LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Fraud reporting to government(mca)

nitika aggarwal (5 Points)

04 August 2016

Is there any responsibility of management of a listed company for reporting to government(MCA) regarding fraud??

Reply
Follow
Share

1 Replies

Shreesh Kumar (CA Final) (122 Points)
Replied 04 August 2016

Dear Nitika,

As per SA 240 “The Auditor Responsibilities relating to Fraud in an Audit of Financial Statement”

Responsibility of the Management and Those Charged With Governance is prevention and detection of fraud. They should place strong emphasis fraud prevention. This also includes a commitment to creating a culture of honesty and ethical behavior.

If any fraud is detected by Management or TCWG firstly they are responsible to make good of that fraud. They are also responsible to help the Statutory Auditor in fraud detection. However they are not responsible to report this to MCA by themselves. They can take this matter in the Knowledge of Auditor who will then consider the materiality and intention of the fraud and accordingly Qualify the report.

Regards

Shreesh Kumar