Sec 143(3) Audit Report Amendment For Sept/Nov 2024

Sec 143(3) Rule 11 Other Matters to be included in Auditors Report

Other Matters to be included in Auditors Report

The auditors report shall also include their views and comments on the following matters, namely:-

(a) whether the company has disclosed the impact, if any, of pending litigations on its financial position in its financial statement;

(b) whether the company has made provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts;

(c) Whether there has been any delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

(d)

     (i) Whether the management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

     (ii) Whether the management has represented, that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries, and

     (iii) Based on such audit procedures that the auditor has considered reasonable and appropriate in the circumstances, nothing has come to the notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material misstatement.

(e) Whether the dividend declared or paid during the year by the company is in compliance with section 123 of the Companies Act, 2013.

(f) Whether the company, in respect of financial years commencing on or after the 1st April 2022 has used such accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all transactions recorded in the software and the audit trail feature has not been tampered with and the audit trail has been preserved by the company as per the statutory requirements for record retention.

Sec 143(3) read with Sec 197(16)

Auditors Report must contain comments on Managerial Remuneration: -

"In our opinion, the managerial remuneration for the year ended March 31, 2021, has been paid/provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act."

Section 143(3) 

Disclosure of Internal Financial Controls (IFC) and the Auditor Responsibilities:

The adequacy and operational effectiveness of the company internal financial controls over financial reporting are now subject to a special requirement for auditors reports (IFCFR).

With reference to the financial statements in place, this amendment requires auditors to express a clear view on the adequacy of the company internal financial controls and their effectiveness throughout the audit period.

The presence of sufficient internal financial controls over financial reporting (IFCFR) and whether or not these controls were in place during the audit period are now requirements that auditors must specifically include in their reports.

This stipulation guarantees increased responsibility and openness when assessing a business financial control mechanisms.

The purpose of this modification is to improve openness and guarantee a comprehensive evaluation of an organization internal control systems.