Professional Documents
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3. The reporting of related party loans has been extended to disclosing all terms
and conditions of every loan granted/guarantes given /investments
made/securities given, with further comments on squaring off old facility via
afresh facility.
The disclosures would lead to enhanced transparency and faith in the financial affairs
of the company and also restrain in the unethical corporate practices as they would
be subject to stringent scrutiny and reporting by auditors. .It also aims at enhancing
the overall corporate governance mechanism .
Q: It enhances the scope of the audit profession, what else does it do that businesses
should know?
Q: If these disclosures are stringent for Auditors it will be stringent for CFOs as well?
What do you think how will it impact the CFO's role in this scenario?
With enhanced disclosures requirement CFO’s will have to evaluate the current
practices and mechanism to ensure that the non compliances are minimised.
Q: Do you think this was expected and not a knee jerk reaction?
This is not a knee jerk reaction and are on expected lines .However certain clauses
are onerous.
Q: With CARO 2020, NFRA's audit quality report, and central government's
consultation paper to improve audit quality and independence, how do you think the
environment is changing?
Considering the recent corporate frauds and the banks reporting more NPAS, and
also certain cases of non compliance in reporting by the auditors there is enhanced
attempt by Government to significantly improve the overall quality of reporting by
the auditors on the financial statements of the companies and thereby leading to
greater transparency and faith in the financial affairs of the companies and also an
attempt to improve the overall corporate governance standards.
Q: How is audit profession expected to change post this? What does it mean for the
audit profession?
The audit profession would need to modify and improve the current audit practices
in form of adjusting or devising the audit procedures and also adopting new audit
techniques or tools to be able to evaluate and report on the new reporting
requirements