Withdrawal of the Implementation Guide on Auditor’s Report under Rule 11(d) of Companies (Audit and Auditors) Amendment Rules, 2017 and Amendment to Schedule III to Companies Act, 2013
I. The Ministry of Corporate Affairs vide notification dated March 30, 2017 notified “Companies (Audit and Auditors) Amendment Rules, 2017” and “Amendment to Schedule III to the Companies Act, 2013”. Vide this amendment, the following new clause was inserted in Rule 11 of Companies (Audit and Auditors) Rules, 2014:
“(d) whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.”
Amendment was also made to Schedule III to the Companies Act, 2013 to require that every company shall disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 in the manner given in the amended Schedule III.
II. In April 2017, the Auditing and Assurance Standard Board (AASB) issued the “Implementation Guide on Auditor’s Report under Rule 11(d) of Companies (Audit and Auditors) Amendment Rules, 2017 and Amendment to Schedule III to Companies Act, 2013” to provide guidance to the members on the matter.
III. Subsequently, on this matter, a Clarification dated 01.09.2018 was issued by the Corporate Laws and Corporate Governance Committee (CLCGC) stating that “Since this disclosure requirement was event specific, and hence was relevant for Financial Year 2016-17 only and required disclosure is also for period falling under that financial year. Therefore, in Notes to Account as well as Audit Report, the disclosure requirement relating to SBNs are not applicable for the Financial Year 2017- 18 & subsequent years. Consequent disclosures may be made in the Financial Statements/Audit Reports.”
The Clarification issued by CLCGC is available on ICAI’s website at the following link: https://www.icai.org/new_post.html?post_id=15085
IV. AASB at its 190th meeting held on 1st & 2nd November 2018 considered the matter and decided to withdraw the aforesaid Implementation Guide. Accordingly, the aforesaid Implementation Guide is withdrawn with effect from the date of hosting of this Announcement on the ICAI’s website.
Chairman, Auditing and Assurance Standards Board