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CCOUNTANT
T H E
N E P A L
September 2015
Vol. 18 No. 1
September 2015
Vol. 18 No. 1
Chairman
Vice-Chairman
Member
Member
Member
Member
Member
Member
Member
Secretary
Editorial
President's Message
Auditing
Internal Audit: An Effective Tool to Augment Public Financial Management
15
Banking
20
Economy
24
Management
Organizational BehaviorAlmost Missing Module in Nepali Corporate
27
Taxation
VAT on Duty Meal Supply to Hotel Staffs : An Overview and an Analysis
31
Other
Walking in Two Different Heels
34
40
News
Notices
Contribution
Citizen Investment Trust
Civil Bank Limited
Sunrise Bank Limited
Ncell Pvt. Ltd.
44-49
30,33,50,53
The monetary policy aims to help achieve the GDP growth and inflation targets, and to
maintain balance of payments stability. The Governor of Nepal Rastra Bank made public
announcement of a new monetary policy on 2072.04.07.The monetary policy for 2015/16
aims at maintaining price as well as financial stability along with achieving balance of
payments surplus so as to support the overall economic development of the country. It
primarily focuses on supporting the economy and buttress the post-earthquake reconstruction
process through a competitive, inclusive and production oriented financial development.
The fiscal year 2015/16 is considered to be important in devising the long-term development
course of the country. This is followed by the promulgation of new constitution along with
the efforts to rejuvenate the earthquake embattled economy with an estimated loss of Rs.
666 billion, as per the preliminary analysis of Post Disaster Need Assessment Report.
Considering the domestic economic situation, the GDP growth remained lower in 2014/15
compared to the previous year because of the contraction in the growth rate of agriculture
sector due to delayed monsoon and the negative impact of the earthquake of 25th April, 2015
and subsequent aftershocks. According to the preliminary estimates of the Central Bureau
of Statistics (CBS), the real GDP grew by 3.0 percent at basic price and 3.4 percent at
producers' price in the review year.
As far as financial market is concerned, financial access has been widened due to branch
expansion as well as an expansion of some products such as mobile banking and branchless
banking, despite the decline in the number of Banks and Financial Institutions (BFIs) as a
result of merger and acquisition.
BFIs credit exposure to the industrial production, construction, wholesale and retail trade
shows a remarkable growth in the review period. Similarly, deposits at BFIs increased by
15.4 percent in the review period.
The central bank has been using Open Market Operations (OMOs) as a major instrument
for maintaining monetary aggregates and interest rates at a desired level, through deposit
auction; reverse repo auction and outright sale auction. BFIs managed short-term liquidity
through interbank transactions and standing liquidity facility (SLF) provided by the bank
during the year 2014-15.
Monetary Policy and Financial Sector Programs for 2015/16 have mainly focused on the
economy that is in need of mobilizing huge resources for reconstruction and rehabilitation
to recover human and physical losses caused by the earthquake. Equally important is to
consider the possible effect emanating from the expansion of loans and advances along with
the increased government spending on macroeconomic stability.
Similarly, a special policy provision will be made in order to provide the license for the
establishment of a national level infrastructure bank. BFIs will be required to increase
the minimum paid up capital in order to promote the financial stability and mobilize the
resources needed for the long-term development.
The Financial Sector Reform, Regulation and Supervision activities are helpful in attaining
financial stability, expanding financial access and inclusion, enhancing competition and
promoting corporate governance. The financial literacy and awareness program will be
taken to avoid the duplication of micro-finance services. New micro finance institutions
(MFIs) will be licensed only in the financial service deficient areas. Similarly, MFIs will be
permitted to expand their branches only in the unbanked areas or where presence of such
institutions is low. Moreover, setting up of economy and monetary targets, management of
foreign exchange attributes to maintain macroeconomic stability and supporting the revival
of the earthquake devastated economy.
Cooperation and support from the Banks and Financial Institutions (BFIs) as well as other
concerned stakeholders will be crucial in the successful implementation of the policy
provisions.
Dear Colleagues,
Pursuant to Nepal Chartered Accountant Act, 1997 and related
Rules the election for 7th Council of the Institute of Chartered
Accountants of Nepal (ICAN) was successfully held on June
12, 2015. I feel honored to assume the high office as the 19th
President of ICAN and bow to the past Presidents for their
untiring efforts to bringing our Institute and profession to its
present status. I express thanks to the Council members for
bestowing their trust by giving me the opportunity to serve as
President. I would also like to thank all the members of the
Institute for electing me to the Council for second consecutive
time since 2012.
