Vide Finance Act, 2020, Ministry of Finance amended the provisions related to Equalisation levy and has extended the scope of same to cover non-resident e-commerce operators operating in India without having any permanent establishment in India such as Zoom, netflix, ebay etc. The amendment was given effect from 1st April, 2020.
FAQs on Due & Diligence Audit
While the audit is an independent examination of financial statements and it is carried out for the benefit of all stakeholders of the company. However, due diligence is the examination of the entire business for a potential investment and it is carried out for specific stakeholder to assure the consensus between the facts presented and one that is actual.
A review, audit or investigation conducted to identify correctness, completeness and and assurance of the facts presented about the matter in consideration is called due diligence.
Due diligence can be voluntary as well as legally binding. Some examples are evaluating the assets of the company to be acquired, carrying out Tax due diligence to identify possible legal liability that may come up in future, or operational due diligence when there is a change in team or function or department, etc, financial due diligence is carried out before sanctioning any loan or credit facility to identify credit worthiness of the business.
Due diligence can be conducted by any individual or a firm who is an expert in the field. However, these days Chartered Accountants are preferred as they are efficient and carry a thorough knowledge about all the streams, and laws and regulations
Conduction of a prudent review by an expert is due diligence. It is required so as to assess the opportunities, threats, potential risks in a deal to be conducted before entering any contract or agreement
- Analyze the financial situation
- Inspect financial statements and accounting procedures
- Human resources and practices
- Legal aspects
- Size of both the parties
- Management and leadership
- The business