CORAA
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Resources · 136 questions, one page

Top 136 Indian Audit Q&A.

A single-page Q&A reference covering the 10 areas an Indian Chartered Accountant touches most often — Standards on Auditing, CARO 2020, Companies Act 2013, Income Tax Act, GST, Ind AS / AS, audit reporting, quality management, ESG / BRSR, and technology / AI in audit. Each answer is cited and cross-linked to the underlying CORAA page (calculator, SA, CARO clause, or deeper resource).

Categories

Section 1 · 40 Q&A
Standards on Auditing (SA 200 — SA 720)
Section 2 · 23 Q&A
CARO 2020 (21 clauses)
Section 3 · 14 Q&A
Companies Act 2013
Section 4 · 13 Q&A
Income Tax Act
Section 5 · 8 Q&A
GST (Goods and Services Tax)
Section 6 · 10 Q&A
Ind AS / AS Framework
Section 7 · 10 Q&A
Quality Management + Practice
Section 8 · 8 Q&A
Audit firm operations
Section 9 · 5 Q&A
ESG + BRSR + sustainability assurance
Section 10 · 5 Q&A
Technology + AI in audit
Section 1 of 10 · 40 Q&A

Standards on Auditing (SA 200 — SA 720)

The ICAI Standards on Auditing issued by the Auditing and Assurance Standards Board, deemed prescribed under Section 143(10) of the Companies Act 2013.