As we know ICAN was established as an autonomous body
in 1997 with the aim to promote, develop and regulate the
accounting profession in the country. Its vision is to establish
it as Credible Professional Accounting Body.
In the view of the legal mandate, the Institute has made some
significant achievement in establishing it as a recognized
body of professional accountants in the country. Although it
is challenging in making the Institute more professional and
competitive in the global accounting fraternity for which we
need to demonstrate our leadership ability to run the Institute
in effective, accountable and responsible manner. Considering
this fact, last year ICAN prepared and approved its maiden
Strategic Plan (2014-15 to 2017-18) to undertake its activities
in a strategic manner in line with vision of our Institute.
In the capacity of President this is my first message and would
like to take this opportunity to update entire membership with
regards to some major activities performed and initiatives that
we plan to undertake during 2015/16 based on Strategic Plan.
International Relation
As usual we will continue to maintain and strengthen
our links with international and regional organizations
like IFAC, CAPA, SAFA and accounting bodies of other
countries. Similarly, effort will also be continued for
mutual agreement especially in SAFA Level. In particular,
major responsibilities of the Institute is to get international
recognition, with respect to professional quality and its
credibility. It is the responsibility of current and future
leadership as well management to carry out this activity
on consistent basis.
I wish once again, to place on record my sincere gratitude
for the confidence reposed on me to serve the Institute
and seek support and cooperation from member and
stakeholders to discharge my responsibilities.
I assure you to keep you abreast of activities as well as
important developments within ICAN via subsequent
issue of our Journal.
Best wishes
CA. Prakash Lamsal
President
AUDITING
Internal Audit:
An Effective Tool to Augment Public Financial Management
1. Background:
The main role of internal audit
is to ensure management that
official controls are being
applied in effective manner. The
role and responsibility and scope
of the internal audit depend up
on legislative mandate given to
it.
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AUDITING
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AUDITING
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AUDITING
10
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AUDITING
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11
AUDITING
12
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AUDITING
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13
10. Conclusion
References:
14
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AUDITING
Introduction
In general, public-sector audits
can be categorised into three
main types: financial statements
audit, compliance audit and
performance audit. However,
many audit approaches have
been developed to supplement
those main categories audits.
New audit approaches such as
IT audit, environmental audit,
concurrent audit, risk-based
audit, integral audit, social audit
etc. have been promulgated.
September 2015
15
AUDITING
Mandate
SAIs are empowered with necessary mandates, normally
with the constitutional mandate, to ensure sufficient
independency and power of discretion in carrying out
public sector audits. As per international practices,
SAIs are mandated to carry out financial, compliance,
performance audits and other engagements. The
mandates of SAIs define their general responsibilities
in the field of public-sector auditing and provide
further prescriptions concerning the audits and other
engagements to be performed. They are normally
empowered to report unauthorized expenditures, waste
of public resources, non-compliance of existing statutes,
violation of financial procedures resulting misuse or
loss of public funds.
The organizational structures of SAIs may differ along
with their legal mandates. SAIs may be mandated to
perform various types of audit engagements according to
the legislated mandates and organization independency.
SAIs may be an institution headed by a single person (Westminister Model), or a Commission or Board (Collegiate
Model), or a court or tribunal (Judicial Model). The single
person model is also popular in two forms-i.e. Auditor
General and Comptroller & Auditor General. The post
of Auditor General is found in countries- Nepal, China,
Pakistan; whereas the post of Comptroller and Auditor
General is practiced in the countries India, Bangladesh,
United Kingdom. In collegiate model, SAIs are headed
by a group or team of persons instead of a single person.
Collegiate models have existed in countries like- Japan,
Korea, and Philippines etc. In court model, SAIs are
composed of judges and empowered to take decision on
irregularities and financial implications, which is popular
in European countries- Netherlands, Spain, Belgium etc.
In all above forms, SAIs are generally made independent
to reports on their audit findings.
