Test Your Knowledge On Audit Of LLP Under Various Acts

MCQ SELF CHALLENGE # 0075 ON AUDIT OF LLP UNDER VARIOUS ACTS

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Here is the next post of MCQ on concept-based practical professional knowledge on Audit of LLP under various Acts in a unique manner to be self-answered by participants. Our tax consultant in Gurgaon will share the detailed answers to these MCQs on the next day for the self-assessment of the participants.

MCQ 75.1: ABC and CO LLP, a firm of Professionals has a capital of Rs 20 lakhs and turnover of Rs 45 Lakhs during the year 2017/187 Which among the following is correct in relation to the audit of LLP?

A) audit of LLP is required in both LLP and the Income Tax Act.

B) Audit under the LLP Act is required but an audit under Income Tax is not required.

C) Audit is not required under both Acts

D) None of the above.

MCQ 75.2: What if in the above question Turnover is Rs 30 Lakhs?

A) Audit of LLP is required in both LLP and the Income Tax Act.

B) Audit under the 11P Act is required but an audit under Income Tax is not required

C) Audit is not required under both Acts.

D) None of the above,

Answer MCQ Self Challenge # 0075

This post of MCQ is on provisions relating to audits under various acts

Answer to MCQ 75.1:

C) Audit is not required under both Acts.

Answer to MCQ 75.2:

C) Audit is not required under both Acts.

Practical Analysis for MCQ 75.1 And 75.2

• LLPs in India are governed by the LLP Act which altogether has different rules & regulations as compared to the Companies Act & Income Tax Act .
• It is necessary to understand that since the laws governing all types of organization structures are different, the requirement of audit is also different as per different laws.
  
• The law relating to each type of organization is described below

Organization

Law

Companies

Companies Act

LLP's

LLP Act

Partnership Firms of Individuals

Partnership Act

Organization

Audit

Companies

Mandatory in all cases

LLP's

Mandatory if Turnover exceeds Rs 40 Lakhs and Contributions exceed Rs 25 lakhs

Partnership Firms of Individuals

Not required

• However audit under the Income Tax Act is applicable to all types of organization structure and is independent of rules & regulations covered under different laws.
• As per the Income Tax Act, every person is required to get their accounts audited if their turnover exceeds Rs 3 crore in case of business or Rs 50 lakh in case of professionals
• Based on the above analysis, correct answer MCQ 75.1: C) Audit is not required under both Acts.
• Correct answer MCQ 75 2: C) Audit is not required under both Acts

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as a professional opinion; you can definitely have your own opinion.)

Sincere Regards!

CA Sanjay Kumar Agrawal

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