1. Changes in Companies (Audit and Auditors) Rule 2014: –
The auditor’s report shall also include their views and comments on the following matters:
> Whether the management has represented that, other than as disclosed in the notes to accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kinds of funds) by the company to or in any other person or entity, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
> Whether the management has represented that, other than as disclosed in the notes to accounts, no funds have been received by the company from any person or entity, including foreign entities (“Funding parties”), with the understanding, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
> Is there anything came to the notice of auditor that has caused them to believe that the above two representations have material mis-statement.
> Dividend declared or paid during the year by the company is in compliance u/s 123 of Companies Act, 2013
> Whether the company has used such accounting software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year and such feature has not been tampered with and trail has been preserved by company as per statutory requirement.
2. Changes in Companies (Accounts) Rule, 2014: –
> Following matters to be included in the Board’s Report:
a. Details of application made or any proceeding pending under the Insolvency and Bankruptcy code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year
b. Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.
> It has been made mandatory for use of such accounting software which has extra feature of recording Audit Trail of each transaction, creating an edit log of each change made in books of accounts along with date when such changes were made and ensuring that the Audit trail cannot be disabled.
(Please note that this provision has been deferred till 1st April 2022)
Source:
Companies (Audit and Auditors) Amendment Rule, 2021
Companies (Accounts) Amendment Rule, 2021
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Compiled by: Mr. Vivek Barnwal & Mr. Utkarsh Mehta
Disclaimer: We have highlighted our understanding for some of the important amendment. This document does not contain any expert view or opinion. Please refer source documents for detailed information. We request readers to seek professional advice before arriving at any decision / conclusion after reading of this document. We are not responsible for any loss arising to anyone after referring and relying on this document.
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