One of the significant implications of companies act 2013 is reporting responsibilities of directors and auditors with regard to internal financial controls. The directors are responsible for laying down the internal financial controls to be followed by the company and also to ensure that such controls are adequate and operating effectively. In addition, directors are required to specifically include a statement regarding this in their board report.

Internal Financial Control is applicable to all the companies, Related exemption from Internal Financial Control has been given by MCA by issuing notification dated 13th June 2017 to following companies i.e :

•  One person Company (OPC) or a Small Company; or
•  Company having turnover less than Rs. 50 Crores as per latest audited financial statement or which is having aggregate borrowings from banks or financial institutions or any body corporate at time during the financial year less than Rs. 25 Crore.

Internal financial controls are defined as per companies act 2013 as policies and procedures adopted by the company and its management for ensuring:

• For orderly and efficiently conduct of the business according to the company policy.
• Ensuing safeguarding of company assets.
• To prevention and detection of frauds and errors Maintaining accuracy and completeness of accounting records and
• In time preparation of reliable financial information.