In Nepal, the Interim Constitution of Nepal 2063 (2007)
has provisioned the post of Auditor General (AG) as a
16
September 2015
Role of Auditing
SAIs play significant role in promoting public sector
accountability and transparency. SAIs audits provide with
information and independent and objective assessments
concerning the performance of government policies,
programmes or operations. SAIs provide the basis of
credibility and objectivity through the use of specialized
expertise knowledge on government business, use of
commonly accepted international professional audit
standards and procedures, and unbiased report on public
affairs. SAIs serve as important pillars of their national
democratic systems and governance mechanisms and
play an important role in enhancing public-sector
governance by emphasising the principles of transparency,
accountability, governance and performance. By
conducting independent assessments of the management
of public resources and its performances, the SAIs
AUDITING
Audit Objectives
The primary objective of financial audit is to obtain
reasonable assurance about whether financial statements
are free from material misstatement due to fraud or error
and express an opinion on the true and fairness of financial
statements. In public sector, mostly in developing
countries issues like: waste of resources, frauds and
corruptions in use resources are apparent, people seek
assurance from the auditors for prudent use of public
resources. Government auditors are supposed to report
on the non-compliance with legislation in the exercise of
powers by the public authorities and the usefulness and
effectiveness in use of public resources.
The objectives of public-sector audit may differ
depending on the type of audit to be conducted i.e.
financial, compliance and performance. Traditionally,
SAIs have the primary role in preventing and detecting
corruption as the administrative authorities and/or an
September 2015
17
AUDITING
Auditing Standards
The International Organization of Supreme Audit
Institutions (INTOSAI), was founded in 1953 as an
umbrella organization of SAIs along with 34 SAIs.
At present, it has 192 full members and 5 associated
members. The INTOSAI is an autonomous, independent
and non-political organisation with special consultative
status with the Economic and Social Council (ECOSOC)
of the United Nations. It provides an institutionalised
framework for SAIs to promote development and transfer
of knowledge, improve government auditing worldwide
18
September 2015
AUDITING
Conclusion
Public sector auditing has been contributing to governance
system of countries through promoting accountability and
transparency. SAIs, as oversight agencies, have pivotal
role in highlighting the non-compliance and misconduct
of public funds and contributing for the stewardship public
resources. In view of the needs of time, the role of SAIs
which was originated as guardian of compliance with
laws and regulations should be transformed into partners
role to contribute in its their governance system. The
insight and foresight roles of SAIs should be enhanced.
SAIs should have envisaged visions and strategies for
streamlining the future audit policies and focus areas.
To address the concerns of the stakeholders and people
at large, SAIs should give attention in enhancing the
professional competency the auditors and adopting new
audit approaches and techniques.
September 2015
19
BANKING
20
September 2015
Introduction
of
Conservation Buffer
Capital
Introduction
of
Cyclical Buffer
Counter
Leverage Measurement
Rigorous
Credit
Management
Risk
BANKING
4.5
4.5
4.5
4.5
4.5
3.5
4.5
5.5
September 2015
21
BANKING
Liquidity Framework
Basel III has introduced liquidity framework for capital
maintenance for ensuring banking operation. Global
financial crisis taught a lesson that simply capital
regulation cannot protect bank on crisis. Liquidity and
solvency are important for smooth business operation.
Basel III has introduced two ratios for liquidity monitoring
and management:
Liquidity Coverage Ratio (LCR)
Net Stable Funding Ratio (NSFR)
Liquidity Coverage Ratio (LCR) is related with short term
management of liquid assets to protect on acute stress
in 30 days. The mechanism is to be started from 2015.
LCR is calculated dividing the Stock of High Quality
Liquid Assets by Total Net Cash Outflow over 30 days
period. LCR should be at least 100% to be sound bank on
liquidity maintenance for short period. If not, there will
be adjustments on capital measurements based upon the
regulatory standard.
22
September 2015
Leverage Ratio
BANKING
References:
1. Consultative
document
for
Basel
III
Implementation issued by Nepal Rastra Bank
2.
3.
September 2015
23
ECONOMY
Introduction
NPS is prudentially regulated
by the PFRDA and restriction
on fund withdrawal during
the accumulation phase to the
beneficiary, further the equity
exposure of fund is allowed at the
discretion of the beneficiary as
per their Period to retire basis for
additional investment return with
additional risk, this feature is not
incorporated by traditional EPF
(Employment Provident Fund)
and PPF (Public Provident
Fund).
