The document provides an overview of audit and accounts provisions under the Companies Act 2013 through a presentation. Key highlights include mandatory consolidation of financial statements, reopening of accounts only via court order, voluntary revision of statements, constitution of the National Financial Reporting Authority (NFRA) to regulate auditing standards and practices, and new requirements for auditor appointment, remuneration and duties. The presentation also covers financial statements, books of accounts, corporate social responsibility requirements and rights of members to access statements.

1. PRESENTATION
ON
AUDIT & ACCOUNTS
D R . S A N J I V A G A R W A L
J A I P U R
F C A , F C S
J U L Y 5 , 2 0 1 4
© D R . S A N J I V A G A R W A L
NATIONAL SEMINAR ONNATIONAL SEMINAR ON
COMPANIES ACT, 2013COMPANIES ACT, 2013

2. A Paradigm Shift For theA Paradigm Shift For the CorporatesCorporates

3. NATIONAL SEMINAR ON COMPANIESNATIONAL SEMINAR ON COMPANIES
ACT, 2013ACT, 2013
This Presentation covers –
• Accounts & Financial Statements
• Audit Provisions
• Auditors – Appointment /Rotation etc.
• National Financial Reporting Authority (NFRA)

4. Companies Act 2013:Companies Act 2013:
The Broader PerspectiveThe Broader Perspective
 At par with global practices
 Enhanced accountability on the part of companies.
 Vigil mechanism introduced
 Flexibility in accounting
 Audit accountability
 Compliance focused
 Enhanced monitoring, quality and regulatory
structure (NFRA)
 Innovative concepts – Audit rotation, re-opening,
auditing standards, experts, KMP.

5. ACCOUNTS OF COMPANIESACCOUNTS OF COMPANIES
[CHAPTER IX ][CHAPTER IX ]
Statutory Provisions
 Sec 128: Books of account, etc., to be kept by company. **
 Sec 129: Financial statements **
 Sec 130: Re-opening of accounts on Court's or Tribunal's orders.
***
 Sec 131: Voluntary revision of financial statements or Board’s
report.***
 Sec 132: Constitution of National Financial Reporting Authority.
***
 Sec 133: Central Government to prescribe accounting
standards.*

6. ACCOUNTS OF COMPANIESACCOUNTS OF COMPANIES
[CHAPTER IX ][CHAPTER IX ]
 Sec 134: Financial Statement, Board's report, etc. **
 Sec 135: Corporate Social Responsibility. **
 Sec 136: Right of member to copies of audited financial
statement. **
 Sec 137: Copy of financial statement to be filed with
Registrar. **
 Sec 138: Internal Audit.**
^The relevant rules are The Companies(Accounts) Rules,
2014
* This Section was notified from 12/09/2013.
** These Sections have come into effect from 01/04/2014
*** These Sections have not come into effect till date

7. First Time Entry inFirst Time Entry in
Companies Act,2013Companies Act,2013
 Financial year
 Key Managerial Personnel (KMP)
(MD/CEO/WTD/CS/CFO/Others)
 E-books
 Re-opening / Recasting of Accounts
 Voluntary revision of financial statements
 Internal audit
 Auditing Standards
 Secretarial Standards
 National Financial Reporting Authority

8. Accounts of Companies-Accounts of Companies-
Key HighlightsKey Highlights
 Books of Accounts to be kept in electronic mode
 Consolidated Financial Statements –
JVs/associates/subsidiaries
 Re-opening of accounts and voluntary revision of
financial statements or Board’s report
 Uniform Financial year

9. Books Of AccountsBooks Of Accounts
[Section 2(13)][Section 2(13)]
“Books of accounts” include records maintained in
respect of –
 all sum of money received and expended by a
company and matters in relation to which the
receipts and expenditure take place;
 all sales and purchases of goods and services by the
company;
 the assets and liabilities of the company; and
 the items of cost as may be prescribed under
Section 148 in the case of a company which
belongs to any class of companies specified under
that section.