Q1.1What is SA 200 and why does it matter?+
SA 200 sets the overall objectives of the independent auditor and the conduct of an audit in accordance with the SAs. It establishes professional skepticism, professional judgement, ethical requirements, and the audit risk model as foundational concepts.
Q1.2What is professional skepticism under SA 200?+
An attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to fraud or error, and a critical assessment of audit evidence. Required throughout the audit.
Q1.3What must the engagement letter cover under SA 210?+
Objective and scope of audit, responsibilities of auditor, responsibilities of management, identification of applicable financial reporting framework, expected form and content of reports, agreed fee or basis of fee.
Q1.4What is SA 230 documentation requirement?+
Audit documentation must be sufficient to enable an experienced auditor with no previous connection with the audit to understand the nature, timing, extent of procedures performed, results, evidence obtained, and significant matters arising. Final file assembly within 60 days of audit report date.
Q1.5What is the SA 240 presumption regarding revenue?+
SA 240 para 26 — Revenue recognition is presumed to be a fraud risk in every audit. The auditor must specifically design audit responses to address this risk, even if the conclusion is that the presumption is rebutted in the circumstances.
Q1.6How many journal entries should I test under SA 240?+
SA 240 para 33 requires testing journal entries throughout the period (not just year-end) using risk-based criteria — unusual accounts, period-end timing, unusual users, round amounts, no support documentation. Tools like CORAA test all journal entries automatically rather than sampling.
Q1.7What does SA 250 require regarding laws and regulations?+
The auditor must obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the FS, and perform specified audit procedures for other laws and regulations that may have a material indirect effect.
Q1.8When must I communicate with TCWG under SA 260?+
Significant findings from the audit, including audit approach, control deficiencies, uncorrected misstatements, modification of opinion, going concern issues, and difficulties encountered. Communication must be timely and adequately documented.
Q1.9What is the SA 265 reporting threshold?+
Significant deficiencies in internal control identified during the audit must be communicated in writing to TCWG on a timely basis. "Significant" means a deficiency or combination of deficiencies that, in the auditor's professional judgement, is of sufficient importance to merit attention.
Q1.10What is the difference between audit strategy and audit plan (SA 300)?+
Audit strategy is the overall approach — scope, timing, direction. Audit plan is more detailed — specific procedures, sample sizes, staff allocation. Strategy informs the plan; plan implements the strategy.
Q1.11What is SA 315 (Revised 2020)?+
The risk-assessment standard. Requires the auditor to identify and assess risks of material misstatement at the FS and assertion level. The 2020 revision strengthened the IT environment and ITGC understanding requirements, and the concept of "significant risks".
Q1.12What are "significant risks" under SA 315?+
Risks that, in the auditor's judgement, require special audit consideration. Examples — risk of fraud, complex non-routine transactions, related-party transactions, subjective estimates with high estimation uncertainty. Significant risks require specific substantive procedures.
Q1.13What is SA 320 materiality?+
The threshold above which misstatements (individually or in aggregate) could reasonably be expected to influence the economic decisions of users. Set at planning, revised during audit if circumstances change, and used to evaluate the effects of identified misstatements.
Q1.14What is the typical PBT-based materiality benchmark?+
For profitable companies, 5% of profit before tax is the most-cited anchor in ICAI implementation guidance. Some firms use 5-10% range for stable unlisted profitable companies. For listed, 5% is the conservative norm.
Q1.15What is performance materiality?+
A lower amount than overall materiality, set to reduce the probability that the aggregate of undetected and uncorrected misstatements exceeds overall materiality. Typical range — 60-75% of overall materiality.
Q1.16What is the SA 330 link to risk assessment?+
SA 330 — the auditor designs and performs further audit procedures whose nature, timing, and extent are based on, and responsive to, the assessed risks of material misstatement identified under SA 315. Significant risks require substantive procedures specifically responsive.
Q1.17What is SA 402 about?+
Audit considerations when the entity uses a service organisation (e.g., payroll processor, cloud hosting). The auditor obtains understanding of services provided, considers controls at the service organisation, and may rely on a SOC 1 / Type 2 report (SAE 3402).
Q1.18What is the difference between SA 450 evaluation of misstatements and SA 320 materiality?+
SA 320 sets the threshold; SA 450 evaluates whether identified misstatements (individually or in aggregate) exceed it. SA 450 also requires consideration of qualitative factors — even individually-small misstatements may be material in context.
Q1.19How does SA 500 define "audit evidence"?+
Information used by the auditor in arriving at the conclusions on which the audit opinion is based. Includes information from accounting records and other sources. Must be sufficient (quantity) and appropriate (quality — relevance + reliability).
Q1.20What is the SA 501 inventory verification rule?+
When inventory is material, the auditor must attend physical inventory counting unless impracticable, observe management's counting procedures, inspect inventory, and perform test counts. For inventory under custody of third party — obtain confirmation directly from the third party.
Q1.21What is the SA 505 external confirmation hierarchy?+
