Audit Trail
In 2021, the Ministry of Corporate Affairs (MCA) introduced a significant amendment under the Companies Act, 2013 to enhance transparency and accountability in financial reporting. The amendment made it mandatory for companies to use accounting software that records an audit trail—a detailed log of all transactions and changes made in the books of accounts. Effective from April 1, 2023 (after deferments), this rule ensures that every transaction is tracked chronologically, including edits, deletions, and authorisations, helping detect fraud and errors. It aligns with global best practices and supports better compliance, governance, and integrity in financial records.
Audit Committee under Companies Act 2013 & Listing Regulations
Audit Committee is required to be constituted under Section 177 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules of 2014 as well as SEBI (LODR) 2015. An audit committee is a governing body responsible for overseeing financial reporting and ensuring compliance with statutory audit requirements. Its primary duties include promoting accountability, ensuring adherence to regulatory standards, and facilitating transparent financial disclosures.
Appointment of Directors
As per Section 2(34) of Companies Act,2013 – “Director means a director appointed to the Board of a company.”
In common words, a director is an individual appointed to oversee and manage the overall operations, governance, and strategic direction of a company. They hold a position of trust and authority, making key decisions that shape the company’s policies, financial health, and long-term goals. Directors are legally responsible for ensuring that the company operates in compliance with all applicable laws and regulations, safeguards the interests of its shareholders and stakeholders, and upholds ethical business practices.
ADT-1: Information to Registrar for appointment of Auditor
Under Section 139 of the Companies Act, 2013, it is mandatory for a company to notify RoC regarding the appointment of an auditor.
ADT-3 (Notice of resignation by the Auditor)
The auditor appointed may resign at any time due to any reason before the expiry of his term of office. In doing so he has to follow the provisions as laid in the Act.
Removal of Statutory Auditor through ADT-2
The auditor can be removed from his office before the expiry of his term only by passing a special resolution and after obtaining prior approval of Central Govt.
PAS-6 : Reconciliation of Share Capital Audit Report
Every unlisted public company is required to submit a half-yearly Reconciliation of Share Capital Audit Report in PAS-6 within 60 days from the conclusion of each half year
NDH-3
Every Nidhi Company is required to furnish half yearly return to the Registrar in ndh-3 within 30 days of the conclusion of each half year
MSME-1
The Order states that all Companies who get supplies of goods or services from MSME and whose payment exceeds 45 days from the date of acceptance of goods/deemed acceptance should submit a half yearly return to MCA in MSME-1
DIR-3 KYC / DIR-3 KYC-WEB
Every individual who has DIN on March 31st of a financial year has to file e-form DIR – 3 KYC by September 30 of next financial year