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Govt has directed the auditors to be strict on corporate reporting

The Ministry of Corporate Affairs has issued an order in which the auditors are directed to highlight any lapses in the companies related to frauds, internal control, inventories and outstanding  dues to control ‘fraudulent practices’ in the company.

The main purpose behind this is to strengthen the overall corporate governance standards in the country.

The ministry said in the order dated April  10, that an auditor should mention whether there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and sale of goods and services.

Further if there is any continuing failure to correct major weakness in the internal control system then it should have to be flagged.

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