24
September 2015
ECONOMY
2068/69
2069/70
2070/71
in Rs. '000
2071/72
2072/73
Social Security
9,905,263
24,268,499 33,879,811
Total
% increment
9,839,700
39.60%
18.36%
38.90%
19.68%
September 2015
25
ECONOMY
Legal infrastructure
Regulation
for
Retirement
Benefit
26
September 2015
References
1. 52nd Annual Audit Report of Auditor General of
Nepal 2071 (2015)
2. Consolidated Financial Statement of Government of
Nepal FY 2013-14
3. Pension Management Digdarshan published by
Pension Management Office of Nepal
4. Website of PFRDA of India, www.pfrda.org.in
5. Budget of Government of Nepal from FY 2068/69 to
2072/73
MANAGEMENT
Organizational Behavior
Almost Missing Module in Nepali Corporate
Business Basics
Definitely, business starts with
exploring unmet needs and several
basic activities. We can describe
them as six Cs of business,
September 2015
27
MANAGEMENT
they are:
1) Creating value by knowing unmet needs and delivery,
2) Communicating the created value to prospective
customer,
3) Converting them into paying customers,
4) Commitment to provide the promised quality,
5) Confirming cash inflows and
6) Crafting rich corporate culture.
Needless to say, business exists only with customers; it
is all about creating customer by delivery of satisfaction
along with product and service. Harvard scholar Dr.
Paul Graham reveals the secret of business in concise
way - Make something people want. Theres nothing
more valuable than an unmet need that is just becoming
fixable. If you find something broken that you can
fix for a lot of people, youve found a gold mine.
Understanding customers and delivering them in right
time, at preferred place, in desired form and with
relevant information not only transfers funds within the
firm, it ensures customers loyalty by creating space in
their mind and heart.
28
September 2015
Working with OB
OB is the unique field of study that systematically reviews
and applies the knowledge about how people (at individual
level, in group and in organization) and the groups act
within the organization-setting. It is unique in the sense that
it draws concepts and approaches from various disciplines
mainly from psychology, sociology, anthropology,
economics, political science and ergonomics.
MANAGEMENT
September 2015
29
MANAGEMENT
Conclusion
Reference
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sf] clGtd txsf] k/LIff pQL0f u/L, tflnd k|fKt u/]/ ;f] ;+:yfsf] ;b:otf k|fKt JolQmnfO{ rf6{8{ PsfpG6]G;L lzIffsf] cfwf/e"t tx
dWod tx (CAP II) sf] ;Dk"0f{ ljifo 5'6 x'g]5 . ljifo 5'6sf] ;'ljwf k|fKt ug{ of]Uo JolQmn] ;+:yfdf tf]lsP adf]lhdsf] 9fFrfdf lgj]bg
lbg'kg]{5 . o;/L lgj]bg k]z ubf{ lgDg adf]lhdsf sfuhftx?sf] k|dfl0ft k|ltlnkL ;+nUg ug'{kg]{ 5 .
ACCA UK
ACCA UK
ACCA UK
af6 clGtd txsf] k/LIff pQL0f{ u/]sf] k|df0fkq / nAwfkqsf] k|dfl0ft k|ltlnkL .
sf] ;b:otf k|fKt ug{ cfjZos tflnd ;DkGg u/]sf] k|df0fkq .
af6 hf/L ePsf] ;b:otf k|df0fkq .
txdf btf{ ug{ nfUg] z'Ns, cfj]bg z'Ns / ljifo 5'6 z'Ns afktsf] /sd a'emfO{ ;f]sf] /l;b ;+nUg ug'{kg]{ 5 .
sf] ljifo 5'6sf] ;'ljwf k|Kt u/]df To:tf] JolQmn] rf6{8{ PsfpG6]G;L lzIffsf] clGtd txCAP III df egf{ x'gsf] nflu lgodfjnLsf] lgod
# -#_ adf]lhd ;+:yfdf gfd btf{ u/fpg' kg]{5 . CAP III df egf{ ePsf JolQmnfO{ # aif{sf] k+lhs[t k|lzIf0f tyf rf6{8{ PsfpG6]G;L lzIff cWoog ;DaGwL
P]g tyf lgodsf cGo ;Dk"0f{x? nfu' x'g]5g\ .
