As you are aware, the Ministry of Corporate Affairs, on 26th March 2014 notified a majority of the remaining sections of the Companies Act 2013, including sections 139 to 148, relating to audits and auditors. The Act is stated to be effective from 1st April, 2014.
Queries are being raised by a number of members as to whether any auditor’s report of a company being signed on or after 01st April, 2014 would be in accordance with the requirements of section 143 of the Companies Act 2013.
In this context, it may be noted that the Ministry of Corporate Affairs (MCA) has, on 04th April 2014, vide its General Circular No. 08/2014,clarified that the financial statements (and documents required to be attached thereto), auditor’s report and Board’s report in respect of financial years that commenced earlier than 01st April, 2014 shall be governed by the relevant provisions/Schedules/rules of the Companies Act 1956.
Therefore, it is clear from MCA’s aforesaid General Circular that the auditor’s report of a company pertaining to any financial year commencing on or before 31st march 2014 , would be in accordance with the requirements of the Companies Act 1956 even if that financial year ends after 01st April 2014.For example, where the financial year of a company is 01st January 2014 to 31st December 2014, the statutory auditor’s report signed therefor would be in accordance with the requirements of the Companies Act, 1956.
As a corollary to MCA’s General Circular, it appears that the provisions of the 2013 Act would apply only to the financial years commencing on or after 01st April 2014.Thus, for example, the statutory auditor’s report signed in respect of the financial year of the company ended 31st March 2015 would need to be issued in accordance with the provisions of the Companies Act 2013.
(CA ABHIJIT BANDYOPADHYAY)
Chairman, Auditing & Assurance Standards Board