Revised Guidance Note of ICAI on Reporting of Frauds under Section 143(12) of the Companies Act, 2013
The Companies Act, 2013 had introduced Section 143(12) and corresponding Rule 13 of the Companies (Audit and Auditors) Rules, 2014. These provisions require the statutory auditors to report to the Central Government about every fraud/suspected fraud committed against the company by the officers or employees of the company. The Auditing and Assurance Standards Board of the Institute of Chartered Accountants of India, in February 2015 had issued the Guidance Note on Reporting on Fraud under Section 143(12) of the Companies Act, 2013 to provide appropriate guidance on this section so that the requirements of the section can be fulfilled in letter and spirit by the auditors.
After the issuance of this Guidance Note, both Section 143(12) and Rule 13 of the Companies (Audit and Auditors) Rules, 2014 have been amended. The amended provisions require reporting by statutory auditor to Central Government only for individual frauds of Rs. one crore or above. The amended provisions have also made certain changes in the procedure and particulars of reporting under this section. These changes necessitated appropriate changes to be made in the Guidance Note earlier issued.
The ICAI has brought out this revised edition of Guidance Note on Reporting on Fraud under Section 143(12) of the Companies Act, 2013 for the benefit of the members. The Guidance Note incorporates all the necessary changes due to amendments in law at appropriate places.