Positive confirmation > negative confirmation > inferred response. Positive — confirming party explicitly confirms or disputes. Negative — only responds if disagrees (weaker evidence). Used for bank balances, debtors, creditors, legal counsel.
Q1.22What is the SA 510 opening balance requirement?+
For a first-year audit (or where the prior auditor was unable to perform sufficient procedures), the auditor must obtain sufficient appropriate audit evidence about whether opening balances contain misstatements that affect current FS, and whether accounting policies have been consistently applied.
Q1.23What is the SA 520 analytical procedure requirement?+
Analytical procedures are required at the planning stage (preliminary AP under SA 315), as substantive AP for some assertions (SA 520), and at the overall review stage near audit completion. Useful for identifying unusual fluctuations and assessing reasonableness.
Q1.24How does SA 530 sampling work?+
Apply audit procedures to less than 100% of items in a population so that all sampling units have a chance of selection. Statistical (MUS, classical variables) or non-statistical sampling. Sample size depends on confidence level, tolerable misstatement, expected misstatement.
Q1.25What is SA 540 about?+
Auditing accounting estimates and related disclosures, including fair value measurements. Requires the auditor to obtain understanding of how management makes estimates, evaluate inherent risk, and test the reasonableness of management's estimate (or develop an independent point estimate / range).
Q1.26How are related party transactions audited (SA 550)?+
Identify related parties, evaluate the entity's controls over identification and disclosure, perform procedures responsive to the assessed risk, and test that RPTs are disclosed in accordance with the FRF. Common audit failing — accepting management assertions on arm's-length pricing without independent test.
Q1.27What does SA 560 cover?+
Subsequent events — events occurring between the date of the FS and the date of the auditor's report, and facts that become known to the auditor after the date of the auditor's report. Adjusting events (conditions existed at BS date) and non-adjusting events handled differently.
Q1.28What does SA 570 require for going concern?+
Evaluate management's assessment for at least 12 months from the date of the FS. Identify events / conditions that may cast significant doubt. If material uncertainty exists, include a separate "Material Uncertainty Related to Going Concern" section in the audit report.
Q1.29When is a written representation under SA 580 dated?+
Same date as the audit report (or as close to it as practicable). Covers period audited and material that requires representation per other SAs. Failure to obtain WR is a scope limitation.
Q1.30When does SA 600 apply?+
Audit of group / consolidated FS where component auditors audit individual subsidiaries. The principal auditor uses component auditor work, but takes responsibility for the overall opinion. Component auditor instructions documented; review of component work scaled to component risk.
Q1.31What is the SA 610 link to internal audit?+
Auditor may use the work of the internal audit function (or internal audit team direct assistance) if evaluation confirms competence, objectivity and systematic approach. Cannot fully replace external audit — only used to obtain evidence.
Q1.32When do I engage an auditor's expert under SA 620?+
When the audit team lacks the expertise needed in a specialised area (e.g., actuarial for gratuity / pension; engineering for asset valuation; legal for contract interpretation; IT security for digital assets). Expert's competence, objectivity and work scope documented.
Q1.33What is the difference between an unmodified and unqualified opinion (SA 700)?+
Same thing — "unmodified" is the SA 700 (Revised) terminology; "unqualified" is the older / colloquial terminology. Both mean "clean" opinion — FS give a true and fair view in all material respects per the applicable framework.
Q1.34What is a Key Audit Matter under SA 701?+
Matters that, in the auditor's judgement, were of most significance in the audit of the FS of the current period. Selected from matters communicated to TCWG. Mandatory for listed entities; described in the auditor's report with reasons and audit approach.
Q1.35When is a qualified opinion issued (SA 705)?+
When (a) misstatements individually or in aggregate are material but NOT pervasive to the FS; OR (b) the auditor is unable to obtain sufficient appropriate evidence on which to base the opinion, but the possible effects of undetected misstatements could be material but not pervasive.
Q1.36When is an adverse opinion issued?+
When misstatements, individually or in aggregate, are both material AND pervasive to the FS. Pervasive = not confined to specific elements / accounts; could substantially impair the FS as a whole.
Q1.37When is a disclaimer of opinion issued?+
When the auditor is unable to obtain sufficient appropriate audit evidence AND the possible effects of undetected misstatements could be material AND pervasive. The auditor cannot form an opinion.
Q1.38What is the difference between EOM and Other Matter paragraph (SA 706)?+
EOM (Emphasis of Matter) — refers to a matter appropriately presented in the FS that, in the auditor's judgement, is of such importance that it is fundamental to users' understanding. Other Matter — refers to a matter other than those presented in the FS that, in the auditor's judgement, is relevant to users' understanding of the audit.
Q1.39What is SA 720 about?+
Auditor's responsibilities relating to other information included in the entity's annual report that contains the audited FS — typically the Director's Report and MD&A. The auditor reads the other information and considers whether there is a material inconsistency or misstatement.
Q1.40How can AI help with SA compliance?+
AI assistants like CORAA operationalise SAs as code — SA 230 documentation as immutable audit trail, SA 240 JE testing on full population (not sample), SA 320 materiality with the locked memo, SA 530 sampling with formula + seed printed per working paper, SA 700 with UDIN-gated sign-off.
Section 2 of 10 · 23 Q&A

