Notification Exempting Private Cos from Reporting Internal Finance Control by Auditor is applicable from 1st April 2016: MCA

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The Ministry of Corporate Affairs recently notified that the exemption given to certain private companies on reporting internal finance control by auditor is applicable from 1st April 2016.

Section 143(3)(1) read with the applicable rules of the Companies Act, 2013 contains the provisions applicable to the auditor of the company. The provision requires that the auditor is supposed to report about whether there is sufficient internal financial control system in the company and the same has been operated efficiently or not.

The Government, as per Notification dated 13th June, 2012 had exempted certain private companies from the above requirement.

The present notification stated that “Stakeholders have drawn attention of this Ministry to the serial no. 5 of notification No’ G.s.R. 583(E) dated 13th June, 2012 which states that requirements of reporting under section 143(3)(i) of the Companies Act 2013 shall not apply to certain private companies as mentioned therein and have sought clarification w.r.t. the financial year(s) in respect of which the said exemption shall be applicable. The issue has been examined in the Ministry and it is hereby clarified that the exemption shall be applicable for those audit reports in respect of financial statements pertaining to financial year, commencing on or after 1st April,2016, which are made on or after the date of the said notification.

Read the full text of the Notification below.

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