Audit reports must carry information on company's loan defaults, dues

NEW DELHI: The corporate affairs ministry has issued guidelines for auditors on matters that have to be included in the audit reports prepared by them.

In its order dated March 29, the ministry has asked auditors to report whether the company has defaulted in repayment of loans to a financial institution, bank, government or dues to debenture holders along with the lender wise list of dues.

To check there is no diversion of funds, the auditors will have to report whether money raised by way initial public offer and term loans were applied for the purposes for which raised.

The auditor report has to carry whether any fraud by the company or employees has been noticed and was it reported to the board and the central government.

“The auditors have to report whether the company is regular in depositing undisputed statutory dues including provident fund and all taxes,” a senior government official said. The government has also made it mandatory for auditors to report any fraud detected by them beyond a certain threshold.

In case of companies raising deposits from public, auditors have to report whether the directives issued by RBI or any other relevant provisions of the Companies Act of 2013 have been complied with. The norms will be applicable for reports of the current financial year.