In exercise of powers conferred by sub-sections (1), (2) and (4) of section 139, sub-sections (1) and (2) of section 140, sub-section (3) of section 141, sub-sections (2), (3), (8) and (12) of section 143, sub-section (3) of section 148 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules to amend the Companies (Audit and Auditors) Rules, 2014, namely:-

1. (1) These rules may be called the Companies (Audit and Auditors) Amendment Rules, 2014.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Audit and Auditors) Rules, 2014, after rule 10, the following shall be inserted, namely:-

“10A. For the purposes of clause (i) of sub-section (3) of section 143, for the financial years commencing on or after 1st April, 2015, the report of the auditor shall state about existence of adequate internal financial controls system and its operating effectiveness:

Provided that auditor of a company may voluntarily include the statement referred to in this rule for the financial year commencing on or after 1st April, 2014 and ending on or before 31st March, 2015.”

Internal financial controls requirement: auditor must report on existence and operating effectiveness, with voluntary early inclusion permitted. The amendment inserts Rule 10A requiring the auditor's report to state the existence of adequate internal financial controls and to report on their operating effectiveness, with a provision allowing voluntary inclusion of that statement for an earlier transitional financial year.