As per the provisions of Section 16 of the Companies (Amendment) Act, 1999 the provisions of Section 227 of the Companies Act, 1956 have been amended with effect from 31.10.1998, with an obligation on the part of the auditors of the companies to include a para in their report under section 227 of the Act to the members of the company, stating whether in their opinion the Profit & Loss Account and the balance Sheet comply with accounting standards referred to in Sub-section (3C) of Section 211. It has, however, been observed from the published Balance Sheets of a number of companies as at 31.3.1999 that such a certification by the auditors is missing in their reports.

2. Auditors of the companies are, therefore, advised to ensure that such a clause is added to their reports to the members failing which this Department will be constrained to take penal action against the auditors as well as refer the matter to the Institute of Chartered Accountants of India for initiating disciplinary proceedings against them.