30
September 2015
TAXATION
Poush
Magh
Fagun
Total
50
52
49
53
204
1,25,000.00
1,12,500.00
1,02,655.00
1,16,253.00
4,56,408.00
VAT @13%
16,250.00
14,625.00
13,345.15
15,112.89
59,333.04
Penalty
16,250.00
14,625.00
13,345.15
15,112.89
59,333.04
32,500.00
29,250.00
26,690.30
30,225.78
1,18,666.08
7,441.00
2,299.00
4,903.00
5,247.00
19,890.00
Mangsir
September 2015
31
TAXATION
32
September 2015
TAXATION
We can not say the duty meal supply which are as per the
contract between employees and employer as per Labour
Act, 2048 too can not be treated as business expenses. Its
standard practice that the expenses which are incurred for
conducting of business and for generating the revenue of
the business are to be treated as business expenses but not
in any case to be treated as personal/domestic expenses.
We may further analyse through case study based on the
decision of Revenue Tribunal in Narayani Hotel Private
Limited.
Decision Number: 119 Year: 2063 :Revenue Tribunal
Kathmandu:
The hotel has provided duty meal supply to hotel staffs
as per Labour Act, 2048 and employment terms and
condition. The hotel has claimed input tax credit but
the tax officer disallowed expenses and input tax credit
thereon. The Revenue Tribunal has given the decision in
favour of the assessee i.e. Narayani Hotel Private Limited
citing that if the taxpayer has supplied staffs duty meal
as per appointment terms and condition and Labour Act,
2048 which is totally related to business expenditures
September 2015
33
Other
34
September 2015
Other
September 2015
35
Other
36
September 2015
Other
Way Forward
Growing in red tape area is very tough. If it is an arrange
marriage , she shall make her parents to convey that she
is working woman and will not be able to serve family
full time. Sometimes she needs to work in home or study
whole night, she cannot wake up at 5 am to make tea
for others. If its affair marriage, then she should clearly
September 2015
37
Other
tell her man that she wishes to be part of family not the
free-maid. If a woman is not helping herself to get out
that black hole, then nobody in this earth can rescue her
from that cage. If there is fuss in every day, then it will
not allow her to concentrate in her work or study. If the
situation get worse after having kids or after few years
of marriage, then discuss it openly. Change is painful,
legally partition invites many bitter talks and blame
game; but peace and progress demands some pain, ask
for some concrete decisions. Drastic times definitely calls
for drastic measures.
If the family is okay with having full time domestic
help, full time care taker for toddlers and she spending
time with babies, husband after office time ; then is will
be blessing for her. If the show runs smoothly without
cunning minds and jealousy, then home is heaven.
38
September 2015
Woes
In the race of success and happiness, many people forget
that life is too short to run only. Particularly woman keep
herself too busy in home and children that she hardly
realize that beside family and career, there is her own life
also.
In the nuts and bolts of living, she forgets to see herself
in mirror. It is hard to remember that when the last time
she became wild enough to drunk hard was, laughed
loud and danced till last beat. Ladies also love to lazing
around sometimes doing nothing, they also have hobbies
of badminton or painting or travelling or may be just
chilling out with old friends.
Way Forward:
It is said that some people stop living at age of 30 (dyeing
internally) and waits next 50 years for funeral. Woman,
she should not also wait till retirement to visualize life
and start living with vigor body, mind and spirit. Have
hobbies; plan to manage time for your soul to smile.
Plan dinner date/movie date with husband and keep your
relation romantic. Gift some stuffs to in-laws which
will make you feel connected. Spend time with your
children, involve them in household works & encourage
opinion sharing. You can plan 2-3 days short trip with
your buddies to travel new place and talking endlessly
about college days and all those silly phase you have been
through. Or simply you can plan spa/sauna or parlor time
together with your friends to share things. By this way
your beauty will be enhancing along with lighter hearts.
