🔎📊 Navigating Financial Reporting and Audits under Indian Company Law: An 80/20 Rule Perspective 🔍📊 Hello, #LinkedInCommunity! Today we’re diving into #FinancialReporting and #Audits as defined under Indian #CompanyLaw. Here are the most crucial 20% of concepts that will provide insights into roughly 80% of this intricate topic.
1️⃣ Financial Reporting 📄📊:
As per Section 129 of the Companies Act, 2013, every company must prepare financial statements for each financial year, which should give a true and fair view of the company’s affairs.
2️⃣ Components of Financial Statements 📚💼:
The financial statements include a balance sheet, profit and loss account, cash flow statement, statement of changes in equity, and explanatory notes.
3️⃣ Book of Accounts 📘📌:
Section 128 mandates every company to keep and maintain books of accounts and relevant documents on a going concern basis for at least eight years immediately preceding a financial year.
4️⃣ Appointment and Role of Auditors 🕵️♀️🔍:
As per Section 139, every company must appoint an individual or a firm as an auditor. The auditors are responsible for examining and verifying the books of accounts and presenting an audit report.
5️⃣ Audit Report & Its Importance 📃🖋️:
The audit report is a statement by the auditors, expressing their opinion on the truth and fairness of financial statements. It increases credibility and trust in the financial disclosures of a company.
6️⃣ Internal Audit ⚙️📑:
Companies of certain size and turnover are required to conduct an internal audit. This is a continuous process that helps in risk management and improving efficiency.
By comprehending these core principles, you’ll acquire a broad understanding of Financial Reporting & Audits under Indian Company Law. Let’s continue learning and discussing. Share your thoughts below!
