Professional Documents
Culture Documents
EXECUTIVE SUMMARY
Tata Motors Limited is India's largest automobile company, with consolidated revenues
of INR 1,88,818 crores (USD 34.7 billion) in 2012-13. It is the leader in commercial
vehicles in each segment, and among the top in passenger vehicles with winning
products in the compact, midsize car and utility vehicle segments. It is also the world's
fourth largest truck and bus manufacturer.
The Tata Motors Group's over 60,000 employees are guided by the mission "to be
passionate in anticipating and providing the best vehicles and experiences that excite
our customers globally."
Established in 1945, Tata Motors' presence cuts across the length and breadth of India.
Over 7.5 million Tata vehicles ply on Indian roads, since the first rolled out in 1954.
The company's manufacturing base in India is spread across Jamshedpur (Jharkhand),
Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand
(Gujarat) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it
has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon
(Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. The company's
dealership, sales, services and spare parts network comprises over 3,500 touch points.
Tata Motors, also listed in the New York Stock Exchange (September 2004), has
emerged as an international automobile company. Through subsidiaries and associate
companies, Tata Motors has operations in the UK, South Korea, Thailand, Spain, South
Africa and Indonesia. Among them is Jaguar Land Rover, acquired in 2008. In 2004, it
acquired the Daewoo Commercial Vehicles Company, South Korea's second largest
truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has
launched several new products in the Korean market, while also exporting these
products to several international markets. Today two-thirds of heavy commercial
vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors
acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach
manufacturer, and subsequently the remaining stake in 2009.
INDEX
M.COM-2(SEM-3)
Page 1
SR.
NO.
TITLE
PAG
E
NO.
3
1.
MEANING OF AUDITING
2.
3.
4.
5.
12
6.
MEANING OF AUDITOR
14
7.
17
8.
20
9.
24
10.
26
11.
37
12.
CONCLUSION
39
13.
BIBLIOGRAPHY
40
M.COM-2(SEM-3)
Page 2
1.MEANING OF AUDITING
The word audit is derived from the Latin word audire which means to hear. It is an
important tool of management. It is concerned with making an analytical an critical
analysis of the books of accounts, checking and verification of evidence in support of
entries appearing in the books of accounts, and ascertaining the authenticity of the
financial statements. It is also concerned with the examination of accounting data to
determine the extent of an audit examination is too made on the basis of evidential
document such as invoice, money receipts and other records by the authorized
representative of the client. Auditor has used to send for the accountants and hear
whatever they had to say in connection with the accounts. The auditor has to look into
the facts behind figures and he must certify their accuracy. Auditing is to ascertain the
balance sheet and profit and loss account that they show a true and fair view of the
financial state of affairs of a concern. The Institute of Charted Accountants of India has
issued a number of statements of standard auditing practices and accounting standards
for guidance of Auditor of India.
DEFINITION OF AUDITING
According to DICKSEE, An audit may be said to be such an examination of the books,
accounts and vouchers of a business, as will enable the auditor to satisfy himself that
the balance sheet is properly drawn up, so as to exhibit a true and fair value of the state
of the affairs of the business, whether the profit and loss account gives a true and fair
value of the profit and loss for the financial year. According to the best of his
information and explanations given to him and as shown by the books, and if not, in
what respect he is not satisfy.
M.COM-2(SEM-3)
Page 3
ORIGIN OF AUDITING
Auditing has its origin in the necessity in the development of some system to put a
check on the persons whose duties were to record receipts and disbursements of money
on the behalf of owners. In the ancient days auditing was confined to public accounts
only. With the development of trade and commerce, the need for recording transactions
was felt by businessman. This had necessitated the development of some system of
check upon the persons who recorded such transactions on the behalf of businessman.
The audit in its present shape is the result of large-scale production in
consequence of Industrial Revolution during the 18th Century. With the development of
banking facilities, communication and transport means, the concept of corporate
management has taken birth. It necessitated the investors to know whether their
investment is safe or not. Shareholders need an independent person having expert
knowledge of accounts to report on the working of the company and truthfulness of the
profit or loss and financial position disclosed by the management.
M.COM-2(SEM-3)
Page 4
M.COM-2(SEM-3)
Page 5
transactions.
Reviewing the system of accounting and Internal Controls.