10. Books of AccountsBooks of Accounts
[Section 128][Section 128]
q Corresponding old section : 209
• Almost similar requirement as that of the Act
• Cognizance to electronic mode of maintaining books of
accounts
• Scope of inspection of books and accounts within India and
outside has been enlarged
• Reduction in compliance requirement/costs with respect to
returns of branches- Returns required to be sent periodically

11. Books of Accounts [Rules 3 ,4]Books of Accounts [Rules 3 ,4]
• Proper system for storage, retrieval, display or printout of the electronic
records shall be ensured and the same shall remain complete , unaltered and
in a legible form(including branch records).
• Electronic mode –as defined in clause (t) of sub-section (1) of section 2 of the
Information Technology Act, 2000-data,record,images stored in electronic
form , micro film,micro fiche.
• Summarised returns of books of accounts of the company maintained outside
India shall be sent to registered office of the company at regular intervals as
may be decided, for inspection by directors.
 For any other financial information maintained outside India , director to
furnish written request himself and not through POA/representative
,alongwith reasons.
 Information to be provided to the director within 15 days

12. Financial Year [Section 2(41)]Financial Year [Section 2(41)]
 Definition of Financial year changed – ‘April to March’
Ø Lack of flexibility
Ø Increased cost of compliance
 Transition Period : 2 years from commencement of the Act
 Exception/ exemption :
Ø Holding/ subsidiary of a company incorporated outside India
and required to follow different financial year for consolidation
of financial statements outside India
Ø Tribunal’s approval required

13. Financial Statements [Section 129]Financial Statements [Section 129]
q Corresponding old section : 210,211,212
 Financial Statement is defined under Section 2 (40) to include -
Ø Balance Sheet
Ø Profit and Loss account or Income and Expenditure account
Ø Cash flow Statement
Ø Statement of change in equity, if applicable
Ø any explanatory notes annexed to or forming part of financial statements, giving
information required to be given and allowed to be given in the form of notes.
 For the financial statement with respect to one person company , small company and
dormant company, may not include the cash flow statement.
 Financial statements to be prepared for financial year and shall be in form as per
Schedule III.

14. RELEVANT RULESRELEVANT RULES
 Consolidation of financial statements to be done in
accordance with Accounting Standards , even if the holding
company is outside India.
 Format as per Schedule III to be followed.
 Consolidated financial statements now mandatory
for all classes of companies.
 Duplication of information: requirement to give summary
statement for all subsidiaries / associates / joint ventures
continues.

15. Important Points for ConsolidatedImportant Points for Consolidated
Financial StatementsFinancial Statements
 Preparation of consolidated financial statements by holding
company of its and its subsidiaries / associates / joint ventures is
compulsory
 Wherever applicable, consolidated financial statements are to be
laid before the Annual General Meeting.
 Company is also required to attach the accounts of its foreign
subsidiary which does not have place of business in India. (Section
137)
 Consolidated financial statements shall be prepared in the same
form and manner as that of its own and comply with Accounting
Standards.

16. Important Points for ConsolidatedImportant Points for Consolidated
Financial StatementsFinancial Statements
 A separate statement in prescribed form containing salient
features of financial statement of its subsidiaries required
to be attached along with its own financial statement.
 Subsidiary includes associate company and joint venture.
 Central Government empowered to exempt any company or
class of companies from such compliance .

17. Reopening / Recasting of Books ofReopening / Recasting of Books of
Accounts [Section 130]Accounts [Section 130]
 A company shall not re-open its books of accounts and shall not recast its
financial statements, unless an application in this regard is made by any one or
more of the following –
Ø the Central Government, or
Ø the Income-tax authorities, or
Ø the Securities and Exchange Board of India (SEBI), or
Ø any other statutory regulatory body or authority or any person concerned,
and
Ø an order in this regard is made by a court of competent jurisdiction or the
Tribunal.
• Court/Tribunal to give Notice.
 The re-opening and recasting of financial statements is permitted only for the
following reasons –
Ø the relevant earlier accounts were prepared in a fraudulent manner; or
Ø the affairs of the company were mismanaged during the relevant period,
casting a doubt on the reliability of financial statements.
 The accounts so revised or re-cast under this section shall be final.

18. Voluntary Revision of Financial Statements [SectionVoluntary Revision of Financial Statements [Section
131]131]
 Directors of a Company on their own may prepare revised financial
statements or a revised Board's Report in respect of any of the three
preceding financial years after obtaining approval of the Tribunal on an
application made by the Company in prescribed form and manner, if it
appears to them that –
Ø financial statements of the Company; or
Ø the Report of the Board,
Ø does not comply with the provisions of clause 129 related to financial
statements or clause 134 related to financial statements /Board’s
Report.

