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The Moving Goalpost For Fraud Reporting By Auditors

The Companies Act, 2013 vests the responsibility to report instances of fraud on auditors.

<div class="paragraphs"><p>The NFRA's ruling against Coffee Day Enterprises Ltd.'s auditors highlights the heightened responsibilities placed on auditors in detecting and reporting fraud incidents under the new guidance. (Image by <ins><a href="https://pixabay.com/users/geralt-9301/?utm_source=link-attribution&amp;utm_medium=referral&amp;utm_campaign=image&amp;utm_content=464641">Gerd Altmann</a></ins> from <ins><a href="https://pixabay.com//?utm_source=link-attribution&amp;utm_medium=referral&amp;utm_campaign=image&amp;utm_content=464641">Pixabay</a>)</ins></p></div>
The NFRA's ruling against Coffee Day Enterprises Ltd.'s auditors highlights the heightened responsibilities placed on auditors in detecting and reporting fraud incidents under the new guidance. (Image by Gerd Altmann from Pixabay)
Traditionally, the expectation from an auditor has been to comment if the financial statements of a company presented a true and fair view of its financial position and not necessarily to detect fraud. The Guidance Note on the Companies (Auditors Report) Order reinforced this expectation and clarified the role of the auditors to report frauds ‘noticed or reported’ during the course of the audit; however, it did not require auditors t...
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