Zion Ltd., is one of the listed leading companies in the pharmaceutical sector. Meta Ltd. acquired 75% Equity shares of Zion Ltd. five years ago and is being retained by Meta Ltd. till date. The shareholding pattern of M

It is the duty of the auditor to verify whether the financial statements are prepared in accordance with the applicable financial reporting framework and to express an opinion on the financial statements audited by him as to whether the financial statements provide a true and fair view on the financial position of the company. If during the course of the audit, the auditor comes across fraudulent activities or offence involving the fraud, he shall report the same to the management of the company and Central Government as appropriate. Section 143(12) of Companies Act, 2013 and Companies (Audit and Auditors) Rules 2014 lays down the procedure for reporting of fraud. The same has been explained below- Amount involved in fraud is more than ₹ 1 Crore If during the course of audit, the auditor has reason to believe that an offence of fraud involving an amount exceeding ₹ 1 crore or more is being or has been committed against the company by the officers or employees of the company, then the auditor shall report the matter to the Central Government. The matter shall be reported to the Central Government in the following manner- The auditor is required to report fraud to the management within 2 days from the date of his knowledge of fraud, asking them to reply within a period of 45 days. Upon receipt of reply from the management, the auditor shall forward his report along with reply from the management and his comments on such reply to the Central Government within a period of 15 days from the date of receipt of such reply from the management. If the auditor fails to get any response from the management within a period of 45 days, he shall forward his report to the Central Government along with the details of the report earlier forwarded to the management for which he has not received any reply. The report shall be forwarded to the Secretary, Ministry of Corporate Affairs in a sealed cover either by registered post or by speed post. It shall be followed by an email in confirmation of the same. Such a report forwarded shall be on the letter head of the auditor containing the postal address, email address and telephone number. The report shall also be signed and sealed and shall indicate his membership number. The report shall be in form ADT-4. Amount involved in fraud is less than ₹ 1 Crore If the amount involved in fraud is less than ₹ 1 crore, the auditor shall report the matter to the audit committee or Board within a period of 2 days from the date of his knowledge of fraud. The report shall include the following- Nature of Fraud Amount involved in fraud Parties involved Further, in case of fraud in which the amount involved is less than ₹ 1 crore, the board report shall include the following- Nature of Fraud Amount involved in fraud Parties involved Remedial Actions Taken Reporting Requirements under CARO 2020 CARO 2020 provides for specific requirements for reporting of fraud under clause 11. The same has been provided below- Has there been any fraud by the company or any fraud done on the company. If any such fraud has been noticed or reported any time of the year. If yes, nature and amount involved have to be reported. Whether the auditors of the company have filed a report in Form ADT-4 with the Central Government as prescribed under the Companies (Audit and Auditors) Rules, 2014.