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January 2016

The Companies (Audit And Auditors) Amendment Rules, 2015

By Sejal Vasa
Reading Time 2 mins
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The Ministry of Corporate Affairs has vide Notification dated 14th December 2015, amended the Companies (Audit and Auditors) Rules, 2014. They have been notified in the Official Gazette on 15th December 2015.

As per the Notification, the Rule 13 now reads :

Rule 13 : Reporting of frauds by auditor and other matters:

(1) If an auditor of a company, in the course of the performance of his duties as statutory auditor, has reason to believe that an offence of fraud, which involves or is expected to involve individually an amount of rupees one crore or above, is being or has been committed against the company by its officers or employees, the auditor shall report the matter to the Central Government. The rule also contains the time period for reporting to the Board or Audit Committee, and to the Central Government in case the auditor fails to get replies or observations. In case of a fraud involving lesser than the amount of Rs. 1 crore, the auditor shall report the matter to Audit Committee constituted u/s. 177 or to the Board immediately but not later than two days of his knowledge of the fraud and he shall report the matter specifying the nature of fraud with description; approximate amount involved and parties involved.

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