Background and Provisions of the Act
Certificate by a Chartered Accountant is to be issued with set of objects and intentions with an intent to express the professional opinion or state the facts based on the information, explanation, documents received from the promoter.
Proviso to Sec 4(2)(l)(D) of RERD Act having reference and requirement of CA Certificate – which is reproduced below –
2nd Proviso – Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project:
3rd Proviso – Provided also that the promoter shall get his accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilised for the project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project
Chartered Accountant Certificates under RERA
| Sl No | Certificate for | Act / Rule Ref | Certifying |
| 1 | On every withdrawal from project Bank Account | RERA Act –
2nd proviso to sec 4(2)(l)(D) |
Withdrawal of money from project bank account is in proportion to the % of completion of the project |
| 2 | Annual Audit under RERD Act | RERA Act –
3rd proviso to sec 4(2)(l)(D) |
1. Amounts collected from Allottees for a particular project have been utilised for the same project and
2. the withdrawal has been in compliance with the proportion to the % of completion of the project |
What is the understanding of statutory Auditor as per RERA
1. As per Sec 4(2)(l(D) proviso 3 mandates accounts shall be Audited by a Chartered Accountant in practice.
2. Act does not say whether Tax, Statutory or any other Chartered Accountant
3. However, Regulations / Notification issued by State RERA Authorities have mentioned on header of the format of certificate – Stating Statutory Auditor of the Promoter shall issue the Report
4. Question is Who is Statutory Auditor?
5. Is any Act defining Statutory Auditor? Whether Co’s Act 2013 defines Statutory Auditor?
6. If we Consider Statutory Auditor means the Auditor as per Co’s Act 2013, if so, what about other than Co’s. Say Proprietor or Partnership or Housing Society?
7. Considering the all the above facts, i am of the opinion that Auditor appointed under any Statute can certify the Accounts under RERA (may be Auditor as per Sec 139 of the Co’s Act, Tax Auditor, GST Auditor etc) as long as Chartered Accountant holding Certificate of Practice (not the employee of the promoter, who is on Role of the promoter)
8. RERA Regulators are differentiating the Chartered Accountant for issuance of periodical certificate for withdrawal of funds based on % of Completion method – hence Chartered Accountant issuing Certificate for withdrawal of funds shall be different for Issuance of RERA Audit Report under Proviso 3 to Sec 4 (2)(l)(D) of the RERA
Objective of RERA Audit Certificate by a CA –
| 1. Amounts collected from Allottees for a particular project have been utilised for the same project and
2. the withdrawal has been in compliance with the proportion to the % of completion of the project |
Note –
- Currently, the regulators in most of the states have prescribed format.
- This certificate shall be issued by a CA holding COP
- CA to collect project financial information from the promoter.
- Collect estimated cost of project, escalation if any and details there on
- CA to collect and consider all professional certificates issued from time to time for withdrawal of project.
This certificate shall be submitted to authorities and is a public document. It could be made available for viewing at the portal of the regulators in the respective states. The comments in this note are purely a matter of interpretation and not binding on any regulatory authorities. Therefore, there can be no assurance that the regulatory authorities will not take a position contrary to our comments or views
Author Bio
CAN WE SIGN ANNUAL AUDIT REPORT IF WE HAVE SIGNED PERIODICAL CERTIFICATES UNDER RERA ACT.