Successful career and happy family at win-win condition
may be keeping her too busy thought-out life, but no
lady to wait till age of 45-50 to start jogging or Yoga
or meditation. Anger management, self-control and
self-motivation will be much easier with these ancient
techniques. Regular exercise and meditation make
healthy body, healthier mind. Any hobby or foreign tour
or any nature walk or any quiet breeze can cherish the
Other
September 2015
39
Other
Compiled By:
The Minister of Finance tabled the budget of government of Nepal for fiscal year 2072-73 (2015/56) before the Legislature
- Parliament on 14 July 2015. The Finance Act has made changes in tax laws whichis a regular process of reform in
tax system. The Finance Act becomes subject of discussion among stakeholders, especially taxpayers, collectors, tax
consultants etc. The noticeable change is thethreshold for the registration of Value Added Tax, which was not reviewed
since the implementation of Value Added Tax, has been fixed to Rs.5 million by increasing the existing threshold of Rs.2
million is a major change in VAT. Attempts have been made to give overview of the changes made in the VAT legislation
for the use of stakeholders in the article.
Section/ Rules
Provisions
1. Compulsory Registration
Rule 7(1)
In case any person has reason to presume that his annual transaction shall exceed Rupees five
million, he shall submit an application setting out such conditions, to the concerned tax officer in
the format set out in Schedule 1 for registration of the transaction.
Rule 7(2)
In absence of conditions where such presumption referred to in sub-Rule 1 of Rule 7 could not
be made and if the taxable transaction exceeds Rupees Five million, the person carrying out
such transactions shall submit an application to the concerned tax officer in the format set out in
Schedule 1 for registration within 30 days of the date on which such excess occurs.
Rule 7(5)
Notwithstanding anything mentioned in the Rules, if following transactions occurs for the
purpose of taxable goods or services by any person, such transaction shall have to be registered
in the tax office.
(Ka) At the time of the inspection by a tax officer the stock of the taxable goods exceeds the limit
prescribed IRD based on the nature of the goods
(Kha) In case a person's telephone expenses and house rent exceeds Rs. 100,000 during a year, or
(Ga) In case the business place of a person is situated in any market specified by IRD or it has
occupied an area exceeding as specified by IRD for different road areas.
The provisions of Rule 7(5) (Kha) and Rule (5) (Ga) has been deleted.
40
September 2015
Other
Notwithstanding anything contained in the act, an exemption may be provided to a small vendor,
having a prescribed annual taxable transaction threshold, from the requirements of registration
and filing of tax returns and from such requirements as may be prescribed.
However, small vendor dealing in taxable goods, except those submitting estimated income return
as per Section 4(4) of the income tax act 2058, may voluntarily get his transaction registered upon
completing the process as referred to in Section 10.
Section 10(2)
In case a person engaged in any goods which is declared as taxable (previously it was not taxable), or a
person has conducted transaction after producing bricks, or a person who has conducted their business
in a metropolis, sub-metropolis or municipality or area specified by the department, and is dealing
in hardware, sanitary, furniture, fixture, furnishing, automobiles, motor parts, electronics, marble,
educational consultancy, discotheque, health club, catering service, party palace business, parking
service, machine used dry cleaners, restaurant with bar and color lab shall have to apply for registration
in the prescribed format within 30 days of the declaration as taxable or engagement in such services.
The provision of Section 10(2) has been deleted.
4. Cancellation of Registration
Section 11(1ka)
In circumstances other than those mentioned in sub-Section (1) of Section 11, any person
carrying out small transactions who has got his transactions registered voluntarily shall not be
entitled to cancel such registration of his transactions voluntarily until completion of one year
from the date of registration of the transaction. A person carrying out a small transaction who
intends to get registration of such transactions to be canceled after completion of one year from
the date of registration of the transaction may file an application as prescribed to the concerned
tax officer for cancellation of registration. If such an application is so filed, the concerned tax
officer shall cancel registration of such transaction.
Section 11(1ka)
September 2015
41
Other
Section 11(1kha)
Section 11(1ga)
In case of registered Tax payers having taxable transactions less than the limit specified at the
time of application of this sub Section, remaining tax credit paid at the time of purchase and
import, tax credit for stock and registration cancellation shall be as specified.
7. Meaning of Supply
Section 2(Chha)
Industry exporting at least 40% of total sales during the last 12 months of its operation may
avail the facility of bank guarantee on import of raw materials required for export of the
finished goods and goods to be imported for tax free shop through bonded warehouse subject
to following condition;
The industry has to export the goods for the price which is at least 10% value addition above
the consumed value of the raw material.
The person availing the facility under this Section is not allowed to take the facility of Section
24(4).
This provision of Section 8ka (5) has been deleted.