CARO 2020 (21 clauses)

The Companies (Auditor's Report) Order 2020 — 21 reporting clauses in the annexure to the audit report. Effective FY 2021-22 onwards.

Q2.1When does CARO 2020 apply?+
For periods commencing on or after 1 April 2021 (FY 2021-22 onwards). Applies to every audit report on standalone FS of companies covered by Section 143 of the Companies Act 2013, with specific exemptions for banking / insurance / Section 8 / OPC / small companies / certain small private companies.
Q2.2What is the CARO 2020 small private company exemption?+
Private company that is not a holding / subsidiary of a public company AND meets ALL three thresholds — paid-up + reserves ≤ ₹1 cr, total revenue ≤ ₹10 cr, borrowings ≤ ₹1 cr at any point during the year. All four conditions must be met cumulatively.
Q2.3What is CARO clause (i) about?+
Property, Plant and Equipment + Intangible Assets — proper records, physical verification, title deeds in name of company, revaluation, Benami property proceedings.
Q2.4How is CARO clause (ii) on inventory tested?+
Physical verification of inventory conducted at reasonable intervals and material discrepancies (10% or more in aggregate) dealt with in the books. For working-capital loans ≥ ₹5 cr from banks/FIs, quarterly returns/statements filed with the bank reconciled with books.
Q2.5What does CARO clause (iii) require on loans given?+
Whether the company has granted loans / advances / guarantees / security; terms whether prejudicial to interest; schedule of repayment stipulated; receipts regular; overdues > 90 days; renewal / extension of overdue loans.
Q2.6What is CARO clause (iv) about?+
Compliance with Sections 185 and 186 of the Companies Act 2013 in respect of loans, investments, guarantees and securities. Particularly: Section 185 prohibition on loans to directors, Section 186 inter-corporate loan ceiling.
Q2.7What does CARO clause (v) on deposits cover?+
Compliance with directives of RBI, provisions of Sections 73-76 of Companies Act 2013, and Companies (Acceptance of Deposits) Rules 2014 — for deposits accepted by the company.
Q2.8How is CARO clause (vi) on cost records tested?+
Whether maintenance of cost records has been specified by the Central Government under Section 148(1) — and if so, whether such accounts and records have been made and maintained.
Q2.9What does CARO clause (vii) cover?+
Statutory dues — (a) regularity of payment of GST, PF, ESI, income tax, sales tax, customs duty, excise duty, cess and other statutory dues; (b) details of disputed statutory dues not deposited, with forum where dispute is pending.
Q2.10What is CARO clause (viii) about?+
Surrender / disclosure of unrecorded transactions as income in tax assessments during the year — and whether properly recorded in books.
Q2.11How does CARO clause (ix) cover loan defaults?+
Whether the company has defaulted in repayment of loans / borrowings or interest to any lender — period + amount of default. Whether declared wilful defaulter by any bank / FI / lender. Compliance with end-use specified in term loan agreements.
Q2.12What does CARO clause (x) require on IPO funds?+
Moneys raised by way of IPO / further public offer (including debt) — application for the purposes raised. Preferential allotment / private placement of shares / FCDs — compliance with Section 42 / 62 and end-use.
Q2.13What is CARO clause (xi) about fraud reporting?+
(a) Fraud noticed or reported during the year — nature and amount; (b) whether Form ADT-4 filed with Central Government by auditor under Section 143(12); (c) consideration of whistleblower complaints by auditor.
Q2.14What is CARO clause (xii) about Nidhi?+
For Nidhi Companies — compliance with Net Owned Funds to Deposits ratio of 1:20; whether maintaining 10% unencumbered term deposits; whether there is overdue deposit. Applicable only to Nidhi Companies.
Q2.15What does CARO clause (xiii) cover on RPTs?+
Whether all related-party transactions are in compliance with Sections 177 and 188 — and whether disclosed in FS as required by applicable accounting standards.
Q2.16What is CARO clause (xiv) about?+
Whether the company has an internal audit system commensurate with the size and nature of its business — and whether reports of the internal auditor have been considered in conducting the audit.
Q2.17What does CARO clause (xv) cover?+
Non-cash transactions with directors or persons connected with them under Section 192 — and compliance therewith.
Q2.18What is CARO clause (xvi) about NBFC?+
Whether required to register under Section 45-IA of RBI Act 1934 — if yes, whether registration obtained. CIC status. Whether continued to undertake principal business activity. Group structure with multiple CICs.
Q2.19What does CARO clause (xvii) require on cash losses?+
Cash losses in the FY and immediately preceding FY — amounts. Note "cash loss" = loss as per FS after adjusting for non-cash expense (depreciation, amortisation, fair-value changes).
Q2.20What is CARO clause (xviii) about?+
Resignation of statutory auditors during the year — and whether the incoming auditor has taken into account the issues raised by the outgoing auditor.
Q2.21What does CARO clause (xix) require on going concern?+
On the basis of financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying FS, and knowledge of board meetings / management plans — whether the auditor is of the opinion that no material uncertainty exists as on the audit report date that the company is capable of meeting its liabilities existing at BS date as and when they fall due within one year.
Q2.22What is CARO clause (xx) on CSR?+
(a) Unspent CSR amounts not transferred to a Schedule VII fund within 6 months of FY end; (b) unspent CSR for ongoing projects not transferred to a special account within 30 days of FY end.
Q2.23What is CARO clause (xxi)?+
For audit reports on consolidated FS only — whether there are any qualifications / adverse remarks by the respective auditors in the CARO reports of the companies included in the consolidated FS.
Section 3 of 10 · 14 Q&A

Companies Act 2013

Key sections an auditor encounters — Section 139 (appointment / rotation), Section 143 (powers / duties), Section 188 (RPT), Section 197 (remuneration), CARO 2020.

