ICAI publishes Handbook on Audit of CSR Activities

The Institute of Chartered Accountants of India (ICAI) published the Handbook on the Audit Corporate Social Responsibility (CSR) Activities.

The CSR Committee of ICAI has brought out this Handbook on Audit of CSR Activities to provide detailed guidance on the auditing aspects of CSR spends and the roles and responsibilities of members of ICAI.

The publication will be a useful guide for complying with auditing requirements as per the Companies (Company Social Responsibilities Policy) Rules, 2014.

The handbook consists of a detailed report on the implementation of CSR Activities; requirement of CSR Audit, the responsibility of Auditors and reporting requirement under CARO 2020 relevant to CSR.

CA. Pramod Jain, Chairman of the CSR Committee reported that during the COVID-19 pandemic, CSR has played an even greater role with corporates, and individuals undertaking Corporate Social Responsibility projects over and above the minimum criteria determined by law. Corporates have stood by the Government, during the time of crisis to strengthen the country both socially and economically.

The ICAI has released a Technical Guide on Accounting for Corporate Social Responsibility Activities, providing guidance on the accounting aspects of CSR expenditures. With the increasing importance of the CSR activities, it has been felt necessary to provide guidance to the industry and professionals on the auditing aspects of the CSR Expenditures. Requirement of audit of CSR activities seems not to be mandatory as per Companies Act 2013.

However, various provisions of the Companies (Corporate Social Responsibility Policy) Rules 2014 require the monitoring and reporting mechanism for CSR activities. Hence, monitoring of CSR activities and its reporting is mandatory as per the Companies (Company Social Responsibility Policy) Rules 2014.

Also, it is the responsibility of the Company through the CSR Committee to monitor the funds of the Company which are to be utilized as per the CSR Policy of the Company.

“In India, with the enactment of the Companies Act, 2013 by the Ministry of Corporate Affairs, Government of India, it has now become mandatory for Companies to take up CSR projects on social welfare activities. CSR has played a very important role in supporting the social and economic development of the country during the Covid-19 pandemic,” CA Atul Gupta, the President of ICAI said.

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