Companies (Auditor's Report) Order(2016) - Audit report, Auditing and Secretarial Practice Video Lecture | Auditing and Secretarial Practice - B Com

in this part of company act updates we
will discuss companies auditor's report
order 2016 notification dated March 29th
2016
let's take a view on detail notification
in exercise of the powers conferred by
subsection 11 of section 143 of the
Companies Act 2013 18 of 2013 and in
Super Session of the company's auditor's
report order 2015 published in The
Gazette of India extraordinary part 2
section 3 subsection III v number
sm99251 or omitted to be done before
such through procession the central
government after consultation with the
committee constituted under proviso to
subsection 11 of section 143 of the
Companies Act 2013 hereby makes the
following order namely
one short title application and
commencement one this order may be
called the company's auditor's report
order 2016 - it shall apply to every
company including a foreign company as
defined in clause 42 of section 2 of the
Companies Act 2013 18 of 2013 hearing
after referred to as the Companies Act
except I a banking company is defined in
clause C of section 5 of the Banking
Regulation Act 1949 10 of 1949 III an
insurance company is defined under the
Insurance Act
1938 for of 1938 3 a company licensed to
operate under section 8 of the Companies
Act
a one-person company is defined under
clause 62 of section 2 of the Companies
Act and a small company is defined under
clause 85 of section 2 of the Companies
Act and V a private limited company not
being a subsidiary or holding company of
a public company having a paid-up
capital and reserves and surplus not
more than rupees 1 crores on the balance
sheet date and which does not have total
borrowings exceeding rupees one crore
from any bank or financial institution
at any point of time during the
financial year and which does not have a
total revenue is disclosed in scheduled
three to the Companies Act 2013
including revenue from discontinuing
operations exceeding rupees 10 crore
during the financial year as per the
financial statements
to auditor's report to contain matters
specified in paragraphs 3 & 4 every
report made by the auditor under Section
143 of the Companies Act 2013 on the
accounts of every company audited by him
to which this order applies for the
financial years commencing on or after
April 1st 2015
shall in addition contain the matters
specified in paragraphs 3 & 4 as may be
applicable provided the order shall not
apply to the auditor's report on
consolidated financial statements three
matters to be included in the auditor's
report the auditors report on the
accounts of a company to which this
order applies shall include a statement
on the following matters namely I
whether the company is maintaining
proper records showing full particulars
including quantitative details and
situation of fixed assets B whether
these fixed assets have been physically
verified by the management at reasonable
intervals whether any material
discrepancies were noticed on such
verification and if so whether the same
have been properly dealt with in the
books of account
see whether the title deeds of immovable
properties are held in the name of the
company if not provide the details there
are I I whether physical verification of
inventory has been conducted at
reasonable intervals by the management
and whether any material discrepancies
were noticed and if so whether they have
been properly dealt with in the books of
account
three whether the company has granted
any loans secured or unsecured to
companies firms limited liability
partnerships or other parties covered in
the register maintained under Section
189 of the Companies Act 2013
if so ah whether the terms and
conditions of the grant of such loans
are not prejudicial to the company's
interest be whether the schedule of
repayment of principal and payment of
interest has been stipulated and whether
the repayments or receipts are regular C
if the amount is overdue state the total
amount overdue for more than 90 days and
whether reasonable steps have been taken
by the company for recovery of the
principal and interest
for in respective loans investments
guarantees and security weather
provisions of section 185 and 186 of the
Companies Act 2013 have been complied
with if not provide the details thereof
V in case the company has accepted
deposits whether the directives issued
by the Reserve Bank of India and the
provisions of section 73 to 76 or any
other relevant provisions of the
Companies Act 2013 and the rules framed
there under where applicable have been
complied with if not the nature of such
contraventions be stated if an order has
been passed by company law board or
national company law tribunal a Reserve
Bank of India or any court or any other
tribunal whether the same has been
complied with or not
Phee weather maintenance of cost records
has been specified by the central
government under subsection 1 of section
148 of the Companies Act 2013 and
whether such accounts and records have
been so made and maintained they whether
the company is regular in depositing on
disputed statutory Jews including
Provident Fund employees state insurance
income tax sales tax service tax duty of
customs duty of excise value-added tax
says and any other statutory dues to the
appropriate authorities and if not the
extent of the arrears of outstanding
statutory doose's on the last day of the
financial year concern for a period of
more than six months from the date they
became payable shall be indicated be
ware dues of income tax or sales tax or
service tax or Duty of customs or duty
of excise or value-added tax have not
been deposited on account of any dispute
then the amounts involved in the forum
where dispute is pending shall be
mentioned a mere representation to the
concerned Department shall not be
treated as a dispute the ie
whether the company has defaulted in
repayment of loans or borrowing to a
financial institution Fang government or
dues to to venture holders if yes the
period and the amount of default to be
reported in case of defaults to banks
financial institutions and government
lender wise details to be provided
Ickes whether monies raised by way of
initial public offer or further public
offer including debt instruments and
term loans were applied for the purposes
for which those are raised if not the
details together with delays or default
and subsequent rectification if any as
may be applicable be reported X whether
any fraud by the company or any fraud on
the company by its officers or employees
has been noticed or reported during the
year if yes the nature and the amount
involved is to be indicated
sigh whether managerial remuneration has
been paid or provided in accordance with
the requisite approvals mandated by the
provisions of section 197 Reid with
scheduled each of the companies app if
not state the amount involved in steps
taken by the company for securing refund
of the same CI whether the nippy company
has complied with the net own funds to
deposits in the ratio of 120 to meet out
the liability and whether the nippy
company is maintaining 10% on n convert
term deposits as specified in the nippy
rules 2014 to meet out the liability
CIE whether all transactions with the
related parties are in compliance with
sections 177 and 188 of Companies Act
2013 where applicable and the details
have been disclosed in the financial
statements etc as required by the
applicable accounting standards sip
whether the company has made any
preferential allotment or private
placement of shares or fully or partly
convertible debentures during the year
under review and if so as to whether the
requirement of section 42 of the
Companies Act 2013 have been complied
with in the amount raised have been used
for the purposes for which the funds
were raised if not provide the details
in respect of the amount involved in
nature of non-compliance XVII whether
the company has entered into any
non-cash transactions with Directors or
persons connected with him and if so
whether the provisions of section 192 of
Companies Act 2013 have been complied
with speak whether the company is
required to be registered under section
45 ie of the Reserve Bank of India act
1935 and if so whether the registration
has been obtained
for reasons to be stated for unfavorable
or qualified answers one we're in the
auditor's report the answer to any of
the questions referred to in paragraph
three is unfavorable or qualified the
auditor's report shall also state the
basis for such unfavorable or qualified
answer as the case may be to where the
auditor is unable to express any opinion
on any specified matter his report shall
indicate such fact together with the
reasons as to why it is not possible for
him to give his opinion on the same
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