ICAI Hand book on Audit of CSR Activities
Under the provisions of section 135 of the Companies Act 2013 its is mandatory for Companies to take up Corporate Social Responsibility (CSR) projects on various social welfare activities provided and/or notified by MCA.
The ICAI has released a hand book on audit of CSR activities to provide detailed guidance on the auditing aspects of CSRs expenditure made by the companies and the roles and responsibilities of the Chartered Accountants. The publication seek to provide guidance to the auditors in complying with auditing requirements as per the Companies (Company Social Responsibilities Policy) Rules, 2014.
The Companies Act 2013 and rules made thereunder require that every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee.
Further such companies are required to spend, in every financial year at least 2% of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.
Though the audit of CSR activities is not specifically provided , the ICAI Guidance note on CSR activities lists out the various provisions of the Companies Act 2013 and rules made thereunder requiring monitoring and reporting requirements and the responsibility of the auditors.
The guidance note also gives the reporting requirement related to CSR under CARO 2020.
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