting the rising expectations of key stakeholders in companies has led to a greater focus on ensuring better returns on investment.
Having addressed all obvious areas of improvement, companies are now increasingly looking to develop more innovative ways to improve performance on lead- time, cost, quality and service related parameters. Most management teams realize that developing and implementing improvement initiatives take up a significant amount of their time and efforts. By engaging Chartered Accountants as consultants, they are able to ensure that the initiative does not lose steam after the initial hype, as so often happens when the initiatives are taken up internally. Chartered Accountants can assist the management in providing the following services:-
- Improving customer satisfaction
- Reducing process cycle cost
- Enhancing quality of delivered
Long-term Strategic Partner
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CAs can belong term strategic partners. They can provide sound business advice to minimize business risk. The right advice from an impartial professional can be the difference between success and failure. Chartered Accountants in public practice have the skills, knowledge and experience to improve the business practices. A Chartered Accountant can be the business partner for the long haul, continuously adding values to the business.
Arbitration and Conciliation
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Among the Small and Medium Chartered Accountant Practitioners, a number of CAs have wide range of experience about social customs, Hindu laws, business practices and commercial laws and all other relevant laws and regulation, human behavior which are essential of working as arbitrator. A number of Chartered Accountants are members of Indian Council of Arbitration (ICA). An MSME can draw the services of arbitration from CAs. For the MSME, arbitration is a quick alternative dispute resolution medium at reasonable cost and time.
CAs can also take up various roles under the Arbitration and Conciliation Act, 1996 as listed below:
- Drafting of Arbitration
- Representing either of the party (plainant and defendant) to the dispute in the arbitral
- Assisting Arbitrator in drafting arbitral
- Assisting both parties to Court of
- Assisting in preparing submissions to
- Member of Arbitral
- Assisting Trade and Industry associations in setting up Alternate Dispute Redressal (ADR)
- Acting as arbitrator in Micro and Small Enterprises Facilitation Council u/s 18 of Micro, Small and Medium Enterprises Development Act,
- In some legislation, redressal of dispute or particular kind of disputes are mandatorily to be resolved through Arbitration for e.g. In Clause14 of First Schedule to the Limited Liability Partnership Act, 2008- All disputes between the partners arising out of the limited liability partnership agreement which cannot be resolved in terms of such agreement shall be referred for arbitration as per the provisions of Arbitration and Conciliation Act,1996.
- Assisting India Judiciary u/s 89 of Code of Civil Procedure 1908, where there is possibility of settling of dispute through
Information Technology Software Related Services
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CAs are now fully equipped with a certain level of expertise in information technology to establish IT System and to solve their problems. A few areas in which CAs can fruitfully serve the MSMEs are enumerated below:
1 System Development Life Cycle
- Requirement definition
- System selection
- System development and implementation
- Functional testing
- Environment system/ data migration
- Post implementation review
- Information Security
- Risk assessment
- Review of application controls
- Disaster recovery and business continuity
- Performance Measurement And Monitoring
- Emerging Standards
- E-Governance
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- Risk analysis
- Training
- Preparation of documents
- Other Areas
- Preparation of policies
- Review of IT Organization Structure
- Risk analysis
- Framing of long- term and short- term plans
- Internal control assessment
- Continuous and concurrent auditing
- External assurance
- Contractual agreements
- Selection of software tools
- Outsourcing
- Incident identification and intrusion detection system
- Disaster recovery planning
- Document retention plans
- Audit of quality check
- Audit of application controls
- Audit of emerging technologies
- Physical, logical and environment controls
- IT Budgeting
- Web trust ass
Service for Carbon Credit Mechanism
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Carbon credits are key component of national and international emissions trading schemes that have been implemented to mitigate global warming. They provide a way to reduce green-house effect emissions on the industrial scale by capping total amount emissions and letting the market assign a monetary value to any shortfall through trading. MSMEs have very little knowledge of Certified Emission Reductions (CERs). Credits are issued by Clean Development Mechanism (CDM) Executive Board for emission reduction achieved by their projects. Ministry of Environment and Forests is the nodal agency for climate change issues in India. CAs can render following services under Carbon Credit Mechanism:
- Conceptualizing the Clean Development Mechanism (CDM)
- Quantification of green house gases (GHG) Carbon
- Selection of Cleaner technologies for New
- Project risk
- Registration of project- both national and international
- Obtaining Host country
- Preparation of Project Concept
- Preparation of Project Design
- Selection of Methodologies and
- Legal and regulatory advice during negotiations with host country Designated National Authority (DNA)
- Advice on the appointment of independent
- Assistance to achieve registration of the project by the CDM Executive Board.
- Assistance in getting verification done by Designated Operational Entity (DOE).
