The financial year in India is from the 1st of April to 31st March every year. Hence, 31st march or say the end of a financial year is an important time for every business owner, employee, and every other person who has financial obligations to fulfill.
A Chartered Accountant(CA) plays a vital role at the end of every financial year.
Every time a financial year ends, there are several major responsibilities related to finance and taxation that every person needs to fulfill.
To fulfill those, a Chartered accountant helps people with their financial and tax advisory to improve their financial position, profits and reduce the tax liabilities.
The Role Or Functions A CA Plays At The End Of Every Financial Year Are:
Maintenance and Closing the books of accounts:
A Chartered Accountant keeps a systematic record of all day to day transactions in a systematic manner that occurs in a financial year. As the financial year ends, the main role of a CA is to manage and properly close the books of accounts for that year.
By closing books of accounts, the CA prepares a balance sheet to calculate the net profit and loss and the financial position of an entity for an accounting period.
Performing statutory and internal audit:
At the end of every financial year, a CA performs a statutory and internal audit. Under the statutory audit, he/she audits the books of entities to ensure that entities prepare all financial statements with standards, accounting principles and legal considerations and all statements are true and fair in nature.
On the other hand, Internal audit relates to ensuring that all the accounting transactions and activities are in accordance with the accounting policies.
Ascertain The Profit & Financial Position:
A Chartered Accountant, by auditing and closing the books of accounts, calculates the financial position and net profit of an entity on a specific date. But calculating the net profit and financial position, it becomes easy to calculate and reduce the tax and other financial liabilities. The ascertainment of financial position at the end of every financial year also helps in making financial and investment decisions.
Another very important role a Chartered accountant plays at the end of a financial year is providing all major taxation services to their clients. The tax services include-
- Planning and saving Tax in advance.
- Filing tax and tax returns.
- Prepare representations for tax authorities.
- Maintenance of tax records.
- Providing consultancy on tax and financial matters.
- Investment planning to reduce tax liabilities.
With these services, a Chartered Accountant helps its clients in managing and reducing the tax liabilities and increasing net profit in hand.
Facilitate Decision Making:
At the end of every financial year, there are tons of decisions to be made related to growth, market, sales, production, finances, taxes and so on.
When it comes to the money part where cost, profit, margins, taxes, liabilities play a major role; the decision making or say “correct financial decision making” becomes very important.
A Chartered Accountant, through his/her experience in finance, economy, accounts and other important fields facilitates and helps their clients in proper decision making.
At the end of every financial year, the Chartered accountants have the main task of preparing budgets. According to the resulting financial position, the profit earned in the year, and the expenses; CA prepares a budget for the upcoming year.
A budget is used to prepare to compare the actual results with expected and find variations if any. The role of CA is very important in budgeting.
A Chartered Accountant is the most important support for any business and taxpayer during and at the end of every financial year.