Providing guarantee is a very common part of business finance wherein one person provides guarantee to the bank or financier on behalf of the other person for securing loan or credit facility. In some cases, commission is paid as a consideration for providing guarantee. CBIC has received various representations with respect to applicability of GST on personal guarantee provided by Director to the bank for granting credit facility to the company or corporate guarantee provided by the company on behalf of its sister concern or subsidiary company.
FAQs on Management Audit
Detailed scrutiny of the actions and decisions of the management for investigation and inspection of the performance of the entity is called management audit. It includes analysis of managerial factors like plans, procedures, policies, objectives, structure, control system to check the coherence and competence of the entity.
A management audit is conducted successfully through the following steps:
- Planning the audit
- Collecting relevant information through various measures
- Executing the audit and conducting fieldwork
- Audit report and recommendations
- Discussion with management
- Final report
- Follow up of the report
- Actions by the management