Auditors must plan audits differently
2014-15 is likely to be the year for massive changes to the regulatory framework within which Corporate India operates. Not only will we be operating under a new Companies Act 2013, but are likely to have the new Direct Tax Code (DTC), and possibly a unified Goods and Service Tax (GST).
The three main changes in the Companies Act 2013 that will create a permanent shift are:
Consolidation The need to present consolidated financial statements for all companies including private companies will lead to:
Mandatory audit firm rotation The need to change audit firms for all listed companies over the next three years will lead to:
Corporate Social Responsibility The need to spend 2 per cent of profits or explain inability to do so will lead to:
In addition, among other things, in-house legal counsels have to comply with the documentation of internal financial controls, re-organise boards to comply with independent director and woman director rules.
By Vishesh C Chandiok, National Managing Partner, Grant Thornton India LLP.
The article was published in Business Standard on 06 January 2013.