The Companies (Audit and Auditors) Rules, 2014

Rule 13 Reporting of frauds by auditor and other matters

Chapter: III · The Auditor's Report and Fraud Reporting

1(1) If an auditor of a company, in the course of the performance of his duties as statutory auditor, has reason to believe that an offence of fraud, which involves or is expected to involve individually an amount of rupees one crore or above, is being or has been committed against the company by its officers or employees, the auditor shall report the matter to the Central Government.

1(2) The auditor shall report the matter to the Central Government as under:-

1(a) the auditor shall report the matter to the Board or the Audit Committee, as the case may be immediately but not later than two days of his knowledge of the fraud, seeking their reply or observations within forty-five days;

1(b) on receipt of such reply or observations, the auditor shall forward his report and the reply or observations of the Board or the Audit Committee along with his comments (on such reply or observations of the Board or the Audit Committee) to the Central Government within fifteen days from the date of receipt of such reply or observations;

1(c) in case the auditor fails to get any reply or observations from the Board or the Audit Committee within the stipulated period of forty-five days, he shall forward his report to the Central Government along with a note containing the details of his report that was earlier forwarded to the Board or the Audit Committee for which he has not received any reply or observations;

12(d) the report shall be filed electronically in form ADT-4.

1(3) In case of a fraud involving lesser than the amount specified in sub-rule (1), the auditor shall report the matter to Audit Committee constituted under section 177 or to the Board immediately but not later than two days of his knowledge of the fraud and he shall report the matter specifying the following:-

1(a) Nature of Fraud with description;

1(b) Approximate amount involved; and

1(c) Parties involved.

1(4) The following details of each of the fraud reported to the Audit Committee or the Board under sub-rule (3) during the year shall be disclosed in the Board's Report:-

1(a) Nature of Fraud with description;

1(b) Approximate Amount involved;

1(c) Parties involved, if remedial action not taken; and

1(d) Remedial actions taken.

1(5) The provision of this rule shall also apply, mutatis mutandis, to a Cost Auditor and a Secretarial Auditor during the performance of his duties under section 148 and section 204 respectively.

1. Rule 13 subs. by G.S.R. 972(E), dated 14th December, 2015 (Companies (Audit and Auditors) Amendment Rules, 2015), w.e.f. 14th December, 2015, for the former rule 13.

2. Clause (d) subs. by G.S.R. 359(E), dated 30th May, 2025 (Companies (Audit and Auditors) Amendment Rules, 2025), w.e.f. 14th July, 2025, for the former clause (d), which read: "the report shall be sent to the Secretary, Ministry of Corporate Affairs in a sealed cover by Registered Post with Acknowledgement Due or by Speed Post followed by an e-mail in confirmation of the same".

3. Former clause (e), which read: "the report shall be on the letter-head of the auditor containing postal address, e-mail address and contact telephone number or mobile number and be signed by the auditor with his seal and shall indicate his Membership Number", omitted by G.S.R. 359(E), dated 30th May, 2025 (Companies (Audit and Auditors) Amendment Rules, 2025), w.e.f. 14th July, 2025, consequential to electronic filing under clause (d).

4. Former clause (f), which read: "the report shall be in the form of a statement as specified in Form ADT-4", omitted by the same G.S.R. 359(E), dated 30th May, 2025, w.e.f. 14th July, 2025, consequential to clause (d)'s substitution.

[13. Reporting of frauds by auditor and other matters:

(1) If an auditor of a company, in the course of the performance of his duties as statutory auditor, has reason to believe that an offence of fraud, which involves or is expected to involve individually an amount of rupees one crore or above, is being or has been committed against the company by its officers or employees, the auditor shall report the matter to the Central Government.

(2) The auditor shall report the matter to the Central Government as under:-

(a) the auditor shall report the matter to the Board or the Audit Committee, as the case may be immediately but not later than two days of his knowledge of the fraud, seeking their reply or observations within forty-five days;

(b) on receipt of such reply or observations, the auditor shall forward his report and the reply or observations of the Board or the Audit Committee along with his comments (on such reply or observations of the Board or the Audit Committee) to the Central Government within fifteen days from the date of receipt of such reply or observations;

(c) in case the auditor fails to get any reply or observations from the Board or the Audit Committee within the stipulated period of forty-five days, he shall forward his report to the Central Government along with a note containing the details of his report that was earlier forwarded to the Board or the Audit Committee for which he has not received any reply or observations;

[(d) the report shall be filed electronically in form ADT-4.]

* * * * *

(3) In case of a fraud involving lesser than the amount specified in sub-rule (1), the auditor shall report the matter to Audit Committee constituted under section 177 or to the Board immediately but not later than two days of his knowledge of the fraud and he shall report the matter specifying the following:-

(a) Nature of Fraud with description;

(b) Approximate amount involved; and

(4) The following details of each of the fraud reported to the Audit Committee or the Board under sub-rule (3) during the year shall be disclosed in the Board's Report:-

(a) Nature of Fraud with description;

(b) Approximate Amount involved;

(d) Remedial actions taken.

(5) The provision of this rule shall also apply, mutatis mutandis, to a Cost Auditor and a Secretarial Auditor during the performance of his duties under section 148 and section 204 respectively.]

1. Rule 13 subs. by G.S.R. 972(E), dated 14th December, 2015 (Companies (Audit and Auditors) Amendment Rules, 2015), w.e.f. 14th December, 2015, for the former rule 13.
2. Clause (d) subs. by G.S.R. 359(E), dated 30th May, 2025 (Companies (Audit and Auditors) Amendment Rules, 2025), w.e.f. 14th July, 2025, for the former clause (d), which read: "the report shall be sent to the Secretary, Ministry of Corporate Affairs in a sealed cover by Registered Post with Acknowledgement Due or by Speed Post followed by an e-mail in confirmation of the same".
3. Former clause (e), which read: "the report shall be on the letter-head of the auditor containing postal address, e-mail address and contact telephone number or mobile number and be signed by the auditor with his seal and shall indicate his Membership Number", omitted by G.S.R. 359(E), dated 30th May, 2025 (Companies (Audit and Auditors) Amendment Rules, 2025), w.e.f. 14th July, 2025, consequential to electronic filing under clause (d).
4. Former clause (f), which read: "the report shall be in the form of a statement as specified in Form ADT-4", omitted by the same G.S.R. 359(E), dated 30th May, 2025, w.e.f. 14th July, 2025, consequential to clause (d)'s substitution.