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CA Inter IPCC Audit Amendment Nov 21 Exams

Amendments relevant to Audit between 1st Nov 2020 & 30th April 2021

Company Audit
Amendments in Definition of Small Company
 Sec 2 (85) Amended on 1st April 21

Limits Changed
 Paid up capital limit of 50 lakhs is increased to 2 crores
 Previous year turnover limit of Rs 2 crore is increased to 20 crores

Amendments in Company Accounts Sec 128 to Section 138

 Sec 128 (1) Amended on 24th March 21 & 1st April 21
&
Company Sec 128(1) gives power to central government to prescribe rules regarding
Account Rules maintenance of books of accounts in electronic medium.

Accounting Under these rules CG has issued new requirement with respect to accounting
Software with software, which is applicable from 1st April 2022
Audit Trail
Proviso added in rule.
Provided that for the financial year commencing on or after the 1st day of April,
2022, every company which uses accounting software for maintaining its books
of account, shall use only such accounting software which has a
 feature of recording audit trail of each and every transaction (Edit
History of Each Transaction),
 creating an edit log of each change made in books of account along
with the date (Log showing changes made to books of accounts) when
such changes were made and
 ensuring that the audit trail (above 2 things) cannot be disabled.
 Sec 129 (1) Amended on 24th March 21
& Schedule III
Schedule III is issued under Sec 129 (1)
Changes are introduced in schedule III, on 24th March, these changes are not core
part of audit syllabus, changes related to disclosure of funds given and funds
received are relevant for audit.
 Sec 134 (3) Amended on 24th March 21
&
Company Sec 134 (3) provides matters to be specified in BOD report. Clause (q) gives
Account Rules power to central government to specify additional matters in rules.

Additional Under these rules CG has issued 2 additional requirements to be specified in BOD
Reporting report.
Requirements
in BOD Report  (xi) the details of
o application made or any proceeding pending under the
Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the
year
o along with their status as at the end of the financial year.

 (xii) the details of difference between amount of the

o valuation done at the time of one-time settlement and
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o the valuation done while taking loan from the Banks or

Financial Institutions (So it is change in value of security which
was offered for taking such loan)
o along with the reasons thereof.

Amendments in Section 138 to 148

 Sec 140 Amended on 12th Dec 2020
Penalty
Penalty
 Non-Compliance will lead to penalty of 50,000 or remuneration of
Reduced for
non auditor whichever is lower.
compliance of  In case of continuing failure, with a further penalty of 500 per day
resignation after the first day of non-compliance during which such failure
related continues, subject to a maximum of 2,00,000
communicatio
n
 Sec 143 (3) Amended on 24th March 21

Rule 11 Sec 143 (3) (j) gives power to central government to prescribe additional matters
Amendment to be specified in audit report

Under above provision Rule 11 of Company Audit & Auditor’s Rule 2014 is issued
by CG. Earlier there were 3 points now it has increased to 6 points

See Chart On Next page

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CA Ravi Taori Auditguru.in

 Sec 143 (15) Amended on 12th Dec 2020

Fine
Penalty of  For Listed Company Rs 5,00,000
Fraud  For Any Other Company 1,00,000
Reporting
Reduced
 Sec 147 Change in punishment for officers of the company - Punishment of 1 year
imprisonment is removed.
Penalty
Change in punishment for auditor of the company – Section 143 is removed
Reduced
from the list which is considered for non-compliance and punishment.

Bank Audit (Only For New Course)

Above changes as given in company audit are relevant for banking companies also under bank
audit chapter.