Announcement*
Applicability of the provisions of Section 143(3)(i) of the Companies Act 2013 and the related Rules
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.
The
Council of the Institute of Chartered Accountants of India, at its adjourned
333rd meeting held on 18th June 2014, considered the issue of applicability of
the provisions of sections 143(3)(i) of the Companies Act 2013 and the related
Rules to the audits of the periods beginning on or before 31st March 2014.
The
Council noted that the sections 143(3)(i) had come into force in respect of
financial years beginning on or after 1st April 2014. The Council was of the
view that the provisions of sections 143(3)(i) of the Companies Act 2013
applied to the auditors appointed under the Companies Act 2013 to audit the
financial statements for the year beginning on or after 1st April 2014. As a
corollary, 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. These would continue to be
done as per the requirements of the Companies Act 1956.
The
Council also decided that as a corollary, the provisions of section 143(3)(i)
of the Companies Act 2013 would apply to the audits of the financial year
beginning on or after 1st April 2014.
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*
This Announcement has been issued by the President, ICAI under the authority of
the Council of the Institute of Chartered Accountants of India.
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