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    Introduction: - 

    An auditor should obtain sufficient appropriate audit evidence in order to give opinion on the true and fair view of financials. Sufficiency and appropriateness of audit evidence shall depend on the assessed level of inherent and control risk of the entity. To assess the level of control risk, we exercise compliance procedures and based on the findings of the compliance procedures and other considerations like materiality, we decide the nature and extent of substantive procedures to be performed. 

    SA-200 “Basic principles governing an audit" (Erstwhile AAS-1) states that, "The auditor should obtain sufficient appropriate audit evidence through the performance of compliance and substantive procedures to enable him to draw reasonable conclusions therefrom on which to base his opinion on the financial information." 

    External Confirmation is a substantive procedure used to obtain audit evidence. SA-505 deals with “External Confirmations”. The purpose of this Standard on Auditing (SA) – 505 is to establish standards on the auditor's use of external confirmations as a means of obtaining audit evidence. 

    SA 505 is effective for audit of financial statements for period beginning on or after April 1, 2010. 



    An Internal Control is a practice, policy or procedure that is established within an organization to create value or minimize risk. Internal Controls are the methods put in place by a company to ensure the integrity of financial and accounting information, meet operational and profitability targets and achieve management policies throughout the organization. Internal controls are classified based on the size and nature of the business. Internal Control means different things for different people. 

    It helps an entity to achieve its performance and profitability targets and prevent loss of resources and ensure reliable financial reporting. It can help an organization in avoiding damage to its reputation and other consequences if properly executed. In sum, it pushes an entity to reach where it wants to go and avoid pitfalls 


    Agricultural land is a land on which agricultural activities are carried out. Agricultural activity has been held to be an activity where human effort has resulted in growing crops. 

    Once it is held that the land is agricultural then one of the major legal issues arising in the treatment of capital gain is, whether the land is situated within the area specified in item (a) and (b) of sub-clause (iii) of clause (14) of Section 2. 


    Over the years, investors and analysts have developed numerous analytical tools, concepts and techniques to compare the relative strengths and weaknesses of companies. These tools, concepts and techniques form the basis of fundamental analysis. 

    Ratio analysis is a tool in quantitative analysis of the operating &financial performance of a business organization such as efficiency, solvency, profitability, etc. of a particular period from the financial statements like Balance Sheet, Profit & Loss A/c, Cash Flow Statements, etc. 

    The trend of these ratios is studied to check whether the organization is improving or deteriorating.


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