1 / 1

Importance of ICFR

Corporate governance in India has heightened the importance of Internal Controls over Financial Reporting (ICFR), made mandatory under the Companies Act, 2013. ICFR is more than complianceu2014it ensures accurate financial reporting, prevents fraud, and strengthens investor confidence. It covers processes for initiating, recording, and reporting transactions, including approvals, reconciliations, segregation of duties, and IT controls. Strong ICFR assures stakeholders that financial statements are reliable and compliant with accounting standards.

Nikhil139
Download Presentation

Importance of ICFR

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. IMPORTANCE OF ICFR Purpose of ICFR Audit – It evaluates a company’s internal controls over financial reporting to determine if any deficiencies could lead to material misstatements. Audit Process – Auditors use testing and observation to assess whether controls are properly designed and operating effectively throughout the reporting period. Stakeholder Confidence – An unqualified ICFR opinion boosts trust among investors, lenders, and other stakeholders in the company’s financial reporting. Organizational Benefits – Preparing for ICFR audits helps identify control gaps, uncover inefficiencies, and drive improvements in systems and processes. CHALLENGES Lack of proper documentation of controls makes it difficult for auditors to evaluate effectiveness. Poor IT controls or weak financial system integration can undermine otherwise effective manual controls. Dependence on manual processes increases the risk of control failures. Small and medium businesses often lack in-house expertise for ICFR implementation. Hiring experienced professionals for control testing and risk assessment adds to the cost. Resistance to change slows down the adoption of ICFR practices. Additional compliance requirements are often perceived as burdensome by employees and management. At SKMC Global helps businesses comply with ICFR under the Companies Act, 2013 through effective control design, documentation, and testing for smooth compliance. +91 989-125-5499 info@skmcglobal.com www.skmcglobal.com

More Related