9. VAT Accounts
As per Rule 25, a tax officer may certify the purchase and sales register when:
a. a taxpayer submits an application to the office for the certification,
b. during the period of tax inspection or audit, or
c. at the time of inspection
The following provision has been inserted
In case of tax payers who have taken approval for issuing invoices from the computerized system, if sales book is
updated electronically, then sales book need not to be certified.
42
September 2015
Other
10. Penalty on not Keeping Purchase & Sales Book by Unregistered Person.
The following provision has been inserted.
Section 29 (Chha2) If Tax payers have used software for the purposes of computerized billing, whether approval
taken or not, on which data can be erased or modified, then Rupees Five Hundred Thousand.
Section 29 (1kha)
While stocktaking of the tax payers, if excess quantity is found in stock from what is stated
in purchase book, then the tax officer shall ask the tax payer to take into account such excess
quantity and fifty percent of the market value of such goods shall be levied as fine.
11. Definitions
Section 2(Ng)
September 2015
43
News
Paper Presenter
Chairperson
Commentator
CA. Kaushlendra
Kumar Singh, Past
President, ICAN
CA. Madhu
Bir Pande, Past
President, ICAN
2. Overview of Nepal
Auditing Standards
based on ISA Clarity
Project and recently
pronounced by ICAN
CA. Mahesh
Kumar Guragain,
Past President,
ICAN
3. Panel Discussion
on the Impact of
Earthquake on
Nepalese Economy
Panel Dignitaries
1) CA. Anal Raj Bhattarai, Banking and Financial Sector
2) Mr. Yogendra Shakya, Chairperson, ACE Hotel & Resorts
3) CA. Ashish Garg, Housing and Real Estate Sector
4) Mr. Nawaraj Bhandari, Seceratory, MOF, Policy reforms
Initiatives for Resource Mobilization, Operation and
Management of Reconstruction and Re-habitation
The Moderator of the session was ICAN President
CA. Narendra Bhattarai.
44
September 2015
News
Winner
Runner Up
Banking Sector
(Private and
Public)
Standard Chartered
Bank (Nepal) Limited.
Financial Sector
(Development
Banks and
Finance
Companies)
Insurance Sector
Narayani National
Finance Ltd.
Public Sector
Entities
General Sector
Employees Provident
Fund, Nepal.
Butwal Power
Company Ltd.
3
4
5
Nepal Doorsanchar
Co. Ltd
September 2015
45
News
46
September 2015
News
Name of the
Committee
Name of the
Committee
Editorial Committee
Fiscal and
Taxation
Committee
Education Committee
Monitoring
Committee
RA. Member
Capacity
Development
Committee
Ethics Committee
Recruitment
Committee
Building
Committee
Continuing Professional
Education Committee
Committee for
Members in Industry
Accounting
Technician Board
NFRS(Excluding Banks
and Insurance), NSA and
NPSAS Implementation
Committee
Career Counseling
Committee
Peer Review
Board
Audit Committee
Research and
Development
Committee
Contemporary
Issue Discussion
Committee
Scholarship Selection
Committee
Committee for
Implementation of
NFRS -Bank
Committee
for NPOs and
Cooperatives
Expert Advisory
Committee
Committee for
Implementation of
NFRS -Insurance
ICAN Advisory
Committee
Informational Technology
Committee
Law Reform
Committee
September 2015
47
News
Member News
Membership, Certificate of Practice
and Audit Firm
Following is the total number of Membership, Certificate
of Practice and Auditing Firms and the renewal status till
end of September 2015 (Aswin 13, 2072).
Category/
Class
Membership
COP
Total
No
Renewal
No
FCA/CA
875
490
671
293
583
294
RA- B
3375
1721
3139
1289
1591
1292
RA-C
1607
768
1475
641
805
642
RA -D
2285
1137
2093
1010
1145
1003
Total
8142
4116
7378
3233
4124
3231
48
Total
No
Firm
Renewal
Renewal
Total No
No
No
September 2015
Student News
CAP I, CAP II, CAP III and Membership
Examination Result Published
The Institute of Chartered Accountants of Nepal published
the result of CAP I level of June examination 2015 on
14 August 2015. According to the result 295 out of 446
students were declared pass in the CAP I level.
Similarly, the result of CAP II, CAP III and membership
examination were published on 15 September, 2015.