Q3.1Who must rotate auditors under Section 139(2)?+
All listed companies; unlisted public companies with paid-up capital ≥ ₹10 cr; private limited companies with paid-up capital ≥ ₹20 cr; any company (other than listed / OPC / small) with public borrowings ≥ ₹50 cr.
Q3.2What is the audit firm rotation cap under Section 139(2)?+
2 terms of 5 consecutive years (10 years total). 5-year cooling-off after. Common-partner test for any re-appointment.
Q3.3Who is the principal auditor in a group audit?+
The auditor of the parent / holding company that prepares consolidated FS. Acts as principal auditor for the CFS; uses work of component auditors under SA 600 / SA 600 (Revised) for subsidiaries.
Q3.4What does Section 143(12) require?+
Auditor must report suspected fraud above ₹1 crore to Central Government via Form ADT-4 within 60 days. Below ₹1 crore — report to Audit Committee / Board within 2 days; disclosure in Board's Report under Sec 134(3)(ca).
Q3.5What is the Section 144 prohibition on auditor services?+
Statutory auditor cannot provide to the same client: (a) accounting / bookkeeping; (b) internal audit; (c) design / implementation of financial information system; (d) actuarial services; (e) investment advisory; (f) investment banking; (g) outsourced financial services; (h) management services.
Q3.6What are the four categories under Section 188?+
7 categories actually — sale / purchase of goods, sale / purchase of property, leasing, services, agent appointment, office or place of profit, underwriting of securities.
Q3.7What is the Section 186 inter-corporate ceiling?+
Higher of 60% of (paid-up + free reserves + securities premium) OR 100% of (free reserves + securities premium). Exceeded → special resolution required.
Q3.8What is the Section 197 managerial remuneration cap?+
Total managerial remuneration cannot exceed 11% of net profit (Sec 198). Within this — 5% for single MD/WTD/Manager, 10% for multiple MD/WTD, 1% for non-executive (3% if no MD/WTD).
Q3.9How is "net profit" computed under Section 198?+
Accounting profit adjusted for items like profit on capital nature transactions, premium on issue, profit on revaluation, depreciation per Companies Act not Income Tax. The Schedule III "profit before tax" is NOT Section 198 net profit.
Q3.10When does Section 135 CSR apply?+
Any year where the company meets ANY of: net worth ≥ ₹500 cr OR turnover ≥ ₹1,000 cr OR net profit ≥ ₹5 cr in the immediately preceding FY.
Q3.11What is the CSR spend obligation?+
2% of average net profit (Sec 198) of the immediately preceding 3 FYs.
Q3.12What is the unspent CSR rule?+
Unspent CSR allocated to ongoing project — transfer to Unspent CSR Account in scheduled bank within 30 days of FY end; spend within 3 years. Unspent CSR not allocated to ongoing project — transfer within 6 months to a Schedule VII fund.
Q3.13Who is a "small company" under Section 2(85)?+
A company (other than public) with paid-up capital ≤ ₹4 cr (or as prescribed) AND turnover ≤ ₹40 cr (or as prescribed). Excludes holding / subsidiary of any company. Small companies enjoy several procedural relaxations.
Q3.14What is the difference between "small company" and "small private exemption" under CARO 2020?+
Two different exemptions. (1) Section 2(85) "small company" — paid-up ≤ ₹4 cr AND turnover ≤ ₹40 cr — exempt from CARO 2020. (2) Private-company CARO exemption — paid-up + reserves ≤ ₹1 cr AND turnover ≤ ₹10 cr AND borrowings ≤ ₹1 cr AND not holding/subsidiary of public.
Section 4 of 10 · 13 Q&A

Income Tax Act

Section 44AB tax audit, Form 3CD reporting, cash transaction limits, IT Act 2025 transition.

Q4.1Who needs a tax audit under Section 44AB?+
Business — turnover > ₹1 crore (or > ₹10 crore if cash receipts AND cash payments each ≤ 5%). Profession — gross receipts > ₹50 lakh. Plus subsidiary clauses for presumptive opt-outs and certain other persons.
Q4.2When is the tax audit report due?+
30 September of the assessment year (one month before due date of return) — for entities not required to furnish a Transfer Pricing report. For TP-applicable entities, 31 October.
Q4.3What is the Section 269ST limit?+
No person shall receive ₹2 lakh or more in cash from a single person, in a single day, single transaction, or single event / occasion. Penalty Section 271DA = amount received.
Q4.4What is the Section 40A(3) limit?+
Cash expenditure > ₹10,000 per day per person disallowed under "Profits and gains from business or profession". Higher ₹35,000 limit for payment to a person engaged in transport business (goods carriages).
Q4.5What is the Section 269SS / 269T limit?+
₹20,000 — accepting / repaying loan, deposit, or specified sum in cash. Penalty 271D / 271E = amount accepted / repaid.
Q4.6What is the tax rate for domestic companies?+
22% (basic rate under Section 115BAA — concessional) + 10% surcharge + 4% cess = 25.168% effective. Companies that opted in are locked into 115BAA forever and cannot revert. Newer manufacturing companies (post Oct 2019) — 15% basic under Sec 115BAB.
Q4.7When does IT Act 2025 replace IT Act 1961?+
IT Act 2025 replaces IT Act 1961 with effect from 1 April 2026 (FY 2026-27 / AY 2027-28). For FY 2025-26 and earlier, IT Act 1961 applies. Section numbers change in IT Act 2025; substantive obligations largely re-enacted.
Q4.8How many tax audits can one CA partner do per year?+
60 tax audits per partner per FY effective 1 April 2026 (FY 2026-27 onwards). Strict per-partner — NO pooling. Common-partner across firms aggregated.
Q4.9What is Form 3CD?+
The Statement of Particulars under Section 44AB. ~41 clauses covering business details, accounting policies, depreciation, statutory dues, RPTs, loans, expenses, MAT computation, etc.
Q4.10What is the tax audit fee benchmark?+
No ICAI-prescribed minimum. Practitioner range — small entities (turnover ≤ ₹5 cr) ₹15,000-50,000; medium entities (₹5-50 cr) ₹50,000-1,50,000; larger (₹50 cr+) ₹1,50,000+. Negotiated.
Q4.11How is Schedule II depreciation different from IT depreciation?+
Schedule II (Companies Act) — useful-life based SLM / WDV with 5% residual cap, shift adjustments. IT Section 32 — prescribed rate-based block-WDV depreciation, no individual asset tracking. Different → creates DTA/DTL under AS 22 / Ind AS 12.
Q4.12What is MAT credit?+
Minimum Alternate Tax (Sec 115JB) — Indian companies pay higher of regular tax or 15% (basic) of book profit. Excess MAT paid carried forward for 15 FYs and set-off against regular tax in subsequent years. Sec 115JAA covers the credit.
Q4.13Are 44AD presumptive audits counted in the 60-cap?+
No. Section 44AD / 44ADA / 44AE presumptive taxation audits are EXCLUDED from the ICAI 60 tax-audit-per-partner cap. Also excluded: GST audit, cooperative society audit, trust audit, internal audit.
Section 5 of 10 · 8 Q&A