- Ensure
- Assisting various Ministries associated with National Action Plan on Climate Change (NAPCC).
- Carbon
- Energy Audit under The Energy Conservation Act,
- Advice on investment in carbon
- Accounting advisory
- Taxation advisory services
Services Required for Environmental Laws
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Services for environmental laws are rapidly expanding, driven by various government regulations and a movement by business and industry to reduce environmental liabilities associated with their operations. Some of the opportunities are:
- Give opinion on – viability of various projects, technologies to prevent pollution and clean up polluted
- Obtain consents under the various environmental regulations and also ensure that the conditions of the consent order are complied with on a regular
- Research, identify and analyze different sources of pollution to determine their effects on the environment and find alternative ways to handle projects in an environmentally sensitive
- Obtaining Consents under the Water Pollution Act, 1974 and Air Pollution Act,
Under the provisions of these Acts, entrepreneur running or establishing any industry or process and discharging effluent/emitting pollutants into any water resources or on land/air and polluting thereby the environmental water/ air is required to obtain consent.
- Submitting Application form for obtaining No Objection Certificate (NOC) from the Pollution Control
- Environmental Clearance and Environmental Impact Assessment (EIA).
Preparation of Statutory Financial Accounts
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CAs have the competence to support MSMEs in preparation of financial statements required under any law which the MSMEs cannot do on their own because of the absence of in-house expertise with them. This is traditional work being executed since long by the CAs.
Audit of Accounts
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Various laws require audit of accounts to be done by Chartered Accountants,
e.g. under Companies Act, Income Tax Act. Some of the MSMEs in business are incorporated under the Companies Act, 1956. Such MSMEs are required to get their accounts audited under the provisions of Companies Act, 1956. Similarly, various provisions under the Income Tax Act also require audit of financial statements particularly under section 44AB of the Income Tax Act,.1961. An assessee carrying on business or profession and having total sales turnover or gross receipts exceeding the specified limit required to get his accounts audited by a Chartered Accountant .In the case of MSMEs, CAs are mostly conducting such audits. Under the Income Tax Act, a number of other sections also require audit/certification of the statements by Chartered Accountant. Some of these sections are 35D, 35E, 44AD, 80I, 80IA. Sometimes CAs are also undertaking audit under section 142(2A) of the Income Tax Act,.1961. MSMEs run by Co-operative Societies and other societies are also required to get their accounts audited.
Compliance of Tax Laws:
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Direct Taxes
- Income Tax: CAs are widely perceived to be the best equipped professionals to render all types of line and service function in the area of They can actively contribute as line managers in all areas of taxation, tax planning and tax management. The CAs are best fitted for all types of advisory and consultancy services in taxation. In fact tax planning is becoming a highly specialized service which can be the exclusive preserve of CAs. Outsourcing is the order of the day and CAs are well-placed to give this essential value-addition. The tax audit has been exclusively given to Chartered Accountants where most of the CAs are involved as stated above. There are nearly two dozen certifications to be done by CAs under the various provisions of the Income Tax Act. They can also render a useful service in verifying whether the deductions given under the provisions of Section 10A & 10B have been correctly claimed.
- Wealth Tax: Though the area of application of Wealth Tax has been considerably pruned, CAs can still render useful service in the matter of valuation of assets, assessment procedures and appeal matters relating to Wealth Tax.
- House and Property Tax: House and Property Tax is becoming an important source of revenue for state governments. There has been an enormous increase in the value of real estate and house property and this area of tax practice can be profitably handled by
- International Tax Service: The process of liberalization which is now well entrenched in Indian policies has led to surge in the entry of multinationals in Simultaneously Indian companies have established their presence in the global markets. The CAs can provide services in areas like:
- Cross border investments
- Transfer pricing
- Services for Foreign Institutional Investors
- Structuring of entities
- Double Taxation Avoidance Agreements
- E-commerce taxation
- Foreign collaboration agreements
- Offshore operations
Indirect Taxes
1. GST: As the gamut of GST expands, there would be a great need for professionals to advice and assist the The GST laws envisage registration, payment of tax, filling returns and assessments involving interface with the excise department. CAs with his training and experience is well-equipped position himself for the new role as an advisor and facilitator for due compliance for GST laws by MSMEs. CAs can offer the following services:
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- Advisory services with regard applicability of the tax, as well as procedural compliance such as registration, assessments etc.
- Review of contracts and agreements to help mitigate the overall incidents of GST.
