What we do
Our work in this practice group is structured around the records, deadlines, and decisions involved:
- Independent examination of the trust’s books and financial records.
- Review of donations, grants, expenses, investments, and utilization of funds.
- Assessment of compliance with applicable Income Tax and trust-related requirements.
- Identification of accounting errors, documentation gaps, and control weaknesses.
- Assistance with prescribed audit reporting requirements.
- Improved transparency and accountability to trustees, donors, and other stakeholders.
- Better readiness for Income Tax filings, registrations, and related compliance.
How the engagement works
Trust audit requirements depend on the legal status of the trust, its income, registration or approval status, and the applicable provisions of the Income-tax Act, 1961 and other relevant laws. Eligible charitable or religious trusts claiming exemption under the applicable provisions may be required to obtain an audit report in the prescribed form, including Form 10B or Form 10BB where applicable based on the relevant statutory conditions. The applicable reporting form, threshold, audit requirement, and filing timelines depend on the facts of the trust and the law applicable for the relevant assessment year.
Scenario 1: A charitable trust is required to obtain an audit report for its Income Tax compliance and exemption-related requirements.
Scenario 2: A trust receives donations, grants, or other funds and wants an independent review of their accounting and utilization.
Scenario 3: Trustees want to verify whether income and expenditure are appropriately recorded and supported by relevant documentation.
Scenario 4: A trust wants to ensure that its financial records and statutory reporting are properly aligned before filing its Income Tax Return.
Scenario 5: A charitable organization wants to identify accounting or compliance gaps before applying for or maintaining applicable Income Tax registrations and approvals.
Trust Accounts Examination
We examine the trust’s books of account, ledgers, cash and bank records, income, expenses, assets, liabilities, and other financial information.
Donation & Grant Verification
We review donations, grants, contributions, and other receipts and examine relevant supporting records and documentation.
Fund Utilization Review
We examine the utilization of funds and related expenditure records to assess their accounting treatment and relevance to the trust’s stated activities and applicable requirements.
General questions
01What is a trust audit?
A trust audit is an independent examination of a trust’s books of account, income, expenditure, assets, liabilities, donations, investments, and other financial records to meet applicable statutory and reporting requirements.
02Does every charitable trust require an audit?
The audit requirement depends on the trust’s income, registration or approval status, exemption claims, and other conditions prescribed under applicable law. The specific requirement should be determined based on the trust’s circumstances for the relevant assessment year.
03What is Form 10B for a charitable trust?
Form 10B is a prescribed audit report applicable to certain trusts or institutions under the Income-tax Act, subject to the conditions and reporting requirements applicable for the relevant assessment year.
04What is Form 10BB?
Form 10BB is another prescribed audit report applicable to certain eligible trusts or institutions depending on the statutory conditions and circumstances. The appropriate form depends on the applicable Income Tax requirements for the relevant assessment year.
05What documents are required for a trust audit?
Documents may include books of account, financial statements, bank statements, donation records, grant details, expenditure vouchers, investment records, asset registers, trust deed, registration documents, previous audit reports, and other relevant tax records.
06Can you help with Income Tax filing after the trust audit?
Yes. We can assist with coordinating the audit information with the applicable Income Tax Return, audit report filing, and other relevant tax compliance requirements.
07Can a trust audit identify compliance issues?
Yes. The audit process may identify accounting errors, documentation gaps, fund utilization issues, reporting matters, and other areas requiring attention based on the scope of the audit and applicable statutory requirements.