19. National Financial ReportingNational Financial Reporting
Authority (NFRA) [Section 132]Authority (NFRA) [Section 132]
qCorresponding old section : 210A
• Wide powers to NFRA
ØFormulation of AAS
ØMonitor/enforce compliance with AAS
ØOversee quality of service of professional
ØSuggest measures to improve quality of services
 Quasi-judicial powers to NFRA
 Severe action where professional misconduct is proved
 Yet to come into force.
 Constitution of NFRA-independent members

20. National Financial ReportingNational Financial Reporting
Authority (NFRA) [Section132]Authority (NFRA) [Section132]
• Quasi-judicial powers to NFRA
Ø Investigation
Ø Power as a civil court
Ø Power to impose penalty
• Appeal against NFRA order
Ø to appellate authority
Ø to be constituted by CG
• Severe action where professional misconduct is proved
• Penalty
Ø Individuals : 1 lac – 5 times of the fee
Ø Firm :10 lacs – 10 times fee
 Debarment from professional practice :6 months – 10 years

21. Central Government to prescribeCentral Government to prescribe
Accounting Standards [Section 133]Accounting Standards [Section 133]
qCorresponding old section : 211
 Central Government to prescribe standards of
accounting (AS)
 AS to be recommended by ICAI
 In consultation with / after examination to
recommendations made by NFRA
 Till AS are prescribed, existing AS under 1956 Act
shall continue to apply (General Circular No. 15
/2013 dated 13.09.2013)

22. Requirements as to Financial StatementsRequirements as to Financial Statements
[Section 134][Section 134]
q Corresponding old sections : 215,216,217
 Financial statement of the company including consolidated financial
statements, if applicable, should be approved by the Board of Directors,
before such statements are signed.
 Financial statement should be signed on behalf of the board by atleast
Chairperson of company, duly authorised by board, or
Ø two directors of whom one should be the Managing Director, and
 Chief Executive Officer, if he is director, chief financial officer and
company secretary, if any, in the company

23. RequirementsRequirements asas toto FinancialFinancial StatementsStatements
[Section134][Section134]
 Such sign is required for submission of financial statements to the auditor for
his report.
 One person company's financial statements shall be signed by only one
director.
 Auditors report is required to be attached to every financial statement
 Board report shall be attached to the statements laid before the company in
general meeting
 Signed copy of financial statements (including cash flow statement) shall be
issued / circulated
/ published alongwith copy of –
v notes to accounts forming part of financial statements
v auditor’s report thereon
v board's report

24. Financial Statements-Rule 8Financial Statements-Rule 8
 Matters to be included in Board Report:
ØBoard Report shall contain separate report on performance
and financial position of each subsidiary , associate and
joint ventures.
ØA statement of formal annual evaluation of Board’s report,
it’s committees and individual directors by every listed co.
and every other co. having paid up share capital of Rs. 25
crores or more at FY end.
ØOther detailed additional matters as specified in Rules.

25. CORPORATE SOCIAL RESPONSIBILITY :CORPORATE SOCIAL RESPONSIBILITY :
THE NEW GAME CHANGER[Sec 135]THE NEW GAME CHANGER[Sec 135]
 Provisions of CSR will be applicable to:
Øcompanies whose net worth is Rs. 500 crore or more OR
Øturnover of Rs. 1000 crore or more OR
Ønet profit of Rs. 5 crore or more
during any FY shall constitute a CSR Committee.
 Spend ,every year, at least 2% of average net profits of three
immediate preceding FYs.
• CSR Committee shall fomulate and recommend a CSR Policy
for activities to be undertaken as specified in Schedule VII and
expenditure to be incurred therein ; monitor CSR Policy.
• Content of CSR Policy to be disclosed in Board Report and
Company website.

26. Corporate Social ResponsibilityCorporate Social Responsibility
 “Net Profit “ means net profit of company as per
financial statements prepared in accordance with the
applicable provisions of the Act , but shall not
include the following :
Ø Any profit arising from overseas branch (es) of company ,
whether operated as a separate company or otherwise; and
Ø Any dividend received from other companies in India , which
are covered under and complying provisions of Section 135.
• Where net profit has been calculated as per
provisions of Companies Act,1956 , no need to
recalculate under this Act.
• Average Net Profit shall be calculated in accordance
with Section 198 of this Act.

27. Corporate SocialCorporate Social
ResponsibilityResponsibility
 Emphasis to local area where company operating.
Such activities only to be carried out in India.
 May collaborate with other companies.
 Programs for benefit of employees or their families
not included in CSR activities.
 Board Report to include annual report on CSR.

