Auditors to report on internal financial controls system from financial year commencing 01.04.2015

Sec­tion 143(3)(i) of the Com­pa­nies Act 2013 requires the audi­tors of the com­pa­nies to report as whether the com­pa­ny has ade­quate inter­nal finan­cial con­trols sys­tem in place and the oper­at­ing effec­tive­ness of such controls.

Now MCA has deferred the report­ing on inter­nal finan­cial con­trols sys­tem to Finan­cial year com­menc­ing from 01.04.2015 via Noti­fi­ca­tion Issued on 14.10.2014.

G.S.R……(E). — In exer­cise of pow­ers con­ferred by sub-sec­tions (1), (2) and (4) of sec­tion 139, sub-sec­tions (1) and (2) of sec­tion 140, sub-sec­tion (3) of sec­tion 141, sub-sec­tions (2), (3), (8) and (12) of sec­tion 143, sub-sec­tion (3) of sec­tion 148 read with sub-sec­tions (1) and (2) of sec­tion 469 of the Com­pa­nies Act, 2013 (18 of 2013), the Cen­tral Gov­ern­ment here­by makes the fol­low­ing rules to amend the Com­pa­nies (Audit and Audi­tors) Rules, 2014, namely:-

1. (1) These rules may be called the Com­pa­nies (Audit and Audi­tors) Amend­ment Rules, 2014.

(2) They shall come into force on the date of their pub­li­ca­tion in the Offi­cial Gazette.

2. In the Com­pa­nies (Audit and Audi­tors) Rules, 2014, after rule 10, the fol­low­ing shall be insert­ed, namely:-

“10A. For the pur­pos­es of clause (i) of sub-sec­tion (3) of sec­tion 143, for the finan­cial years com­menc­ing on or after 1st April, 2015, the report of the audi­tor shall state about exis­tence of ade­quate inter­nal finan­cial con­trols sys­tem and its oper­at­ing effec­tive­ness: Pro­vid­ed that audi­tor of a com­pa­ny may vol­un­tar­i­ly include the state­ment referred to in this rule for the finan­cial year com­menc­ing on or after 1st April, 2014 and end­ing on or before 31st March, 2015.”

Down­load the Notification