Now, Auditor has to report whether the company is using accounting software that has the feature to record audit trail of each and every transactions.
More reporting requirements in the audit report has been introduced by new Rule in the Companies (Audit and Auditors) Rules, 2013.
In Companies (Audit and Auditors) Rules, 2013, in Rule 11, clause d has been omitted and Clause e has been inserted. In essence, it lays down the reporting requirements in the audit report in respect of the following:
- Other than what is disclosed in the notes to accounts, no circuitous transactions involving loans/ investments made by the company to another entity including foreign entity, for further lending, investing or providing guarantee or security to another third company.
- Other than what is disclosed in the notes to accounts, no circuitous transactions involving loans/investments received from another company including foreign company for lending/investing or providing guarantee or security to another third company.
- Any material misstatement on account of the above 2 points need to disclosed.
- Whether the dividend declared or paid during the year by the company is in compliance with section 123 of the Companies Act, 2013.
- Every company that uses accounting software to maintain its books of accounts to only use software that has the feature to *record audit trail of each and every transaction* put through from 1st April, 2021. The auditor has to report on the same. Companies have now been mandated to create *edit log of each change made in account books* with the proper dates. Companies must ensure that the audit trail is not disabled.
This is probably the beginning. Tax Audit Report & GST Annual Return may also add this reporting requirements in days to get.
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