The revised Companies Bill, which is expected to be introduced in the winter session of Parliament, has limited the number of companies an auditor can serve to 20. It has also brought in more clarity on criminal liability of auditors.
An official release said the amendments are expected to make the Companies Bill, 2011 "serve still better the interests of the corporates, investors and other stakeholders".
"The proposed legislation will bring the law on the subject of corporate functioning and regulation in tune with the global best practices so that there is further improvement in corporate governance in the country through enhanced accountability and transparency," the release said.
A provision has been introduced to make expenditure on Corporate Social Responsibility (CSR) mandatory. If companies are unable to meet CSR norms, they will have to give explanations. Also, companies should give preference to local areas while spending on CSR activities.
According to the release, the new proposals include annual ratification of appointment of auditors for five years and introduction of a new clause related to offence of falsely inducing banks for obtaining credit. (MORE)
