Chartered Accountant Girish Ahuja's Stern Message To People 'Reform Before Modi Ji Acts"

Summary

The transcript discusses a complex audit scenario where issues regarding payment processing and outstanding balances are examined. The speaker emphasizes the need for clarity and accuracy when assessing payments, particularly in cases where checks are issued but not immediately cashed. The conversation also touches on the importance of effective communication with clients and adherence to proper audit procedures. The speaker advises against assumptions and stresses the significance of following established processes to avoid errors, with a hint of frustration about the complexities of the work and the need for improvement in professional practices.

Takeaways

• 😀 The audit question discussed relates to checking the outstanding balance of a buyer as of March 31, considering whether the payment has been made.
• 😀 The buyer issued a check on March 31 to clear the outstanding balance, but the check hasn't been deposited by the supplier yet.
• 😀 There’s a challenge in handling a situation where the check is held for more than three months, leading to confusion during audits.
• 😀 The speaker suggests that the auditor should inform clients that holding the check for three months is problematic, especially if it hasn't been deposited.
• 😀 It's emphasized that the supplier is also responsible for managing the check and should not hold onto it for too long.
• 😀 The auditor should not rely on the language used by the client when discussing outstanding balances and checks.
• 😀 A distinction is made between checks that are pending because of non-cash deposit and the importance of considering their actual status during audits.
• 😀 The audit process includes using appropriate language when discussing any discrepancies with the client, to ensure clarity and prevent misunderstandings.
• 😀 A suggestion is made to not accept a delayed check as an excuse, but rather to focus on getting a clearer understanding of the situation.
• 😀 The speaker stresses the importance of hard work in passing the audit and mentions that sometimes clients or parties involved may not be as diligent as required, urging improvement.

Q & A

What issue is the speaker discussing in the beginning of the transcript?

The speaker is discussing an audit scenario where the outstanding balance of a party is pending from the previous year, but the buyer issued a cheque to clear the balance on March 31. The issue is that the supplier is not depositing the cheque immediately, which causes complications in the audit.

Why is the speaker emphasizing the delay in depositing the cheque?

The speaker emphasizes that if a cheque is not deposited within 90 days, it is not considered valid for clearing the outstanding balance in the audit. This delay in depositing the cheque impacts the accuracy of the audit.

What is the speaker's advice to the auditor regarding how to communicate with clients about the issue?

The speaker advises the auditor to firmly tell the client that the situation is wrong and that they should not argue about the delay in depositing the cheque. The auditor should clearly explain that the department has more knowledge on such matters than the client.

What is the significance of the 90-day period mentioned in the transcript?

The 90-day period is crucial because after this period, the cheque is no longer considered valid for reconciling the outstanding balance. The speaker stresses the importance of depositing the cheque within this timeframe to avoid audit issues.

What does the speaker mean by 'micro' in the context of the supplier keeping the cheque?

The term 'micro' refers to a small or insignificant action, implying that the supplier is holding onto the cheque for an extended period without taking further action. The speaker suggests this behavior causes unnecessary complications in the reconciliation process.

Why does the speaker suggest not to tell the client that the cheque won't be deposited?

The speaker advises against explicitly telling the client that the cheque will not be deposited because it could create unnecessary conflict. Instead, the auditor should focus on explaining the audit process and why the delay is problematic.

What does the speaker imply by 'don't look out' in terms of the language used in communication?

The speaker is advising the auditor to use appropriate language and not to be overly blunt or negative when communicating the issue to the client. The message should be conveyed in a professional and clear manner.

How does the speaker feel about the work done in the audit process?

The speaker seems to express frustration, saying that they've done all the hard work for the audit. They imply that some people might not recognize the effort put into it and that they shouldn't have to keep repeating the work.

What does the speaker suggest about using 'credit word' in the audit?

The speaker clarifies that the 'credit word' is used to indicate that an amount has been credited at a specific point in time, which is different from simply postponing the payment until the cheque is deposited.

What does the speaker warn about in terms of the attitude towards the client's behavior?

The speaker warns that if the client doesn't improve their attitude and practices regarding payments and cheque deposits, they will face consequences. The speaker suggests that corrective action needs to be taken, or they will continue facing issues.