Internal financial control

Hello Sudhir,

Its a compliance of Stat auditor to see whether the company has complyed with internal audit requirement or whether internal audit has been carried out effectively.

Hence you need to go through the report and commnet on the same

Sudhir,

Let me summarize the Guidance Note and what it says with regard to your question.

Internal Financial Control has two components:

1. Internal Controls over Financial Reporting (ICOFR) This is applicable to all companies

2. Internal Financial Controls (IFC) - This is applicable, currently, only to listed companies.

Therefore, in your case ICOFR is applicable, since it is a private limited company. The Companies Act, 2013 requires two items in this regard:

a. Entity Level Controls

b. Process Level Controls.

As an auditor, you need to comment on both (a) and (b), with regard to existence, and adequacy of both.

Hope this helps.

You have to follow the audit report form prescribed in the guidance notes of the Internal Financial Control and report accordingly. As per the response provided by CA Kishore, you also need to address the basic ITGC control.