ICAI has issued the much awaited Guidance Note on Reporting on Fraud under Section 143(12) of the Companies Act, 2013.
The Guidance Note provides an overview of reporting requirement u/s 143(12). It also provides detailed guidance wrt various aspects of this reporting requirement like requirements for reporting u/s 143(12), responsibility of management, responsibility of auditor, Issues for consideration by the auditors, Applicability of Standards on Auditing, Audit procedures Technical guidance, Appendices etc.
Also, as you would be aware, the Companies (Amendment) Bill, 2014 that was passed by the Lok Sabha, envisaged bringing in, by way of Rules, certain materiality thresholds in respect of reporting under section 143(12). However, the Bill is awaiting clearance by the Rajya Sabha. Accordingly, the provisions of section 143(12) stand as originally contained in the Companies Act, 2013. In this background, though our Guidance Note brings out the aforesaid fact, the auditors’ guidance is based on these existing provisions only. As and when the aforesaid Bill is passed by the Rajya Sabha, we will review the Guidance Note and incorporate necessary guidance, if and where required.
The complete text of the Guidance Note is available on ICAI’s website www.icai.org and can be downloaded free of charge from the following URL: http://www.icai.org/post.