Chief Financial Officers will henceforth have to attest the financial statements of companies.

Chief Financial Officers will henceforth have to attest the financial statements of companies.

This norm is specified in the new company law, which also gives statutory recognition to the post of CFO as a key managerial person.

Prior to the new law, there was no legal requirement for the CFO to attest the financial statements.

“Now that CFOs have been given statutory recognition, the person occupying that position will need full

expertise on finances and accounting matters. If not, he will face the consequences and remain in that post at his own peril,” Ashok Haldia, Director, PTC Financial Services, said.

G. Ramaswamy, former President of CA Institute, said the new requirement of CFOs attesting financial statements is a welcome step and will improve corporate governance. Many see the move as a regulatory response to Satyam-like corporate frauds that have rocked the country.

Norms for auditors

The new company law, enacted in late August, has tightened the noose on auditors by mandating auditor as well as audit firm rotation.

It has also sought to improve the corporate governance framework by mandating secretarial audits for listed companies, tightening private placement norms.

The new company law has also taken the sheen out of private companies.

“There are no major benefits that a private company has over a public company and there are very few exemptions and privileges,” said Lalit Kumar, Partner, J. Sagar Associates, a law firm.