On 14 December 2015, the Ministry of Corporate Affairs (MCA)
came out with a notification pertaining to reporting of frauds
(Rule 13 to the Companies (Audit and Auditors) Amendment Rules,
20151). This notification also indicated what could be considered
an acceptable threshold value of fraud loss from a reporting
standpoint (individually an amount of rupees one crore or above, in
this case) – an aspect of materiality that was until now left
to the company's discretion.
MCA's notification on 'Reporting of frauds by auditor
and other matters'
A brief outline
The notification states that if an auditor has "reason to
believe" that fraud, which involves or could potentially
involve individually an amount of rupees one crore or above, is
being or has been committed against the company, the auditor needs
to report the matter to the Central Government within 60 days of
his or her knowledge of such a fraud. The process for doing this,
includes reporting the matter to the
