Please guide whether Internal Control over Financial Reporting is applicable to private limited companies. When Companies paid up share capital is Rs 6,25,00,000 crores.
Please confirm.
Regards
Khushbu
2 Replies
CA Shree Jain
(Chartered Accountant)
(1572 Points)
Replied 29 April 2016
II. Applicability of reporting in the case of unlisted companies
Clause (e) of Sub-section 5 of Section 134 of the 2013 Act has prescribed the Directors’ Statement of Responsibility over establishing adequate internal financial controls and asserting operating effectiveness of such controls of the company only in case of listed companies. It may however be noted that Rule 8(5)(viii) of the Companies (Accounts) Rules, 2014 requires the Board of Directors’ report of all companies to state the details in respect of adequacy of internal financial controls with reference to the “financial statements”. Also, section 143(3) applies to the statutory auditors of all the companies. Hence, it appears that the auditors of even unlisted companies are required to report on the adequacy and operating effectiveness of the internal financial controls over financial reporting.
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