Sunday, 2 April 2017

Companies (Audit and Auditors) Amendment Rules, 2017

Ministry of Corporate Affairs vide its Notifications No. G.S.R. 307(E) dated 30th March, 2017 has made amendment in Companies (Audit and Auditors) Rules, 2014 to seek disclosure in the Auditors Report relating to the following:

whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.

Rule 11 of the Companies (Audit and Auditors) Rules, 2014 reads as follows:
11. Other Matters to be included in Auditors Report

The auditor’s report shall also include their views and comments on the following matters, namely:-

(a) whether the company has disclosed the impact, if any, of pending litigations on its financial position in its financial statement;

(b) whether the company has made provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts;

(c) whether there has been any delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

(d) whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.

As the amendment was notified on March 30, 2017, it seems it will effect all Auditors Report signed post this date more particularly the financial statements for
F.Y. 2016-17.



G.S.R. 307(E) text reads as follows:

G.S.R. 307(E).—In exercise of powers conferred by section 143 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 further to amend the Companies (Audit and Auditors) Rules, 2014, namely:— 1. (1) These rules may be called the Companies (Audit and Auditors) Amendment Rules, 2017. (2) They shall come into force on the date of their publication in the Official Gazette.

In the Companies (Audit and Auditors) Rules, 2014, in rule 11, after clause (c), the following clause shall be inserted, namely:—

“(d) whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.”.

Note : The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 246(E), dated the 31st March, 2014, subsequently amended vide G.S.R. 722(E), dated the 14th October, 2014 and vide G.S.R. 972(E), dated the 14th December, 2015.

Click here to view Notification No. G.S.R. 307(E) dated 30-03-2017
New Corporate Laws Treatise www.nclt.in . All rights reserved.

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