Saturday, January 16, 2016

Rules eased: auditors need to report to Centre corporate frauds of over Rs. 1 crore

Statutory auditors will now have to mandatorily report to the Centre all corporate frauds amounting to 1 crore or above. By specifying a threshold of 1 crore, the Ministry of Corporate Affairs (MCA) has now done away with the requirement to report immaterial frauds to the Centre.

  • The auditor must first report the fraud to the company’s audit panel
  • The audit panel will have to give its views in 45 days
  • Within 15 days of that, the auditor will have to send his report to the Centre
  • Frauds amounting to less than Rs. 1 crore will need to be reported only to the company’s audit panel.

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