The Companies Act, 2013 has two very important Sections - Section 134 and Section 143, which have a direct impact on the audit and accounting profession.
Section 134 of the Companies Act, 2013 on â€śFinancial statement, Boardâ€™s report, etc.â€ť states inter alias:
The Directorsâ€™ Responsibility Statement referred to in clause (c) of sub-section(3) shall state that:
Section 143, of the Companies Act 2013, on â€śPowers and duties of auditors and auditing standardsâ€ť states inter alia:
Section 143(3) contains the Auditorâ€™s Report which states:
â€śwhether the company has adequate internal financial controls system in place and the operating effectiveness of such controlsâ€ť;
When we talk in terms of â€śadequacy and effectiveness of controlsâ€ť; it refers to the adequacy of the control design and whether the control has been working effectively during the relevant financial year.
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