Reporting on Internal Financial Control u/s 143 (3) (i) of the Companies Act, 2013

Reporting on Internal Financial Control u/s 143 (3) (i) of the Companies Act, 2013 has been deferred for one year i.e., up to 01.04.2015 

CA. K. Raghu, President ICAI said , “I am happy to share that based on suggestions given by ICAI, Ministry of Corporate Affairs has amended Rules for Chapter 10 (Audit and Auditors) of the Companies Act, 2013 and Reporting on Internal Financial Control u/s 143 (3) (i) of the Companies Act, 2013 has been deferred for one year i.e., up to 31.03.2015. The auditor shall report on the existence of adequate internal financial control and its operational effectiveness for the financial years on or after 01.04.2015.The auditor may voluntarily report for the year from 01.04.2014 to 31.03.2015.

CA. K. Raghu, President ICAI added " ICAI has already approved the Guidance Note on reporting on internal financial controls by statutory auditors of companies. As the name suggests, this Guidance Note is for the statutory auditors. Post final issuance of Guidance Note, ICAI would also hold country-wide training programmes for the statutory auditors on the same." 

He further said "At this juncture, it may also be added that the deferment of reporting on internal financial controls by statutory auditors is perhaps more of a breather for the companies since presently in India we do not have any commonly accepted framework for internal financial controls to suit Indian business environment. In fact, whatever internal control frameworks have been developed and are in use abroad, like COSO, COCO, etc., are a result of considerable research over long periods of time. In this scenario, the Indian companies too would look up to the MCA to provide necessary guidance in this regard."