Notes
The thinking, published weekly.
38 notes on risk, controls, cross-border transactions and tax. Written by CA Dheeraj Somani. Formerly The Audit Trail; the addresses are unchanged.
Featured · Governance & Controls Assurance · 6 Oct 2026
The numbers management relies on most are the numbers nobody audits.
Promoters run the business on the monthly MIS, not on the audited accounts. Assurance still works on last quarter's transactions. Where the two should meet: testing whether the MIS is true, using it to decide what to audit, and putting control health inside it.
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The MIS is the mirror of the business. Assurance should audit the mirror.
Promoters run the business on the monthly MIS. Controls assurance should test whether it is true, use it to pick what to audit, and put control health inside it.
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Buying property abroad under LRS: what is allowed, what it costs, where it gets stuck.
Up to USD 2,50,000 a year, no Indian loan, 20% TCS above Rs 10 lakh, and a destination country that may say no. The route, the cost and the reporting.
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Governance and controls assurance: what changes when a company lists.
Before listing, a control gap is a cost. After listing, it is a disclosure, a certificate, a committee minute and a share price. What changes for pre-IPO, SME-listed and main board companies.
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CCFS-2026 closes on 15 September. What to check before it does.
The window to clear an ROC filing backlog at a tenth of the additional fee shuts on 15 September. What it covers, what it saves, and the control that let the backlog build.
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Vendor risk: beyond the GSTR-2B reconciliation.
The 2B match tells you the vendor exists on the portal. Continuity, compliance, information and integrity risk need their own tests.
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Fraud risk in a digital-payments business: what continuous monitoring catches.
When money moves in thousands of small transactions a day, sampling fails. The patterns, the population tests, and how to report them.
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Cyber risk for companies that are not in IT.
A manufacturer is not a technology company. Its bank, ERP and email provider disagree. Eight controls assurance should test every year.
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Auditing AI: what to ask before the business deploys it.
AI tools are inside payables, credit and HR already. The questions controls assurance should ask before, during and after deployment.
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What audit committees are asking of assurance in 2026.
Why the committee changed, where its questions come from in s.177 and the LODR, and the six questions to walk in ready for.
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Building a data-led in-house assurance team without hiring a data scientist.
For CFOs and heads of internal audit: the five skills that matter, how to build them in a team of two to six, and what to stop doing.
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The RBI FCNR "leverage" scheme: why the real number is 14%, not 27%.
Influencers say 20 to 27%. Only SBI is live, the real return is about 14% before tax, and US residents keep even less.
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Viksit Gujarat Industrial Policy 2026: a promoter's guide to eligibility and incentives.
Who qualifies, how much of your capex comes back, and the decisions to settle before you commit.
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Governance and controls assurance in India: a 2026 guide for promoters & audit committees.
What an assurance review is, why it matters, what a good assurance function looks like, and how to brief your auditor.
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Assurance, reframed.
Five years that changed how an audit committee should brief its assurance provider.
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IFC testing in India: what design effectiveness actually looks like.
A practical note on Internal Financial Controls testing - design vs operating effectiveness, sample sizes, common gaps.
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How to scope controls assurance for a mid-sized manufacturer.
The risk-universe exercise, calendar planning, data extracts. A real scoping memo, walked through.
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Reports promoters actually read: a structure that works.
Why short reports beat long ones. The one-page executive summary, observation to root cause to recommendation, in a fixed grammar.
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Data analytics in controls assurance: replacing sampling with full populations.
When and how to run analytics on the full GL, vendor master, employee master. Tooling-agnostic, evidence-led.
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The audit committee calendar: what to ask your assurance team, when.
A 12-month calendar for an audit committee chair. What to expect quarterly, what red flags to push back on.
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Financial due diligence in India: a buyer's and seller's field guide.
The full FDD process, from buy-side QoE to sell-side packs to pre-IPO readiness. When you need each, and what to ask for.
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Quality of earnings in a 4-week buy-side review: our approach.
How we structure a QoE. Adjustments, non-recurring items, pro-forma EBITDA, evidencing.
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Vendor / sell-side due diligence: a primer for first-time sellers.
Why a vendor DD pack tightens negotiations, what it contains, and how it differs from buy-side.
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Working capital normalisation: how we compute the target.
The 12-month trailing average vs seasonality-adjusted methods, exclusions, deal-doc drafting.
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Net debt and debt-like items: what acquirers add back.
The deal-stage cheat sheet. What is debt, what is debt-like, what is a provision vs a reserve.
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Red-flag reports: the 5 issues we look for first.
Revenue cut-off, related-party leakage, capex vs opex, contingent liabilities, working-capital window-dressing.
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ODI filing in India: a practical guide (2026).
The post-2022 ODI framework: OPI vs ODI, reporting timelines, Form FC, RBI master directions, decoded.
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ECB structuring: the checklist before you raise.
Eligible borrowers, recognised lenders, all-in cost ceiling, hedging, end-use restrictions, conversion to equity.
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FDI in India: which sector caps actually bite in 2026.
Auto-route vs approval-route by sector, recent press notes, the common reporting traps.
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Compounding under FEMA: how to apply, what to expect.
When compounding is needed, the application, RBI's approach, typical penalties by contravention.
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DTAA application for foreign remittances: a decision tree.
Step-by-step. When does DTAA apply, MFN clause, beneficial ownership, TRC requirements.
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Transfer pricing under the Income Tax Act, 2025.
What's required, benchmarking studies, safe harbour thresholds, ALP issues to watch for.
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Withholding tax on software and SaaS payments: the live issues.
Royalty vs fees-for-technical-services, recent Supreme Court and ITAT positions, practical compliance.
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Taxation of non-residents: NRO, NRE, FCNR demystified.
What income is taxable in India, repatriation, surcharge and cess, common NRI planning mistakes.
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GST health check: 7 most-missed input tax credits in manufacturing.
The seven ITC categories we keep finding unclaimed in factory-floor companies. Anonymised examples and how to claim.
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Input tax credit on construction services: the open questions.
Section 17(5) blocked credits, the Safari Retreats fallout, what's still being litigated.
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E-invoicing in 2026: turnover triggers and practical issues.
Current thresholds, IRN flow, B2C QR code, common error codes and how to fix them.
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Related-party transactions: documenting audit committee approval.
Section 188, the audit-committee approval matrix, omnibus approvals, disclosure templates that work.
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CSR rules: what changed in 2026.
Latest amendments, computation, unspent CSR account, common reporting errors.