To verify the valuation and existence of assets.
To examine the mathematical accuracy of accounting statements.
To see whether the statutory requirements have been complied with.
Reporting as to what extent, accounts exhibit true and fairness.
To make recommendations for improvement in Internal Control and Accounting
System.
To verify the distinction between capital and revenue items.
OBJECTIVES OF AUDITING
(A) Verification of accounts and financial statement
The main objective of an audit is to verify and establish that at a given date balance
sheet presents true and fair view of financial position of the business and the profit and
loss account gives the true and fair value of the profit or loss for the accounting period.
The auditor must:Verify the accuracy of posting, balancing etc
Confirm the validity of transactions with supporting documents
Confirm existence of assets and liabilities
Assess the system of internal control
Ascertain whether distinction has been made between capital and revenue items
(B) Fraud
Fraud is the word used to mean intentional error. This is done deliberately which
implies that there is intent to deceive, to mislead. These are more serious than
intentional errors. A great variety of intentional errors may be found. Intentional errors
are the most difficult to detect and auditors generally devote greater attention to this
type. Auditors while studying the possibility and nature of fraud must keep this always
M.COM-2(SEM-3)
Page 6
M.COM-2(SEM-3)
Page 7
Page 8
M.COM-2(SEM-3)
Page 9
Page 10
it is appropriate for the business and helps in properly recording all transactions.
Reviewing the systems and procedures to find out whether they are adequate and
comprehensive.
Check the arithmetical accuracy of books of accounts by the verification of postings,
balances etc.
Examine the documentary evidence to establish the accuracy, authenticity and validity
of transactions recorded.
Verifying that a proper distinction is made between capital and revenue items.
Verification of the title, existence and valuation of assets appearing in the balance sheet.
Examination that the statutory requirements are complied with.
Verifications of the liabilities stated in the balance sheet.
Comparison of balance sheet and profit and loss account and other statements with
underlying records in order to see that they are in accordance there with.
Checking the results shown by the balance sheet and profit and loss account to see
5. ADVANTAGES AND LIMITATIONS OF AUDITING:ADVANTAGES :The fact that audit is compulsory by law, in certain cases by itself should show that
there must be some positive utility in it. The chief utility of audit lies in reliable
M.COM-2(SEM-3)
Page 11
LIMITATIONS OF AUDIT
At this stage, it must be clear that the objective of an audit of financial statements is
to enable an auditor to express an opinion on such financial statements. In fact, it is the
auditors opinion which helps determination of the true and fair view of the financial
position and operating results of an enterprise. It is very significant to note that the
M.COM-2(SEM-3)
Page 12
6. MEANING OF AUDITOR
The person conducting audit is known as the Auditor;
he makes a report to the person appointing him after due examination of the accounting
records and the accounting statement in the form of an opinion on the financial
M.COM-2(SEM-3)
Page 13
Page 14
reliability
of
company
or
organizations
financial
statements.
M.COM-2(SEM-3)
Page 15
1.
1. The company that has been audited and what their accounting method is
2.
3.
4.
4. Conclusion
5.
6.
6. A management report*
7.
M.COM-2(SEM-3)
Page 16
The rights of the company auditor can not be limited or abridged in any way. Any
resolution limiting the powers of the auditor or any such provision in articles of
association will be void. Following are powers/rights of auditors:Access to books and vouchers
Every auditor of company shall have a right to access at all times to the books and
accounts and vouchers, whether kept at head office of company or elsewhere. Auditor is
not required to wait for the closing of accounts for conducting the audit. The words all
times means only the normal business hours. All types of documents, agreements,
correspondences, financial books, statistical books, memorandum books, etc are
covered.
Right to obtain information and explanations
Auditor may require the officers of the company to provide such information as he may
think necessary for the permanence of his duties. It will be obligatory for the officers of
the company to furnish without delay the relevant information to the auditors.
Right to visit branch offices and access to branch accounts
Where accounts of any branch office are audited by another person, the company
auditor:
Shall be entitled to visit the branch office, if he deems it necessary to do so for the
performance of his duties as auditor
Shall have a right to access at all times to books and accounts and vouchers of the
company maintained at the branch office.