- Conducting GST health checks in order to determine the GST implications on client operations, gauge compliance with legal provisions and suggest tax planning
2. Customs: CAs can provide advisory relating to various aspects of customs law and applicable regulations, covering rates of duties, exemption, valuation planning, classification assistance and Some other areas where CAS can render services include inter alia:
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- Rendering advice and wide range of custom procedures and documentation requirements, including those relating to import and export of goods, clearance of imports, warehousing, duty entitlements, to name a
- Assisting clients on the policies and procedures set down under the Export-Import Policy, such as licensing
- Providing the right guidance to enable the clients to make the most of ways in which benefits are available to specific entities/projects or to units in specified areas, as well as confections available under various export promotion
3 Anti-Dumping Duties: CAs can render services like analysis of the existing anti-dumping proceedings, preparation and filling of complaint with the Directorate General of Anti-Dumping (DGAD), and compliance procedures relating to these proceedings
(iv) Labour Laws
(i) Contract Labour (Regulation & Abolition) Act,1970 and Rules
Objective & Applicability Compliance requirements This Act regulates the employment of Contract Labour in certain establishments and provides for its abolition in certain circumstances. It applies to every establishment or contractor wherein 20 or more workmen are or were employed on any day of the preceding 12 months as
contract labour.- Working conditions of workmen
- Adequate facilities like drinking. water, canteen etc. for workmen.
- Adequate facilities for women workers also.
- Maintenance of registers as required under the Act.
- Submission of returns.
(ii) Employee State Insurance Act, 1948
Objective & Applicability Compliance requirements This Act provides for the provision of benefits to employees in case of sickness, maternity and employment injury. All employees including casual, temporary or contract employees drawing wages less than Rs.6500 per month are
covered. .- Remittance of contribution every month.
- Maintenance of registers.
- Submission of returns as per provisions of the Act.
(iii) Employee’s Provident Fund and Miscellaneous Provisions Act, 1952
Objective & Applicability Compliance requirements The PF Act provides for the compulsory institution of contributory provident funds, pension funds and deposit- linked insurance funds for employee. This Act applies to industries specified in Schedule I employing 20 or more persons and any other class of establishment with 20 or more persons notified by the
Government.- Payment of contribution every month.
- Maintenance of registers.
- Submission of returns as per provisions of the Act.
(iv) Payment of Bonus Act, 1965
Objective & Applicability Compliance requirements The object of the Payment of Bonus Act is to provide for the payment of bonus (linked with profit or productivity) to persons employed in certain establishment and matters connected therewith. This Act is applicable to every factory and to every establishment wherein
20 or more workers are employed on any day during an
accounting year.-
- Payment of bonus in accordance with the provisions of the Act.
Submission of returns.
(v) Payment of Gratuity Act, 1972
Objective & Applicability Compliance requirements The Act provides for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantation, ports, railway companies, shops, or other establishment.
The Act enforces the payment of ‘gratuity’, a reward for long service, as a statutory retiral benefit. Every employee irrespective of his wages is entitled to receive gratuity if he rendered continuous service of
5 years or more than 5 years.- Payment of gratuity to employees leaving establishment after completion of 5 years.
- Notice of opening to concerned labour authority.
- Display required under the Act.
- Maintenance of registers of allocable surplus, bonus, etc.
- Submission of annual returns.
(vi)Payment of Wages Act, 1936
Objective & Applicability Compliance requirements The Act ensures payment of wages in a particular form at regular intervals without unauthorized deductions.
It is applicable to any factory, any railway establishment and any industrial or
other establishment like tramway service, motor transport service, air, oilfield, plantation, workshop, or
other establishment
producing, adapting or manufacturing any article, establishment engaged in construction, development and maintenance of buildings, roads, bridges or canals, navigation, irrigation or water supply,
transmission, generation and distribution of electricity/ power and any other establishment notified by
the Central or a State Government- Payment of wages without any unauthorized deductions
- Maintenance of registers of fines, deductions, advance, wages etc
- Displays as per the provisions of the Act.
- Submission of annual returns.
(vii) Workmen’s Compensation Act, 1923
Objective & Applicability Compliance requirements The Act aims to
provide workmen and their dependents, compensatory payment, in case of accidents arising out of and in course of the
employment and causing either death or disablement of workmen. The Act applies to factories, mines, docks, construction establishment,
oilfield, plantation
and other establishment listed in Schedule II & III of the Act but excludes
establishments covered by the ESI Act.- Provision of compensation in case of accident
- Submission of returns as stipulated under the Act.
- (v) The Foreign Contribution (Regulation) Act, 2010
Regulates receipt and spending of foreign funds. Ministry of Home Affairs handles registration under the Act.
Any person having a definite cultural, economic, educational, religious or social programme shall accept foreign contribution only after obtaining a certificate of registration under section 11 (1) of The Foreign Contribution (Regulation) Act, 2010.
Persons other than above can accept any foreign contribution only after obtaining the prior permission of the Central Government under section 11(2) of The Foreign Contribution (Regulation) Act, 2010.
