Mandatory use of Accounting Software having Audit Trail

FY commencing from 1st April, 2021 every Company shall use Accounting Software having feature to record audit trail of each and every transaction, creating an edit log of changes made in books of account along with the date when such changes were made & ensuring that the audit trail cannot be disabled.


Amendments in Schedule III from 1st day of April, 2021

As per the amendments many new disclosure has been mandatory as detailed below:

  1. Disclosure of Shareholding of Promoters
  2. Trade Payables ageing schedule with age 1 year, 1-2 year, 2-3 year & More than 3 years
  3. Reconciliation of the gross and net carrying amounts of each class of assets
  4. Trade Receivables ageing schedule with age 1 year, 1-2 year, 2-3 year & More than 3 years
  5. Detailed disclosure regarding title deeds of Immovable Property not held in name of the Company.
  6. Disclosure regarding revaluation & CWIP ageing.
  7. Loans or Advances granted to promoters, directors, KMPs and the related parties
  8. Details of Benami Property held
  9. Reconciliation and reasons of material discrepancies, in quarterly statements submitted to bank and books of accounts.
  10. Disclosure where a company is a declared wilful defaulter by any bank or financial Institution
  11. Relationship with Struck off Companies
  12. Pending registration of charges or satisfaction with Registrar of Companies
  13. Compliance with number of layers of companies
  14. Disclosure of 11 Ratios

(a) Current Ratio,

(b) Debt-Equity Ratio,

(c) Debt Service Coverage Ratio,

(d) Return on Equity Ratio,

(e) Inventory turnover ratio,

(f) Trade Receivables turnover ratio,

(g) Trade payables turnover ratio,

(h) Net capital turnover ratio,

(i) Net profit ratio,

(j) Return on Capital employed,

(k) Return on investment.

The company shall explain the items included in numerator and denominator for computing the above ratios. Further explanation shall be provided for any change in the ratio by more than 25% as compared to the preceding year.

15. Compliance with approved Scheme(s) of Arrangements

16. Utilisation of Borrowed funds and share premium

17. Details of transaction not recorded in the books that has been surrendered or disclosed as income in the tax assessments

18. Disclosure regarding Corporate Social Responsibility

19. Details of Crypto Currency or Virtual Currency


Other Matters to be Included in Auditors Report

  1. Reporting regarding advances, loans & Investment other than disclosed in notes to accounts.
  2. Receiving of funds for further lending or investing other than disclosed in notes to accounts.
  3. Dividend declared or paid is in compliance of section 123 of CA, 2013.
  4. Comment of use of Accounting Software having Audit Trail & other rules therein.




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