Right to attend General Meeting
All the notices and other communications relating to any general meeting also be
forwarded to the auditors of a company along with shareholders/members. Auditors
shall be entitled to attend any general meeting and to be heard at any general meeting
which he attends on any part of the business which concerns him as auditor.
Auditors lien
Auditors lien on his clients books and records is unconditional. Auditor can exercise
M.COM-2(SEM-3)
Page 17
DUTIES OF AUDITOR
The statutory duties of an auditor cannot be limited in any way either by Articles of
Association or Directors or by members. However, a company may extend them. The
following are the duties that the auditor has to perform:
Auditor has to state whether in his opinion and to the best of his information and
according to the explanations given to him, the accounts, give a fair and true view in
the case of the balance sheet, of the state of the companys affairs as at the end of its
financial year and in the case of the profits and loss account, of the profits and losses
for its financial year. Following guidelines may be laid down in this regard:
Balance sheet and profit and loss account should be as per requirements of The
M.COM-2(SEM-3)
Page 18
Auditor has to state whether he has obtained all the information and explanations
which to the best of his knowledge and belief were necessary for the purpose of his
audit.
He is required to state whether in his opinion, proper books of accounts as required by
law have been kept by the company, so far as appears from his examination of these
books, and proper returns adequate for the purpose of his audit have been received
M.COM-2(SEM-3)
Page 19
Page 20
M.COM-2(SEM-3)
Page 21
in
manufacturing
processes,
significantly
enhancing
resource
conservation.
Through its subsidiaries, the Company is engaged in engineering and automotive
solutions, construction equipment manufacturing, automotive vehicle components
manufacturing and supply chain activities, machine tools and factory automation
solutions, high-precision tooling and plastic and electronic components for automotive
and computer applications, and automotive retailing and service operations.
Tata Motors is committed to improving the quality of life of communities by working
on four thrust areas employability, education, health and environment. The activities
touch the lives of more than a million citizens. The Company's support on education
and employability is focussed on youth and women. They range from schools to
technical education institutes to actual facilitation of income generation. In health, our
intervention is in both preventive and curative healthcare. The goal of environment
protection is achieved through tree plantation, conserving water and creating new water
bodies and, last but not the least, by introducing appropriate technologies in our
vehicles and operations for constantly enhancing environment care.
With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.
M.COM-2(SEM-3)
Page 22
Page 23
After purchasing these shops, the Tata sons decided to establish Tata Engineering and
Locomotive Company Limited (TELCO Limited) and establish the primary
manufacturing facility in Jamshedpur (an industrial city in Eastern India). This
company was managed by J.R.D. Tata from 1945 to 1973 and by Sumand Moolgaokar
from 1973 to 1988.
Sumand established the second manufacturing facility in Pune India looking into the
boom in the auto market. In 1991 Ratan Tata took over the Tata Empire from his uncle
and moved the Tata group out of the sectors where they were not very competitive
like Cement and Textiles. Today, Tatas largest manufacturing businesses are Steel and
Motors after the consolidation carried out by Ratan Tata. As on end of financial year
2008, the Tata Group has an annual turnover in excess of $30 Billion out of which more
than $9 Billion is contributed by Tata Motors.
TELCO Limited is now widely known as Tata Motors that is among the worlds top
five manufacturers of medium and heavy trucks and worlds second largest
manufacturer of medium and heavy busses. Tata possess a strategic engagement with
Mercedes Benz for assembling and selling Mercedes Benz commercial vehicles and
passenger cars in India.
Another strategic tie up that they possess is with Cummins pertaining to their diesel
engines through Tata Holset Limited. In fact, Tata Motors contributed to the Cummins
Diesel engines by adding turbo chargers on them vide their joint manufacturing
operations with Tata Holset Limited.
M.COM-2(SEM-3)
Page 24
The other car models of Tata Motors that are popular in India and some markets of Asia
are Tata Indigo, Tata Sierra, Tata Sumo and Tata Safari. In 2008, Tata achieved a global
publicity due to two major activities that made headlines worldwide. In the Geneva
Motor show they presented their four-seater small car named Nano priced about
$2500 which is expected to be the cheapest car of the world.
In March 2008, Tata Motors acquired the two globally prestigious companies Jaguar
and Land Rove
from Ford Motor Company. It is assessed that Tata Motors did so to achieve a new
image of a global
automotive company like Ford Motor Company given that their business span has
largely remained indigenous within India for a long time.
