Question

For the purpose of Sub-Section (12) of Section 143 of the Companies Act 2013, in case the auditor has sufficient reason to believe that an offence involving fraud is being or has been committed against the company by officers or employees of the company, he shall report the matter to the Central Government immediately but not later than ______ of his knowledge and after following the necessary procedure. 
1. sixty days
2. ninety days
3. eighty days
4. seventy days

Answer 1

Correct Answer - Option 1 : sixty days

The correct answer is sixty days

Frauds: Deliberate, illegal manipulation of financial reports and data which is done in order to disguise the true financial position of a company. This is done with the aim of pleasing shareholders and investors by representing better financial position, attempting unlawful tax evasions, gaining competitive advantage in the market etc.

Auditor: An auditor is an authorised person who verifies and reviews the financial records and financial statements of a company and ensures that they are prepared in accordance with the norms. He also checks whether any tampering or manipulation has been done with the financial data with the aim of hiding any fraud or malpractice within the company. 

If the auditor believes or detects any such fraud, his duty is to report to the Central Government within 60 days of his knowledge. He is also responsible reporting the matter to the company’s Board or the Audit Committee within 2 days.