Regulatory updates

Regulatory updates

Updates from MCA

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As per the proviso to rule 3 of the Companies (Accounts) Rules, 2014, every company which uses accounting software for maintaining its books of account, should use only such accounting software which has a feature of recording audit trail of each and every transaction, creates an edit log of each change made in the books of account along with the date when such changes were made and ensures that the audit trail cannot be disabled. This rule was applicable from 1 April 2022.

The MCA vide circular dated 31 March 2022 has deferred the applicability of this clause; accordingly, it would now be applicable from 1 April 2023.

To access the text of MCA circular, please click here

On 11 February 2022, MCA had amended rule 12 of the Companies (Accounts) Rules, 2014, thereby inserting a new sub-rule (1B) which required every company covered under section 135(1) of the Companies Act, 2013 to furnish a report on Corporate Social Responsibility in Form CSR-2 to the Registrar for the preceding financial year (2020-2021) and onwards as an addendum to Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be.

Form CSR-2 for the preceding financial year (FY2020- 2021) would be filed separately on or before 31 March 2022, after filing Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be.

The MCA, vide notification dated 31 March 2022 has extended the due date for filing Form CSR-2 for FY2020-2021 to 31 May 2022 .

To access the text of MCA notification dated 11 February 2022, please click here

To access the text of MCA notification dated 31 March 2022, please click here

Action points for auditors

Earlier a form to furnish a report on CSR was not prescribed. Details of CSR committee, the CSR policy and other prescribed matters were required to be part of the Board of Directors Report. While the auditors do not have any reporting obligations on this form, they should engage with clients and make them aware of the new norms along with the revised reporting timelines.

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