M.COM-2(SEM-3)
Page 25
AUDITORS RESPONSIBILITY
Our responsibility is to express an opinion on these financial statements based on our
audit. We conducted our audit in accordance with the Standards on Auditing issued by
the Institute of Chartered Accountants of India. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain
reasonable
assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts
and the disclosures in the financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the
Companys preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Companys internal control.
An audit also includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the Management, as well
as evaluating the overall presentation of the financial statements.
M.COM-2(SEM-3)
Page 26
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the Act
in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March
31, 2013;
(b) in the case of the Profit and Loss Statement, of the profit of the Company for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the
year ended on that date.
M.COM-2(SEM-3)
Page 27
M.COM-2(SEM-3)
Page 28
M.COM-2(SEM-3)
Page 29
M.COM-2(SEM-3)
Page 30
M.COM-2(SEM-3)
Page 31
M.COM-2(SEM-3)
Page 32
Central
Excise
Laws
Sales Tax
Laws
Nature of Dues
Forum where
Dispute is
Income tax
Commissioner (Appeals)
Income tax
Appellate Tribunal
Tribunal
Commissioner (Appeals)
Additional Commissioner
Joint Commissioner
Deputy Commissioner
Asst. Commissioner
Sales Tax
Supreme Court
Sales Tax
High Court
Sales Tax
Tribunal
Sales Tax
Commissioner (Appeals)
Sales Tax
Joint Commissioner
Sales Tax
Additional Commissioner
Sales Tax
Deputy Commissioner
Sales Tax
Assistant Commissioner
Sales Tax
Name of Statute
Income tax
2003-04 to 2009-10
2007-08
M.COM-2(SEM-3)
Amount
Involved
(Rs. in
crores.)
44.97
3.40
Page 33
2249.15
83.13
2012-13
0.66
2012-13
0.21
2012-13
0.04
2012-13
0.09
1995-96
13.01
18.83
7.21
0.20
222.33
19.46
3.68
1.06
1.83
(xi) The Company does not have any accumulated losses at the end of the financial year
and has not incurred cash losses during the financial year covered by our audit and the
immediately preceding financial year.
M.COM-2(SEM-3)
Page 34
(xii) In our opinion and according to the information and explanations given to us, the
Company has not defaulted in the repayment of dues to financial institutions, banks and
debenture holders.
(xiii) Based on our examination of the records and the information and explanations
given to us, the Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiv) In our opinion and according to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from banks or financial
institutions.
(xv) In our opinion and according to the information and explanations given to us, the
term loans have been applied by the Company during the year for the purposes for
which they were obtained.
(xvi) In our opinion and according to the information and explanations given to us and
on an overall examination of the Balance Sheet of the Company, as at March 31, 2013,
we report that funds raised on short term basis of Rs.8,439.39 crores have been used
during the year for long-term investment. Further the Company has explained that
steps are being taken to augment long term funds.
(xvii) According to the information and explanations given to us, the Company has not
made any preferential allotment of shares to parties and companies covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(xviii) According to the information and explanations given to us, during the period
covered by our audit report, the Company has not issued any secured debentures.
(xix) According to the information and explanations given to us, during the year
covered by our audit report, the Company has not raised any money by public issue.
M.COM-2(SEM-3)
Page 35
(xx) To the best of our knowledge and according to the information and explanations
given to us, no fraud by the Company and no material fraud on the Company has been
noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117366W)
N. VENKATRAM
Partner
(Membership No. 71387)
M.COM-2(SEM-3)
Page 36
M.COM-2(SEM-3)
Page 37
12. CONCLUSION
Tata Motors is also expanding its international footprint, established through exports
since 1961. The company's commercial and passenger vehicles are already being
marketed in several countries in Europe, Africa, the Middle East, South East Asia,
M.COM-2(SEM-3)
Page 38
in
manufacturing
processes,
significantly
enhancing
resource
13. BIBLIOGRAPHY
1.
^ "Audit assurance".
M.COM-2(SEM-3)
Page 39
2.
3.
4.
http://www.tata.com
5.
http://tatamotors.com
6.
http://www.wikipedia.com
M.COM-2(SEM-3)
Page 40