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Companies (Auditor’s Report) Order, 2020

Companies (Auditor’s Report) Order, 2020

Introduction
CARO 2020, commonly known as Companies Auditors Report Order 2020 is the latest prescribed format of audit reports of companies under Companies Act, 2013 which supersedes CARO 2016. The objective of CARO 2020 is to cover the wide variety of information mandated to be disclosed by the auditors in their Audit reports, covering the additional requirements of the National Financial Reporting Authority, to be disclosed to the shareholders and to enhance the overall reliability and transparency of reporting in the financial statements of companies. For instance, earlier, details of any proceedings pending under the Benami Transactions (Prohibition) Act, 1988 … Read more

Interim Financial Reporting

Interim Financial Reporting

An Interim Financial Report is a complete or condensed set of financial statements reporting the financial results for a period shorter than a fiscal year. Ind AS 34 does not specify which entities must publish an interim financial report. It applies if any entity publishes an interim financial report that asserts compliance with the Indian Accounting Standards.

Ind AS 34 provides the minimum content required to be mentioned in the interim financial report and provides the principles required for recognition and measurement in complete or summarized financial statements for a specified interim period. However, it doesn’t mandate which entities must … Read more

Section 141 of the Companies Act, 2013- Eligibility, qualifications, and disqualifications of auditors

Section 141 of the Companies Act, 2013- Eligibility, qualifications, and disqualifications of auditors

Introduction
A company is defined as a business entity formed for performing certain lawful purposes and is incorporated under the Companies Act, 2013. It is somewhat imperative on the part of the company to work transparently in the best interests of the public in general and its stakeholders. In this regard, an auditor is generally appointed by the company who is entrusted with monitoring the company’s affairs and inspecting the company’s books of accounts and further validating the accuracy of the transactions.

An audit is an impartial or unprejudiced analysis and assessment of the financial statements of a business entity. … Read more

Audit of Insurance Companies

Audit of Insurance Companies

The Insurance Act defines the Indian Insurance Company as the insurer being a corporation- which is formed and registered under the Companies Act, 2013; whose sole purpose is to continue life insurance business or general insurance business or reinsurance business; and in which collective assets of equity shares by an overseas company, either by itself or through its subsidiary corporations or its nominees, do not go beyond 26% of the paid-up equity capital of such Indian insurance corporation.

The following are the relevant points which an auditor should keep in mind at the time of conducting the audit of an … Read more

Critical Audit Matters (CAMs)

Critical Audit Matters (CAMs)

The new requirement for auditors to report critical audit matters (CAMs) is the most significant change to the auditor’s report by the Public Company Accounting Oversight Board (PCAOB) in United States via its new standard AS 3101. The determination of CAMs is principles-based and depends on the facts and circumstances of each audit. To date, only a limited number of audits have been subject to the CAM requirements. The second effective date, which impacts audits of all other companies to which the requirements apply is for audits of fiscal years ending on or after December 15, 2020.

What is a Read more

Risk - Based Internal Audit

Risk – Based Internal Audit

Over the last few years, cyber-crimes have grown in number and in the ways cybercriminals exploit them. Due to this, the need to manage risks has been recognized by organizations and adopted as a crucial part of a good governance best practice. A Risk-Based Internal Audit (RBIA) is focused on the organization’s response to the risks they face in achieving their goals and objectives. An RBIA differs from other types of audits as it is based on the business goals and their associated risks. With this approach, internal auditors gain other responsibilities – now they not only manage the control Read more

Financial responsibility of Broker-dealers in US

Financial responsibility of Broker-dealers in US

The Securities Exchange Act 1934 (“Exchange Act” or “Act”) governs the way in which the securities markets in United States and its brokers & dealers operate. Broker-dealers in US are required to meet certain financial responsibilities including maintaining minimum net capital or liquid assets; safeguarding the customer funds and securities; and making and preservation of accurate books and records.

The Act generally defines a “broker” broadly as any person engaged in the business of effecting transactions in securities for the account of others such as investment advisers, financial consultants, placement agents, independent contractors etc. Unlike a broker, who acts as … Read more

The Basics of Crowdfunding

The Basics of Crowdfunding

A small business can raise capital in a number of different ways, including by selling its securities. Under the federal securities laws, every offer and sale of securities, even if to just one person, must either be registered with the Securities and Exchange Commission (“SEC”) or conducted under an exemption from registration. One of the exempt offerings wherein SEC permit companies to offer and sell securities is through crowdfunding.

