“Disclosure Addl to bring transparency to the financial statements”

Business office:

CA Shah said: “In recent years, substantial changes have been made to auditor reporting requirements”

With the ever-increasing stringency of the regulatory framework and disclosure requirements under various corporate law provisions, the Ministry of Commercial Affairs, an empty notification dated March 24, 2021 further mandated a list of many additional disclosures required in financial statements by amending Annex III. to the Companies Act 2013. Amendments have been made to provide more transparency by providing for various disclosures, including the treatment of delisted companies, details of Benami’s ownership, undisclosed income, etc., applicable from of April 1, 2021, said CA Julfesh Shah. while addressing a webinar hosted by Corporate Entrepreneurs Guild (CEG).

He stated that since the changes have been made to Sections I, II and III of Annex III, therefore the same will apply to companies which have to comply with Company Rules (Accounting Standards), 2006, as well than corporations (Indian Accounting Standards) Rules, 2015, including non-bank financial corporations (NBFC). In recent years, substantial changes have been made to auditor reporting requirements, but no corresponding changes have been made to Annex III for the preparation of financial statements. Thus, to align the financial statements of the company in accordance with the auditor’s reporting requirements, the following changes have been made and the majority of the changes to Schedule III of the Companies Act 2013 have been undertaken in response to the modifications covered in newly issued companies. (Auditors’ order and report) 2020 and the company change rules (Indian accounting standards), 2020, explained Shah.

Among the various other changes, information regarding the shareholding of promoters, the schedule of trade receivables and trade debts, investment work in progress, intangible assets, the reasons for the use of funds for other purposes than those for which they were borrowed, if there are still charges or satisfaction to be registered with the ROC beyond the legal period, information concerning the receipt of funds from foreign entities, etc. voluntary default by any financial institution, whether the books of accounts are reconciled with the quarterly or monthly declarations filed with the bankers, compulsory rounding of figures, revaluation of fixed assets whether carried out by an approved appraiser, report on the merger, etc. NP Udeshi, Chairman of the Corporate Entrepreneurs Guild made opening remarks while SH Singh, Secretary led the question and answer session and moved the vote of thanks. The webinar was well attended by corporate entrepreneurs from various sections.

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Marianne R. Winn

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