The Companies Act, 2013 has introduced many new reporting requirements for the statutory auditors of companies. One of these requirements is given under the Section 143(3)(i) of the Act requiring the statutory auditor to state in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
The section has cast onerous responsibilities on the statutory auditors because reporting on internal financial controls is not covered under the Standards on Auditing issued by the ICAI and also because of the fact that no framework has been prescribed under the Companies Act, 2013 and the Rules there under for the evaluation of internal financial controls.
Auditing and Assurance Standards Board has brought out this Guidance Note on Audit of Internal Financial Controls Over Financial Reporting.
For a copy of Guidance Note please Here..
In today’s times, the society expects the businesses to fulfill their corporate social responsibility, thereby contributing to the overall development of the society in a more pragmatic and cohesive way. It is an accepted fact that corporate houses also have a major role to play in the equitable sustenance of the society at large and the onus on them to contribute towards all-round development of the society, environment, etc., which generally is termed as corporate social responsibility (CSR).
This, hitherto, being a voluntary activity on the part of few corporate houses to discharge their social obligation has now been given a more onerous responsibility with the introduction of provisions governing the expenditure on CSR activities, in the new Companies Act, 2013 (the Act). The provisions related to corporate social responsibility in the Act have already become effective from April 1, 2014.
Realizing the need to provide guidance on accounting for expenditure on corporate social responsibility activities ICAI has issued the 'Guidance Note on Accounting for Expenditure on CSR Activities' which comes into effect from the date of its issuance. The Guidance Note also consist of relevant sections of the Companies Act, 2013, Companies (Corporate Social Responsibility) Rules, 2014, as well as various notifications and circulars issued by the MCA with regard to CSR for ease of reference of members and others.
For a copy of Guidance Note please Here..
What activities does internal audit undertake that deliver the most value? What should be measured to determine that the organization’s expectations of value are being met? How does internal audit organize and structure the information that populates the metrics? And, most critically, do the answers to all these questions align; that is, does internal audit’s perception of its value, as measured and tracked, correlate with what the organization wants and needs from the internal audit function?
These are some questions that determine the value the internal Audit function to the entity. In 2010 the IIA recognized a need to capture a simple, memorable, and straightforward way to help internal auditors convey the value of their efforts to important stakeholders, such as boards of directors, audit committees, management, and clients. To that end, the association introduced the Value Proposition for Internal Auditing, which characterizes internal audit’s value as an amalgam of three elements: assurance, insight, and objectivity CBOK has released a report which presents a step-by-step process to ensure that expectations are understood and agreed upon, and appropriate measures are developed to drive and track performance. Readers can use it to compare their value and performance practices to other organizations based on insights from the CBOK 2015 Global Internal Audit Survey, the largest ongoing study of the internal audit profession in the world. These insights can help practitioners at all levels deliver on the internal audit value proposition of assurance, insight, and objectivity.
Updated International Professional Practices Framework (IPPF) of IIA defined the mission of Internal Audit as “To enhance and protect organizational value by providing stakeholders with risk-based, objective and reliable assurance, advice, and insight.” To fulfill that mission, internal audit functions across the globe must focus on risk as the foundation for what should be audited, how it should be audited, and what should be reported. However a question was raised as to the owner of risk. The literal answer is “not internal audit.” However, there is no question that internal audit has helped organizations better understand and manage risk in the past and will undoubtedly play a valuable role in the future. Report by CBOK ‘Who Owns Risk? A Look at Internal Audit’s Changing Role’ throws some light on this aspect. This report not only provides insights into the status of risk management and the role of internal audit around the world, but it also lays out 13 key actions that can help chief audit executives (CAEs) and internal auditors ensure that their internal audit function is properly positioned to address risk challenges in an ever-changing world.