28. Right of members to copies of financialRight of members to copies of financial
statementsstatements
[Section 136][Section 136]
qCorresponding old section : 219
 Copies of financial statements including CFS, Auditors
report shall be sent to every member/trustee/debenture
holders 21 days before general meeting
 Every member allowed to inspect financial statements at
registered office during business hours
 Listed company to place its financial statements(including
CFS) on its website
 Copy of financial statements adopted in AGM to be filed
with ROC within 30 days of AGM.[Section 137]
ØClass of companies as specified by CG , shall file financial

29. Right of members to copies ofRight of members to copies of
financial statementsfinancial statements -RULES 10, 11-RULES 10, 11
 All listed companies and such public companies
having
v Net worth > one crore rupees and
v Turnover >ten crore rupees,
financial statements to be sent
v Electronically, to those who consented
v Physical through recognized mode of delivery as
specified under Section 20 of the Act, otherwise.
v Modes under Section 20 –courier, registered post,
speed post.

30. Internal Audit [Section 138]Internal Audit [Section 138]
 Not compulsory for all companies
 CA or CWA or other professional to conduct internal audit
 Appointment by Board of Directors
 Transition Period :6 Months
 Following companies to appoint internal auditor : Rule 13Rule 13
vListed companies
vUnlisted Public company whose
Ø paid up capital of 50 crores or more,or
Ø turnover of 100 crores or more,or
Ø O/s loans and borrowings from banks or public financial institutions
exceeding 100 crores or more, or
Ø O/s deposits of 25 crores or more;
vPrivate company whose :
Ø Turnover of 200 crores or more ,or
Ø O/s loans and borrowings from banks or public financial institutions
exceeding 100 crores or more in previous financial year

31. Audit & AuditorsAudit & Auditors
Chapter XChapter X
 Section 139: Appointment of auditors
 Section 140: Removal, resignation of auditor and giving of
special notice
 Section 141: Eligibility, Qualifications and Disqualifications of
auditors
 Section 142: Remuneration of Auditors
 Section 143 : Powers & Duties of auditors
 Section 144 : Auditor not to render certain services
 Section 145 : Auditors to sign audit reports etc.
 Section 146 : Auditors to attend General Meeting
 Section 147 : Punishment for contravention
 Section 148 :CG to specify audit of items of cost in respect of
certain companies
** The relevant Rules are The Companies (Audit and Auditors )
Rules,2014.

32. TYPES OF AUDITSTYPES OF AUDITS
COST AUDIT
INTERNAL AUDIT
STATUTORY AUDIT
SECRETARIAL AUDIT

33. Appointment of AuditorsAppointment of Auditors
[Section 139][Section 139]
qCorresponding old section : 224
• Auditors’ appointment for 5 years at AGM.
• But ratification at each AGM.
• Auditors to give certificate of qualifications
• If audit committee exists – all appointments based on
its recommendations

34. Rotation of AuditorsRotation of Auditors
[139(2)][139(2)]
• Compulsory rotation
• Transition period– to comply within three years from commencement of new Companies
Act
• Applicable to
Ø Listed companies
Ø Class/classes of companies as prescribed in rules
• Rotation rules not applicable to one-person companies and small companies
• Rotation criteria
Ø Individual – one term of five consecutive years
Ø Audit firm – two terms of five consecutive years
 Additional Conditions.
 In case of Government companies, CAG shall appoint an auditor
within 180 days from end of the Financial Year and direct such
auditor the manner in which accounts shall be audited.-Section
139(5)

35. Rotation of AuditorsRotation of Auditors
• Reappointment holiday/cool-off period
Ø Individual – five years from completion of term
Ø Audit firm – five years from completion of term
Ø Common partner(s) of audit firm – five years from completion of
term
• Audit ‘firm’ shall include LLP
 Restriction on common partner firms
Ø If no common partner but part of the same group/network
Ø No common partner – same address
Ø No common partner – but common relative as defined in section 6 of
the Companies Act 1956/section 2(77) of Companies Act, 2013

36. Auditors-Rules 3,4,5,6Auditors-Rules 3,4,5,6
• Audit Committee(ACB) and Board to take into consideration
qualifications and experience of proposed person for appointment of
auditor. Also to consider completed/pending proceedings before
ICAI/NFRA/Tribunal/any other court of law and recommend to
members in AGM for appointment.
• Members to appoint auditors to hold office from conclusion of that
meeting till conclusion of 6th AGM, counting current meeting as first
subject to ratification by members at every AGM.
• Period of office before commencement of the Act to be included for
calculating term of 5/10 years. [Rule 6(3)]
• Incoming auditor cannot operate under the same network /brand of
outgoing audit firm. [Rule 6(3)]
• In case of joint auditors, rotation to be in the manner where all joint
auditors do not complete their term in the same year.

