Tuesday, July 15, 2014

Fraud Reporting for Accounts of 2014-15 only

Section 143(12) of the Companies Act 2013 requires the auditors of the companies to report to the Central Government on the frauds committed or being committed against the company. The requirements of these sections and related Rules would not apply to audits of financial statements of the periods beginning on or before 31st March 2014, even if the audits therefor were actually carried out and auditor’s report thereon issued on or after 1st April 2014. The Council, accordingly, felt that prima facie, as a corollary, section 143(12) would become applicable only for financial year (and not for a period) 2014-2015 and on wards. The ICAI Council is, however, in the process of communicating with the Ministry of Corporate Affairs in this regard.

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