Implementation Guide on

Reporting under Rule 11(e) and Rule

11(f) of the Companies (Audit and

Auditors) Rules, 2014

The Ministry of Corporate Affairs (MCA) issued the Companies (Audit and Auditors) Amendment Rules, 2021 on March 24, 2021 introducing inter alia new Rule 11(e) and new Rule 11(f) in the Companies (Audit and Auditors) Rules, 2014. The Reporting requirements set forth under these Rules are applicable for audits of companies for the financial year 2021-22 and onwards. These Rules have cast onerous responsibility on auditors as scope of reporting under these Rules is very wide. The Auditing and Assurance Standards Board (AASB) of ICAI felt the need to provide guidance to the members on these reporting requirements and took the initiative to bring out an Implementation Guide to help the members so that they can discharge their duties more efficiently and effectively.

I am happy to note that the Auditing and Assurance Standards Board of ICAI has brought out this “Implementation Guide on Reporting under Rule 11(e) and Rule 11(f) of the Companies (Audit and Auditors) Rules, 2014” for providing appropriate guidance to the members so that the requirements of these Rules can be fulfilled in letter and spirit. The Implementation Guide provides guidance to auditors on Rule 11(e) which deals with reporting on lending or receiving funds through pass through entities marked for ultimate beneficiary and Rule 11(f) which deals with reporting on the payment/declaration of dividend. The Implementation Guide provides detailed guidance on these Rules including various audit procedures to be performed. It further specifies various scenarios for better understanding of the members and enables them to deal with the practical situations which may be faced by them while reporting under these Rules.

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