The Ministry of Corporate Affairs (MCA) vide notification dated May07,2018 has issued the Companies (Audit and Auditors) Amendment Rules, 2018 further amending the principal rules Companies (Audit and Auditors) Rules, 2014.
Vide this notification:
· Explanation of Rule 3(a) related to ratification of appointment of auditors has been omitted.
· Proviso to Rule 3(7) related to ratification of appointment of auditors in every annual general meeting till the sixth such meeting by way of passing of an ordinary resolution has been omitted.
· Rule 9 related to Liability to devolve on concerned partners only has been omitted.
· Rule 10A has been substituted which reads as- the report of the auditor shall state about existence of internal financial controls with reference to financial statements system.
· Rule 14 (i)(a) has been substituted which shall be read as
“The Board shall appoint an individual, who is a cost accountant or a firm of cost accountants in practice, as cost auditor on the recommendations of the Audit committee, which shall also recommend remuneration for such cost auditor.”
· Rule 14(b) has been substituted as in the case of other companies which are not required to constitute an audit committee, the Board shall appoint an individual who is a cost accountant or a firm of cost accountants in practice as cost auditor and the remuneration of such cost auditor shall be ratified by shareholders subsequently.