Crowdfunding is an evolving method of raising capital that has been used to raise funds through internet for a variety of projects.  Title III of the JOBS Act created a federal … Read more

Financial restatements- Understanding the significance

Financial restatements- Understanding the significance

Within the last few years, the corporate reporting environment has been reshaped by revised corporate reporting standards. Corporate officers, auditors and audit committees are involved in the efforts of publicly traded companies to provide accurate corporate financial reports to their investors. But often, mistakes make their way into financial statements of public companies, and when they do, what happens next can vary depending on the timing and severity.  Every corporate office is required to certify that quarterly and annual financial statements are fair in all material respects, financial condition and operational results .It is mandatory to correct a financial statement … Read more

Portrait of business girl attending meeting

Audits Under PCAOB Standards

A yearly audit is a key safeguard for your money and a planning tool for the year ahead. Think of it as a “year in review” for your finances.

The primary benefit of an annual audit under PCAOB standards  is the confidence it gives you and your members that the PTO’s financial house is in order. Basically, the audit verifies the numbers, ensures accuracy, and assesses procedures. A comprehensive audit also identifies internal controls that should be implemented to improve the integrity of your financial systems. Furthermore, the audit gives closure to the treasurer and sets a starting point for … Read more

auditing

Government Sets Up Experts Groups to Look Into Auditing Industry.

Acting on a petition Indian audit firms sent to prime minister Narendra Modi recently the corporate affairs ministry  has constituted an expert group to delve into the issues related to the operations of audit firms In the country,

The elected expert group members former competition commission of India. (RBI) deputy governor NS Vishwanathan will study the operating structures of multinational audit firms implementation of audit rotation and use of restrictive covenants by global investors. They have two months to engage with relevant stakeholders and make suitable recommendations to the government. It’s a positive order for Indian audit firms.

The … Read more

internalaudit

Why Auditing Service is Necessity

Auditing

An audit is more than a formality, it is a necessity to protect your business and encourage it to thrive. Early warnings, open communication and pragmatic resolution of issues are the essential features.

Audit testing procedures tailored to the specific audit, our firms maintain excellent relationships with their clients. This quality-led approach means members provide an intelligent, constructive and challenging audit to every one.

Statutory Audits : It is a legally required review of the accuracy of a company’s or governments financial records. The purpose of a statutory audit is the same as the purpose of any other audit … Read more

Clause 49: Audit Committee

As per section 177 of the Companies Act, 2013 read with Rule 6 of Companies (Meetings of Board and its powers) Rules, 2014, every listed company and all other public companies with paid up capital of Rs. 10 Cr. or more; or having turnover of 100 Cr. or more; or having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding Rs.50 Cr. or more, to have an Audit Committee which shall consist of not less than three directors and such number of other directors as the Board may determine of which two thirds of the total number of … Read more

Financial Reporting And the Independent Auditor

  • The board of directors has primary responsibility for the corporation’s internal and external financial reporting functions.
    The Chief Executive Officer and Chief Financial Officer are important people and boards usually have a high degree of reliance on them for the integrity and supply of accounting information.
    To reduce this risk and to enhance the integrity of financial reports, corporation financial reports must be audited by an independent external auditor who issues a report that accompanies the financial statements.
    In late 2009, Ministry of corporate governance issued voluntary guidelines over corporate governance in India. Many committees have been build to give
Read more

Amendment in Companies (Cost Records and Audit) Rules, 2014

MCA vide notification dated 31st December 2014 has made amendment in the Companies (cost records and audit) Rules, 2014 through Companies (Cost Records and Audit) Amendment Rules, 2014. The details of amendment is reproduced as below:-

1. In rule 2
After clause (a) the following clause shall be inserted:-
(aa) Central Excise Tariff Act Heading means the heading as referred in the Additional Notes in the First schedule of the central Excise Tariff Act, 1985 [5 of 1986]

2. Rule 3 shall be substituted by the following rule:-
Position under existing rule 3:
The existing rule 3 provides for applicability … Read more