Internal Financial Controls (IFCs) are the systems, policies, and procedures implemented by a company to ensure that its financial reporting is accurate and reliable, assets are protected, and the risks of fraud and error are minimized. Key Features of Internal Financial Controls: Accuracy of FinancRead more
Internal Financial Controls (IFCs) are the systems, policies, and procedures implemented by a company to ensure that its financial reporting is accurate and reliable, assets are protected, and the risks of fraud and error are minimized.
Key Features of Internal Financial Controls:
- Accuracy of Financial Reporting:
IFCs help ensure that accounting records and financial statements are prepared correctly. - Asset Protection:
They safeguard company assets from misuse or theft. - Fraud Prevention:
Robust controls help prevent fraudulent activities. - Operational Efficiency:
These systems streamline processes, reducing errors and inefficiencies.
Are They Mandatory?
- For Listed Companies:
Yes, all listed companies are required to have strong internal financial controls. Their effectiveness must be reported in the Director’s Report under Section 134 of the Companies Act, 2013. - For Other Companies:
While the requirement is more stringent for listed companies, other companies—especially those meeting certain thresholds for paid-up capital, turnover, or net worth—are also expected to establish adequate internal financial controls. Even if not strictly mandatory for every company, implementing IFCs is considered a best practice for good corporate governance.
Conclusion
Internal Financial Controls are essential tools for ensuring the integrity of financial operations. They are a mandatory requirement for listed companies and are strongly recommended for all companies to promote transparency, safeguard assets, and manage risks effectively.
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Section 24(b) of the Income Tax Act allowed the deduction of Interest paid on money borrowed for the purpose of purchase, repairs, renovation, etc. of house. However, it is not necessary that the money should have been borrowed as a home loan or from any banking institution. Interest paid to your fRead more
Section 24(b) of the Income Tax Act allowed the deduction of Interest paid on money borrowed for the purpose of purchase, repairs, renovation, etc. of house. However, it is not necessary that the money should have been borrowed as a home loan or from any banking institution.
Interest paid to your friends and relatives in respect of money borrowed for the purposes specified above can also be claimed under section 24(b).
But the actual use of the personal loan should be only for the purpose of the purchase, repairs, renovation, etc. To prove this, the personal loan should be taken through a bank account and the expenditures made for the above purpose and payment of interest should also be made from the bank account.
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