In this month’s call, we provided an overview on the requirements of the Companies Act, 2013 relating to reporting on fraud by the auditors and also discussed key requirements of the recently issued guidance note on Reporting on Fraud under section 143(12) of the Companies Act, 2013 by the Institute of Chartered Accountants of India (ICAI).
Section 143(12) of the Companies Act, 2013 requires an auditor of a company to report instances of an offence involving fraud that is being or has been committed against the company by officers or employees of the company, in the course of the performance of his duties as auditor, to the Central Government.
On 2 March 2015, the ICAI has issued a guidance note on Reporting on fraud under section 143(12) of the Companies Act, 2013.
The guidance note explains requirements of the section 143(12) of the Companies Act, 2013 and points out that auditors should comply with the Standards of Auditing (including SA 240, The Auditor’s Responsibilities relating to Frauds in An Audit of Financial Statements) while carrying out audits.
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