According to the result 82 students of CAP II Level
are eligible to join CAP III and 36 students of CAP
III level are eligible to get membership of the Institute
after completing the necessary requirement other than
examination. Similarly, 40 foreign CA degree holders
were qualified for the membership of ICAN.
Examination was conducted on month of July due to the
devastating earthquake of April and May 2015.
A detail of result is given below.
S.
No Level
1 CAP I
2
3
4
270
37
149
35
232
80
150
20
633
29
147
7
295
1135
146
446
62
258
40
News
Announcement of Scholarship
The Institute announces the application for the scholarship
of different levels on 2072.05.24. Institute is providing
the scholarship to the deserving, deprived and capable
student to motivate to study Chartered Accountancy. The
Institute is providing scholarship to the students every
year.
International Participation
SAFA Board, Committe and SAFA Summit
A five members delegation team with leadership of
ICAN President CA. Prakash Lamsal attended 40th SAFA
Board Meeting, various Committee Meetings and ICMA
Management Accounting Summit on Business Resilience
through Integrated Reporting in Colombo, Sri Lanka
from 26th to 29 July.
September 2015
49
Notice
Transaction
Amount Rs.
Above 50 Billion
Above 10 Billion
Above 5 Billion
Above 1 Billion
Above 60 Crores
Above 15 Crores
Rs. 10,000
Rs. 15,000
Rs. 20,000
Above 2 Crores
50
September 2015
20,00,000
10,00,000
5,00,000
3,00,000
200000
Minimum fee of listed
company shall be
applicable
Minimum fee of listed
company shall be
applicable
Minimum Fee of
Private Company
and other institutions
established as per
prevailing law Rs.
15,00,000
8,00,000
4,00,000
250000
150000
100000
40000
Minimum Audit
Fee of Other
Listed and Public
Institutions Rs.
Notice
Above 50 Crore
5,00,000
Above 20 Crore
2,00,000
Above 1 crore
100000
Above 5 million
50,000
1,00,000
1,50,000
5,00,000
10,00,000
Revised Fee
per day Rs.
4,000/-
10,000/-
3000/-
7500/-
1500/-
5000/-
1000/-
3000/-
Prevailing Fee
per day Rs.
3000
2500
Revised Fee
per day Rs.
3000
3000
1500
September 2015
51
Notice
52
September 2015
Notice
As per the decision of 197th Council meeting, the following Nepal Standards on
Auditing revised and drafted based on IAASB hand book 2012 edition, are
applicable voluntarily from 1st Sharwan 2072 & Mandatory from 1st Sharwan 2073.
Standards
NSQC1
Nepal Standard on Quality Control (NSQC) 1 : Quality Control For Firms that Perform
Audits and Reviews Of Financial Statements, and Other Assurance and Related Services
Engagements
NSA 200
Overall Objective of the Independent Auditor and the conduct of an Audit in Accordance
with Nepal Standards on Auditing
NSA 210
NSA 220
NSA 230
Audit Documentation
NSA 240
NSA 250
NSA 260
NSA 265
NSA 300
10
NSA
315(Revised)
11
NSA 320
12
NSA 330
13
NSA 402
Identifying and Assessing the Risks of Material Misstatement through Understanding the
Entity and Its Environment
September 2015
53
Notice
14
NSA 450
NSA 500
Audit Evidence
16
NSA 501
17
NSA 505
External Confirmations
18
NSA 510
19
NSA 520
Analytical Procedures
20
NSA 530
Audit Sampling
21
NSA 540
Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related
Disclosures
22
NSA 550
Related Parties
23
NSA 560
Subsequent Events
24
NSA 570
Going Concern
25
NSA 580
Written Representations
NSA 600
27
NSA
610(Revised)
28
NSA 620
NSA 700
30
NSA 705
31
NSA 706
Emphasis of Matter Paragraphs and other Matter Paragraphs in the Independent Auditors
Report
32
NSA 710
33
NSA 720
54
September 2015
Notice
34
NSA 800
35
NSA 805
36
NSA 810
NAPN 1000
NSRE 2400
39
NSRE 2410
NSAE 3000
NSAE 3400
42
NSAE 3402
43
NSAE 3410
44
NSAE 3420
RELATED SERVICES
4000-4699 NEPAL STANDARDS ON RELATED SERVICES (NSRSs)
45
NSRS 4400
46
NSRSs
4410(Revised)
September 2015
55
Activities
56
September 2015