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Fraud Reporting under Companies Act, 2013


Vedanta Deshika

2014-09-09

CARO ,2003 vide clause 21 contained provisions relating to fraud . However, it was just limited to inquiry about frauds by and on the company which were reported. CARO required auditor to just state the nature of fraud , amount involved.

The Erstwhile Companies Act  1956 has been replaced with Companies Act 2013. The New act casts a few more reporting responsibilities on Auditors. One such area is Fraud reporting. Lets try to understand in brief what are some nuiances pertaining to Fraud reporting.  

Sec 143(12) read with Rule 10.13 provides that any fraud noticed by the auditor shall be

- reported to the Central Government within 60 days

He has to seek BOD/Audit committee reply within 45 days . Within next 15 days he has to prepare his replies and send the report to Central Government. 

The report shall be sent to Secretary, MCA through RPAD/Speed Post

The report shall be on the letter head of the Auditor/Firm

The Form prescribed for the purpose is ADT-4.