37. Auditors-Rules 3,4,5,6Auditors-Rules 3,4,5,6
Rule 4
• Proposed appointee shall submit a certificate that:
ØHe is eligible for appointment
ØAppointment is within term of the Act
ØAppointment is within limit of the Act
ØList of proceedings pending on firm or any partner with
respect to professional matters of conduct , as disclosed in
certificate, are true and correct.
Rule 5
• Class of companies include (except OPC and Small Company)
Ø Unlisted public companies having paid up share capital >Rs.
10 crores
Ø Pvt. Ltd. Co having paid up capital >Rs. 20 Crores
Ø Below threshold limits as abovementioned, having public
borrowings from financial institutions , banks or public

38. Removal, Resignation of AuditorsRemoval, Resignation of Auditors
[Section140][Section140]
Corresponding old section : 225
• Rotation on term completion – no special notice to remove
• Removed auditors’ representation – not sent to members
• 5 years cooling period for auditors removed.
• Auditor also includes firm of auditors
Rules 10.5-10.6Rules 10.5-10.6
Section 140(1)
 For removal of auditor before expiry of his term:
Ø Application to Central Government
Ø Application to be filed within 30 days from date of passing of special resolution in AGM
Ø An auditor resigning from the company, shall file a statement in prescribed form.

39. Eligibility, Qualifications &Eligibility, Qualifications &
Disqualifications for AuditorsDisqualifications for Auditors
[Section 141][Section 141]
q Corresponding old section : 224 , 226
• Disqualification criteria
Ø Holding any security of company/subsidiary/holding/associate /
subsidiary of holding
Ø Relative - less than INR 1000
ØIndebted to same category of above companies prescribed amount
ØProvide guarantee/security to same category of companies –
prescribed amount
ØDirect/indirect business relationship with same category
of companies
ØRelative - director/employee director/KMP
ØCourt conviction on fraud in last 10 years
• Maximum no. of companies as auditor = 20

40. Removal/Disqualification- RulesRemoval/Disqualification- Rules
7,8,107,8,10
• Removal of Auditor before expiry of term – Rule 7
Ø Application to be made to CG within 30 days of resolution passed by the
Board.
Ø Co. to hold general meeting within 60 days of reciept of approval of
resolution passed by Board.
• Disqualifications – Rule 10
Ø Relative of auditor holding securities exceeding Rs. 1 Lakh
ØRelative/partner indebted to company/subsidiary/holding/associate
exceeding Rs. 5 Lakhs
ØRelative/partner has given guarantee of indebtness of any third person to
company/subsidiary/holding/associate exceeding Rs. 1 Lakh
Ø“Business relationship” =any transaction entered into for a commercial
purpose except those which are in the nature of professional services as
permitted to be rendered by an auditor or audit firm under the Act and
Chartered Accountant Act ,1949 and except those commercial

41. Remuneration to AuditorsRemuneration to Auditors
[Sec 142][Sec 142]
qCorresponding old section : 224
• To be fixed in AGM
• Can be determined in any other manner
• First auditor – BOD to decide
• Remuneration includes facility provided to auditor
• Remuneration excludes other services provided at
request of company.

42. Powers & Duties of AuditorsPowers & Duties of Auditors
[Section 143][Section 143]
qCorresponding old sections : 227 , 228 , 619
•Access to subsidiary company’s records for
consolidation purpose
• Auditor’s report to include
ØQualification on maintenance of accounts (alongwith
reasons)
ØInternal financial controls
• Compliance with auditing standards.
•Auditors to inquire and report upon loss on sale of
securities – only non-investment/banking companies

43. Powers & Duties of AuditorsPowers & Duties of Auditors
[Section 143][Section 143]
• For government company – report on directions of
CAG
• Branch audit – duties and powers prescribed in Rules
• Additional reporting matters to be prescribed by NFRA
• Immediate fraud reporting to Central Governmaent-
relaxation in terms of reporting fraud to CG. Now,
report to Audit Committee first.
• Duties equally applicable to CWA/CS.

