MCA modifies the rules on corporate filings and strengthens the role of auditors

0



The Ministry of Corporate Affairs (MCA), in an effort to bring greater transparency to filings, has changed the rules relating to companies and auditors.



According to a report by Activity area, the new rules will require companies to provide information relating to liquidity. The auditors will have to file a declaration relating to exempt deposits and cash.


The new rules, experts say, will expand liability from directors to auditors. They came into force on August 29.



“Now auditors will be in the front seat, where they will also have to confirm compliance with MCA guidelines. Previously, only companies and administrators had to confirm such compliance with the MCA; now auditors must also confirm compliance with the rules to the MCA. This applies to all companies, whether private or public,” said Manish Gupta, partner at IndusLaw, quoted in the BL report.



Form DPT-3 has been modified to strengthen auditor accountability, the report adds. DPT-3 requires the disclosure of a detailed classification of amounts from different lenders and depositors during the previous fiscal year.



The new disclosures would contain:


  • Opening balance information.

  • Loans during the year.

  • Refunds during the year.

  • Seniority of credits in progress for less than a year or 1 to 3 years or more than 3 years.

  • The closing balance.

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and up-to-date with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor

Share.

About Author

Comments are closed.