ICAI to soon issue guidance on fraud reporting for members

Boosting efforts to tackle misdoings at companies, accounting watchdog ICAI will soon come out with guidance for its members on reporting fraud.
The move comes against the backdrop of the new Companies Act putting more responsibilities on auditors in terms of reporting fraudulent activities at firms.
Institute of Chartered Accountants of India (ICAI) President K Raghu said it would soon issue guidance for its members on fraud reporting soon.
ICAI's Auditing & Assurance Standards Board has already set up an expert group to look into the fraud reporting provisions in the new law.
The expert group will examine the "fraud reporting provisions, identify implementation issues and develop appropriate implementation guidance for the auditors at the earliest," Raghu said.

Under the Companies Act, 2013, auditors are required to inform the government about instances of frauds that they come across at companies.

In case the statutory auditor has sufficient reason to believe that an offence involving fraud is being or has been committed against the company by its officers or employees, it has to be reported to the government within 60 days of coming to know about it.
According to the institute, the new companies law has placed "considerable responsibility" on the statutory auditors and is "quite demanding" from their perspective.
In recent times, many instances of corporate misdoings and financial fraud have come to light.