Government looking at criteria for fraud reporting by Auditors
PrintListen to this Article
The Corporate Affairs Ministry is looking at the possibility of having thresholds of the quantum of frauds at companies that need to be mandatorily reported by concerned auditors to the government.
In this regard, the government has sought suggestions from ICAI, the apex body for chartered accountants, Parliament was informed .
Under the Companies Act, 2013, auditors have the responsibility of reporting frauds, at entities being audited by them, according to the ministry.
"The Institute of Chartered Accountants of India (ICAI) has been asked to give its comments on the feasibility of having some criteria to determine the thresholds of the quantum of a fraud/suspected fraud for mandatory reporting to the government by the auditors," Minister of State for Corporate Affairs Nirmala Sitharaman said in a written reply to the Rajya Sabha.
She was responding to a query on whether the norms relating to communication of auditor's report to government in cases of irregularities, embezzlement was under review.
About various concerns of the stakeholders with certain provisions of the new companies law, Sitharaman said that the ministry had "issued suitable circulars, statutory orders and amendments in the rules to provide transitional time, remove doubts or practical difficulties".
She added that amendments in the Companies Act 2013 "will be considered" if such measures "prove inadequate".
To a query on whether independent directors would be held responsible for decisions taken by the company's board, the minister said: "Section 149(12) of the Act already grants protection to the independent directors from prosecution in matters which had not occurred with their knowledge, consent, connivance or where they had acted diligently".
To a separate question on funds utilised by firms towards Corporate Social Responsibility (CSR), Sitharaman said that the details of the same would be available only after September 2015.
"Details about the funds utilised by the companies under the CSR would be available to the Ministry of Corporate affairs only after the mandatory disclosures of CSR expenditure are made by companies, which would be due within six months after completion of financial a year 2014-15 that is September 2015," Sitharaman said. (PTI - Economic Times)
Category : Auditing | Comments : 0 | Hits : 834
In a boost to the National Financial Reporting Authority (NFRA), the regulator for auditors and audit firms dealing with large and listed companies, the Supreme Court has upheld an order by the National Company Law Appellate Tribunal (NCLAT) related to disciplinary action against errant auditors. Last month, the apex court dismissed an appeal filed by chartered accountant Sam Varghese, partner at K Varghese & Co. Varghese was one of the four auditors against whom NFRA had acted, and in...
Hindustan Unilever Ltd. has announced that its cost auditor has been disqualified from continuing amid a conflict of interest. The decision was made after it was discovered that Rasesh Vipin Chokshi, who is a partner at the firm R.A. & Co., was holding shares in the company. According to the Companies Act, 2013, a cost auditor cannot hold any shares in the company for which they're auditing the costs. Following this violation, M/S R.A. & Co. has been asked to vac...
The Bombay High Court has granted bail to Anita Kirdat, a former concurrent auditor of the Punjab and Maharashtra Cooperative (PMC) Bank, in connection with a multi-crore loan fraud case. Kirdat, 48, a chartered accountant (CA) from Bhandup, who runs a firm, Anita Kirdat and Company, was arrested by the Economic Offence Wing of Mumbai Police in 2019 in the PMC Bank scam. She served as the concurrent auditor of PMC Bank from 2005 to 2019. She was alleged to have been appointed at the behest...
Tighter regulations and lower fees are making the auditing profession challenging, said panelists at an international conference held by the National Financial Reporting Authority (NFRA) here on Tuesday. “The business model of pure audit is under significant pressure. It’s getting tighter and tighter from the point of avoiding conflict,” said Uday Kotak, former managing director and CEO of Kotak Mahindra Bank. Stating that regulators would want the best of talent in the audi...
The Comptroller and Auditor General of India (CAG), Girish Chandra Murmu, on Friday announced the setting up of the Supreme Audit Institution India’s International Centre for Audit of Local Governance (iCAL) in Rajkot, Gujarat. At the conclusion of the three-day international conference on ‘Strengthening of Grass Roots Democracy and Accountability’, Mr. Murmu said local governments played a pivotal role in shaping the lives of citizens. Effective accounting platforms and aud...
Comments