Big4Guy

Finally India has its answer to Sarbanes Oxley. The amended Clause 49 of the listing agreement aims at transperancy at each stage of a company's functioning. Similar to the concepts in Sarbanes Oxley, Clause 49 stresses on risk management, control framework and IT integration. Let's have a look at some of the key features of the amended Clause 49 and what it has to offer:

1. Enhanced Accountability for CEO CFO - Under the amended clause 49, CEOs and CFOs are required to certify the accuracy of financial reporting, design and operation of internal controls, significant changes in internal controls and disclosure of fraud.

2. Risk Management - Onus is now put on the board of directors of the company to ensure that all significant risks are managed through a control framework and corrective action plans are put in place if required. The risks have to be reviewed on a regular basis to ensure continued compliance.

3. Internal Control Evaluation - Finally clause 49 requires that risks and controls within processes should be identified, validations should be performed for design effectiveness of controls and testing should be done to ensure that controls are operating effectively.