The Institute of Chartered Accountant India(ICAI) has issued Implementation Guide on Reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
Reetu | Mar 31, 2023 | Views
ICAI issues Implementation Guide on Reporting of Audit Trail
The Institute of Chartered Accountant India(ICAI) has issued Implementation Guide on Reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
The Ministry of Corporate Affairs (MCA) issued the Companies (Audit and Auditors) Amendment Rules, 2021 on March 24, 2021 introducing inter alia new Rules 11(e), 11(f) and 11(g) in the Companies (Audit and Auditors) Rules, 2014. The Rule 11(g) deals with reporting on the use of accounting software by a company for maintaining its books of accounts which has a feature of recording audit trail. This Rule cast onerous responsibility on the auditors as scope of reporting under this Rule is very wide.
Section 143(3) of the Companies Act, 2013 prescribes various matters on which auditors are required to report in their auditor’s report. Section 143(3)(j) states that auditor’s report shall also state such other matters as may be prescribed. Rule 11 of the Companies (Audit and Auditors) Rules, 2014 specifies such other matters that are to be reported by auditors. The Ministry of Corporate Affairs vide notification dated March 24, 2021 issued the Companies (Audit and Auditors) Amendment Rules, 2021 which made various changes in Rule 11 of the Companies (Audit and Auditors) Rules, 2014. These changes include new Rule 11(g) which has prescribed a new reporting requirement for auditors. The Rule 11(g) requires auditors to report on the use of accounting software by company for maintaining its books of account which has a feature of recording audit trail. The Auditing and Assurance Standards Board (AASB) of ICAI decided to develop an Implementation Guide for providing appropriate guidance to the members on this new reporting requirement so that the members can discharge their responsibilities in an effective manner.
It gives us immense pleasure to place in hands of the members, this “Implementation Guide on Reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014” brought out by the Auditing and Assurance Standards Board. The Implementation Guide was initially developed by a study group constituted by the Board for this purpose and thereafter it was finalised with the contribution of the Board members. The Implementation Guide contains detailed guidance on various aspects of reporting under Rule 11(g) including the various audit procedures to be performed. The Implementation Guide will enable auditors of companies to comply with the reporting requirement under this Rule effectively.
Section 143(3) of the Companies Act, 2013 provides various matters on which auditors are required to report in their auditor’s report. Clause (j) of Section 143(3) states that auditor’s report shall also state such other matters as may be prescribed. Rule 11 of the Companies (Audit and Auditors) Rules, 2014 specifies such other matters that are to be reported by the auditor.
The Ministry of Corporate Affairs (MCA) vide its notification No. GSR 206(E) dated March 24, 2021 has issued the ‘Companies (Audit and Auditors) Amendment Rules, 2021’ (hereinafter referred as “the Audit Rules”) read with sub-section 3 of Section 143 of the Companies Act, 2013 (hereinafter referred as “the Act”) introducing new Rule 11(e), new Rule 11(f) and new Rule 11(g) and deleting Rule 11(d).
Rule 11(g) is reproduced below:
“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.”
To Read More Download PDF Given Below:
In case of any Doubt regarding Membership you can mail us at [email protected]
Join Studycafe’s WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!”
Reetu is a Content Writer with 3+ years of experience in GST, Income Tax, Finance, Company Law, Education and Career Related Content. She is a B.COM(Honrs.) Graduate.
you can also submit your articles by sending mail at [email protected]
© 2020 Copyright Studycafe. All Rights Reserved.