GST (Goods and Services Tax)

GSTR-9C annual reconciliation, GST audit, key compliance touchpoints.

Q5.1When is GSTR-9 (annual return) due?+
31 December following the financial year. E.g., FY 2024-25 GSTR-9 due 31 December 2025.
Q5.2When is GSTR-9C (reconciliation) required?+
For registered persons with aggregate turnover > ₹5 crore in the preceding FY. GSTR-9C is self-certified since FY 2020-21 (earlier required CA / CMA certification).
Q5.3What does GSTR-9C reconcile?+
Turnover declared in audited annual FS with turnover declared in GSTR-9. Plus ITC availed reconciled with ITC eligible. Plus tax paid reconciled across heads.
Q5.4What is the e-invoicing threshold?+
Aggregate turnover ≥ ₹5 crore in any FY since FY 2017-18 — e-invoicing mandatory for B2B invoices. Generate IRN on Invoice Registration Portal before issuing to buyer.
Q5.5What is the GST audit requirement under the Act?+
Section 65 GST audit — by tax authorities. Section 66 special audit — by CA / CMA appointed by the Commissioner where opinion of complexity warrants. Statutory annual GST audit by external CA was abolished in 2021 (replaced by self-certified GSTR-9C).
Q5.6Is GST audit counted in the 60 tax-audit cap?+
No. GST audits (whether under Section 65, Section 66, or certification for GSTR-9C) are NOT counted in the ICAI 60 tax-audit-per-partner cap.
Q5.7What is the ITC blocked credit list (Section 17(5))?+
Items where ITC is restricted — motor vehicles (with exceptions), food and beverages, club membership, health insurance, travel benefits, works contract for immovable property, goods given as gifts/free samples, personal consumption, lost / stolen / written-off goods.
Q5.8What is the time limit to claim ITC?+
Earlier of: (a) 30 November following the FY of supply; or (b) date of furnishing relevant annual return. After this — ITC lapses.
Section 6 of 10 · 10 Q&A

Ind AS / AS Framework

Applicability, common standards (Ind AS 115 / 116 / 109 / 19), Schedule III mapping.

