The Institute of Chartered Accountants of India

1 Section 197(16) of the Companies Act, 2013 requires as under:

‘The auditor of the company shall, in his report under section 143, make a statement as to whether the remuneration paid by the company to its directors is in accordance with the provisions of this section, whether remuneration paid to any director is in excess of the limit laid down under this section and give such other details as may be prescribed.’

2    The aforesaid reporting requirement for auditors of public companies needs to be covered in auditor’s report under the Section “Report on Other Legal and Regulatory Requirements”. Accordingly, auditors of public companies are advised to comply with the aforesaid reporting requirements in their auditor’s reports.

3    This Advisory will come into force from immediate effect.

Chairman
Auditing and Assurance Standards Board

Vice-Chairman
Auditing and Assurance Standards Board

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