Jk | Course Paper

CA Final Course Paper 4 Corporate and Allied Laws

Section A (Company law) Chapter 2

CS. Subrata Kumar Ray

This e–Lecture was Recorded on:

June 18, 2015

1

•This lecture has been delivered by faculty members to supplement the

Study Material, Practice Manual and other content

2 •The views expressed in this lecture are of the Faculty Member.

3

•The content of this video lecture has not been specifically discussed

by the Council of the Institute or any of its Committees and the views

expressed herein may not be taken to necessarily represent the views

of the Council or any of its committees

2

The e–Lectures, PPT, Podcasts

and Video lectures on ICAI

Cloud Campus aim to

supplement the Study Material,

Practice Manual and

Supplementary Study Material

The lecture recordings are made

according to the syllabus and

laws existing/ applicable as on

the date of recording.

Due to changes in law, there is

likely to be some time gap

between these changes and the

recording of updated lectures.

Hence, students are advised to

refer to the Study Material

including Supplementary Study

Material, if any, and other

relevant legislation for latest

provisions/ amendments

required for forthcoming

examination.

3

This e–Lecture was Recorded on:

June 18, 2015

To understand the provisions of the Companies Act on preparation,

presentation, audit and approval of annual accounts.

To understand abnormal situations and legal remedies to such

situation

To appreciate the role of the chief accountant, the auditors , the

directors, the shareholders and regulatory authorities in the whole

process

To know about various types of audit under the Act with its purpose

and who are eligible to be such auditors

4

Every company shall

maintain the proper books

of accounts which must

satisfy the following:(sec.

209 of the old Act and

sec. 128 of the new Act.)

Give true and fair view.(

factual position)

Shall follow accrual basis

and double entry system

of accounting (relate only

to the period for which

accounts are prepared

and presented)

Shall exhibit and explain

the financial position. (Full

Disclosure)

5

There shall be disclosure relating to goods. (goods

sold, purchased etc.)

Shall be prepared in ink and not in pencil.

Shall be as per the accounting standards prescribed

by the Central Government. (sec133)

6

Accounts can be kept in electronic mode accessible in India ;shall be retained

complete and unaltered.

Shall be retained in format in which they were originally generated

the information shall be capable of being displayed in legible form.

Company has to make proper system for storage, retrieval, display and facilitating

print out of the electronic records as required by the audit committee or Board and

shall not be disposed unless legally permitted.

7

On periodic basis, back up has to be taken in

servers physically located in India

Company shall intimate to the Registrar, on an

annual basis at the time of filing the accounts, the

name, internet protocol address and location.

8

Form and contents of financial statement

Shall be in form(s) as may be provided different classes of companies as per

schedule III to the Act.

Banking / insurance/electricity or any such other company prescribed by the

Central Government; may have other form of presenting financial statement

Due regard to the general instructions for preparation of balance sheet and

statement of profit and loss account as mentioned under schedule III.

9

Where company has one or more subsidiaries, joint ventures or

associated companies, it shall, apart from preparing the financial

statement of the company in form AOC 4, , prepare consolidated financial

statement of the holding company and all the subsidiaries in form AOC-1

The holding company shall also attach a separate statement containing

salient features of the financial statement of its subsidiary/ subsidiaries..

CG may exempt any company on the method of presentation of accounts

or consolidation.

The auditors report shall be attached to every Financial Statement.

10

The standards of

accounting

recommended by

ICAI and prescribed

by Central Govt. (CG)

in consultation with

National Advisory

Committee on

Accounting

Standards. (under the

new law this

committee will be

substituted by

National Financial

Authority which shall

be constituted by CG.

However any

accounting standard

(AS) issued by ICAI

shall be deemed to be

Accounting Standard

prescribed by CG

Where accounts do

not comply with AS,

company shall

disclose the

deviations with

reasons, and financial

effects of such

deviation.

11

Central Govt.(CG) may constitute by notification

Functions:

(a) recommend CG on formulation and application of accounting and auditing

standards;

(b) monitor and enforce the compliance of such accounting and auditing