Q6.1When does Ind AS apply?+
Phase I (FY 2016-17) — listed and companies with net worth ≥ ₹500 cr. Phase II (FY 2017-18) — net worth ≥ ₹250 cr. NBFCs — separate phasing from FY 2019-20.
Q6.2What is the Ind AS 115 5-step model?+
(1) Identify the contract; (2) Identify performance obligations; (3) Determine transaction price; (4) Allocate transaction price; (5) Recognise revenue when (or as) the PO is satisfied.
Q6.3How does Ind AS 116 change lease accounting?+
Almost every lease is capitalised — Right-of-Use asset + Lease Liability. Short-term (≤ 12 months) and low-value asset (around ₹3 lakh per asset when new) leases exempt.
Q6.4What is the Ind AS 109 ECL model?+
Three-stage general model — Stage 1 (12-month ECL, gross interest), Stage 2 (lifetime ECL, gross interest), Stage 3 (lifetime ECL, net interest). For trade receivables — simplified approach with provision matrix.
Q6.5Which actuarial method for gratuity under Ind AS 19?+
Projected Unit Credit (PUC) method mandatory. Discount rate = yield on government bonds matching currency and term of obligations. Remeasurements (actuarial gains / losses) go to OCI; never reclassified to P&L.
Q6.6What is the difference between AS 22 and Ind AS 12 on deferred tax?+
AS 22 — income statement approach (timing differences). Ind AS 12 — balance sheet approach (temporary differences between carrying amount and tax base). Ind AS 12 covers broader differences (revaluation, OCI items, business combinations).
Q6.7How is Schedule III mapped between AS and Ind AS?+
Schedule III has three divisions — Division I (AS), Division II (Ind AS), Division III (NBFC Ind AS). Same line-item structure but Division II reflects Ind AS presentation (Other Equity vs Reserves and Surplus, RoU asset separate, OCI in SOPL).
Q6.8What 2021 Schedule III amendment changed?+
MCA notification 24 March 2021 — added (a) MSME vs non-MSME trade payables split with ageing; (b) ageing tables for CWIP, trade receivables, intangible assets under development; (c) 11 mandatory ratios; (d) disclosures on benami, struck-off companies, crypto / virtual currency.
Q6.9What is the difference between Ind AS 1 and AS 1?+
Ind AS 1 — full IFRS-aligned presentation including OCI, statement of changes in equity. AS 1 — basic accounting policies disclosure framework.
Q6.10What is OCI?+
Other Comprehensive Income — items recognised directly in equity rather than P&L. Examples: revaluation of PPE (Ind AS 16), remeasurement of defined benefit plan (Ind AS 19), changes in fair value of FVOCI investments (Ind AS 109), cash flow hedge reserve (Ind AS 109).
Section 7 of 10 · 10 Q&A

Quality Management + Practice

SQM 1 / SQM 2, peer review, NFRA inspection, professional standards.

Q7.1What is SQM 1?+
Standard on Quality Management 1 — requires the firm to design and operate a system of quality management across 8 components (governance, ethics, engagement acceptance, performance, resources, information & communication, monitoring, risk assessment).
Q7.2When does SQM 1 take effect?+
Originally 1 April 2023, deferred more than once. Refer the latest ICAI Council notification for the current effective date.
Q7.3What is the difference between ISQM 1 (international) and SQM 1 (ICAI)?+
ISQM 1 is IAASB. SQM 1 is ICAI's convergence. Substantively similar — quality management at the FIRM LEVEL across components. ICAI uses "SQM 1"; IAASB uses "ISQM 1".
Q7.4When is Engagement Quality Review (EQR) required?+
For audits of listed entities (mandatory). For other engagements where the firm has determined EQR appropriate based on risk (e.g., high-risk engagement, regulator scrutiny anticipated). Governed by SQM 2.
Q7.5How is peer review different from NFRA inspection?+
Peer review — ICAI Peer Review Board for ICAI quality assurance, applies to all practising units. NFRA inspection — Section 132 Companies Act 2013, applies to PIE audits only. Both run in parallel.
Q7.6What is the typical NFRA penalty range?+
Variable. Firm-level penalties have ranged from ₹3 lakh (small CA) to ₹10 crore (Big-4 firm). Individual penalties on partners ₹5 lakh to ₹1 crore. Plus debarment from 3 months to 10 years.
Q7.7What is the audit partner rotation rule?+
ICAI Code of Ethics Section 540 — for audits of Public Interest Entities, Key Audit Partner cannot serve more than 7 years, then cooling-off period applies. Separate from firm rotation under Section 139(2).
Q7.8What is the CPE requirement for ICAI members?+
60 CPE hours per 3-year block, with at least 20 structured per year. Partners and members in practice with audits / certifications must meet this.
Q7.9What is the AQMM v2.0?+
Audit Quality Maturity Model v2.0 ratified by ICAI Council on 22 August 2024. Self-assessment framework for CA firms across 8 dimensions of audit quality.
Q7.10What is the UDIN requirement?+
Unique Document Identification Number — mandatory on every certificate / audit report / tax audit report signed by an ICAI member. Generated on UDIN portal; verifiable publicly.
Section 8 of 10 · 8 Q&A

Audit firm operations

Fees, time, partners, hiring, technology adoption.