44. Auditor’s Powers and Duties -RulesAuditor’s Powers and Duties -Rules
11,12,1311,12,13
 Auditors report shall include [Rule 11]
ØWhether company has disclosed effect of pending
litigations on FS.
ØWhether company has made provision for foreseeable
losses on long term contracts , including derivative
contracts.
ØIf any delay in depositing money in Investor Education &
Protection Fund.
 Duties in relation to Branch Audit [Rule 12]
ØBranch Auditor shall submit report to Company’s
Auditor.
ØFraud reporting provisions similar to provisions of
Section143(12).

45. Auditor’s Powers and Duties -RulesAuditor’s Powers and Duties -Rules
11,12,1311,12,13
 Reporting of Frauds [Rule 13]
ØIn case of fraud, report to Board or Audit
Committee ,seeking reply within 45 days.
ØOn reciept of reply, alongwith comments, forward
report to CG.
ØIn case of no reply from Board/Audit Committee,
forward report to CG.
• Send report to Secretary, Ministry of Corporate
Affairs.

46. Restriction on other services byRestriction on other services by
Auditor [Section 144]Auditor [Section 144]
• Approved services
ØApproved by Board of Directors
ØApproved by Audit Committee
• Restricted services
Ø accounting and book keeping services
Ø internal audit
Ø design and implementation of any financial information system
Ø actuarial services
Ø investment advisory services
Ø investment banking services
Ø rendering of outsourced financial services
Ø management services
Øany other kind of services as may be prescribed

47. Restriction on other services byRestriction on other services by
Auditor [Section 144]Auditor [Section 144]
• Transition period - before closure of 1st financial year
• Restriction also on rendering services directly or indirectly to holding /
subsidiary company
• Direct/indirect – ‘individual’– includes
Ø Individual
Ø Through relative
Ø Any other person connected or associated with such individual
Ø Through any other entity in which such individual has
 significant influence or control
ØThrough any other entity whose name or trade mark or brand is
used by the individual

48. Restriction on other services byRestriction on other services by
Auditor [Section 144]Auditor [Section 144]
• Direct/indirect – ‘firm’– includes
Ø Either itself
Ø Through any of its partners
Ø Through its parent, subsidiary or associate entity
Ø Any other entity in which the firm/partner has significant
 influence or control
ØAny other entity whose name or trademark or brand is used by the
firm/partner(s)
• Significant influence defined
Ø Control of 20% of total share capital
Ø Control of business decision under an agreement

49. Restriction on other services byRestriction on other services by
Auditor [Section 144]Auditor [Section 144]
 Restriction not applicable to
- Audit under any statute
- Certification work required to be done by the
statutory auditors
- Any representation before an authority
 Associate concern defined to include
proprietor/partner/relative who is
director/partner/holding substantial interest

50. Signing Report/ Attending AGMs-
Section 145-146
Auditor to sign Audit reports etc.[Section 145]
qCorresponding old section : 229,230
• Qualifications having adverse effect
Ø Shall be read in AGM
Ø Open for inspection
Auditors to attend AGM [Section 146]
q Corresponding old section : 231
• AGM notices to be forwarded to auditor
• Auditor to attend AGM
Ø Unless exempted by company
Ø Can attend through authorised representative (AR)
Ø AR to be qualified to be auditor
• Right to be heard at AGM

51. Punishment for Contravention [SectionPunishment for Contravention [Section
147]147]
qCorresponding old section : 232,233
• Default by Company – 25,000 – 5,00,000
 Officer – 1 year/10,000-1,00,000/both
• Default by auditor – 25,000 – 5,00,000 provided
 Willful contravention – 1 year and 1,00,000 –25,00,000
[Appointment 139, powers duties 145, other services
144,signing 145]
• Conviction of auditor
Ø Additional penal provisions
Ø Refund remuneration
Ø Pay damages

52. CG to specify audit of items of costCG to specify audit of items of cost
in respect of certain companies-in respect of certain companies- SectionSection
148148
• Board shall appoint a cost accountant in practice or
a firm of cost auditors in practice on
recommendation of Audit Committee.
• Remuneration to be decided by
Board[recommended by Audit Committee] and
ratified by shareholders.
 Auditor appointed under section 139 cannot be
cost auditor.

53. Likely impact of Audit/AccountsLikely impact of Audit/Accounts
related provisionsrelated provisions
 Enhanced transparency, objectivity and
accountability
 Substantial increase in cost of compliance
 Audit as a profession may suffer setback
 Audit risk/liability issues
 Financial year change

54. THANK YOU
FOR
YOUR
PRECIOUS TIME
AND
ATTENTION
Dr. Sanjiv Agarwal
FCA, FCS, Jaipur
asandco@gmail.com
sanjivservicetax@gmail.com