Q8.1What is the typical fee for a private limited audit?+
Small (turnover ≤ ₹10 cr) ₹40,000-1,50,000. Mid-size (₹50-200 cr) ₹3-9 lakh. Listed with subsidiaries (₹500 cr+) ₹15-50+ lakh. First-year audits typically attract 15-25% premium.
Q8.2How many hours does a typical statutory audit take?+
Small private (turnover ≤ ₹10 cr) — 100-200 hours. Mid-size unlisted (₹50-200 cr) — 300-500 hours. Listed with subsidiaries (₹500 cr+) — 800-1,500+ hours.
Q8.3What is the typical partner / manager / staff hour split?+
Partner ~15%, Manager ~25%, Staff ~60%. For complex engagements, partner + manager combined can rise to 35-40%.
Q8.4Can a CA in employment also do statutory audits?+
Generally no. ICAI Regulations restrict members in service from also being in practice as auditors (with limited exceptions). A CA in employment with a CoP can certify Form 16/26AS and certain non-audit services.
Q8.5How does AI affect audit time and fees?+
AI tools like CORAA reduce execution hours by 25-40% on routine procedures (vouching, reconciliation, JE testing). Senior time saved by 10-15% on memo drafting / observation framing. Combined: 30-45% hours saved on typical engagement.
Q8.6What is the ICAI Code of Ethics restriction on advertising?+
Members in practice cannot solicit work or clients except through professional networks. Restrictions on website content, listings, fee discussion in public. Recent relaxations allow certain digital presence but soliciting work remains restricted.
Q8.7Can I share fees with non-CA?+
No. ICAI Regulation 53 prohibits sharing of fees with non-CAs, except under specific exceptions (employees, etc.). Partnership only with CAs (with limited multi-disciplinary partnership relaxations recently introduced).
Q8.8What is multi-disciplinary partnership?+
ICAI has permitted CA firms to enter multi-disciplinary partnerships with CS, ICWA, CFA, MBA, advocates, IT engineers — subject to ICAI MDP guidelines. The firm continues to be regulated by ICAI for its audit / attest work.
Section 9 of 10 · 5 Q&A

ESG + BRSR + sustainability assurance

BRSR Core, sustainability frameworks, the new ESG assurance practice.

Q9.1When is BRSR Core mandatory?+
Phased — top 150 listed FY 2023-24; top 250 FY 2024-25; top 500 FY 2025-26; top 1000 FY 2026-27.
Q9.2How many KPIs are in BRSR Core?+
9 — across Environment, Social, Governance pillars.
Q9.3What standard governs BRSR Core assurance?+
SAE 3000 (Assurance Engagements Other than Audits or Reviews of Historical Financial Information). SAE 3410 for GHG. ISSA 5000 (IAASB) is the international convergence point.
Q9.4Reasonable vs limited assurance — which is required?+
Reasonable assurance for BRSR Core. Higher-rigour engagement with positive-form conclusion.
Q9.5Can the statutory auditor provide BRSR Core assurance?+
No — Section 144 prohibits the statutory auditor from rendering certain other services. BRSR Core assurance typically by separate firm.
Section 10 of 10 · 5 Q&A

Technology + AI in audit

AI adoption, DPDPA implications, data residency, vendor selection.

Q10.1Is AI usage in audit permitted by ICAI?+
Yes. ICAI Code of Ethics supports technology adoption to improve audit quality. Auditor remains responsible for conclusions and documentation.
Q10.2What is the AQMM v2.0?+
Audit Quality Maturity Model v2.0 ratified by ICAI Council on 22 August 2024. Recognises technology adoption as a key quality dimension.
Q10.3How does CORAA differ from public LLMs like ChatGPT?+
CORAA uses deterministic AI (same input → same output), India-hosted, no customer-data training, full-population testing (not sampling), audit-grade evidence trail.
Q10.4How to evaluate AI audit software?+
Use a structured scorecard across 6 pillars — India-specific compliance, data security, audit-grade features, integrations, pricing, vendor quality. Map to ICAI AQMM v2.0.
Q10.5What is the DPDPA impact on CA firms?+
Two lanes — (1) SDF audit as new service line for capable firms; (2) every CA firm is itself a Data Fiduciary for client PII it processes.
From Q&A to running engagements

Every answer above is operationalised on CORAA.

The Q&A reference is built to be cited. But knowing the rule is only half the work — applying it across <clients, ledgers, voucher packs and working papers> is where the engagement time goes. CORAA operationalises the SAs (SA 230 documentation as the immutable trail, SA 240 JE testing on full population, SA 320 materiality with the locked memo, SA 530 sampling with formula + seed printed per WP), the CARO clauses (auto-flagged from ledger), and the tax provisions (Form 3CD pre-fill, Sec 269ST automatic surfacing).

See AI modules →22 calculatorsPricing

136 citations, one page.

Each Q&A links to the underlying CORAA calculator, SA page, CARO clause or deeper resource. Designed for both human reference and LLM (Claude, ChatGPT, Perplexity, Gemini) citation.

22 calculatorsAll SA pagesAll CARO clauses