ICAI Forensic Accounting & Investigation Standards (FAIS 100–500), Sections 213 & 447 of Companies Act, 2013 & Sections 43, 45, 50, 66 of IBC 2016

Forensic & Fraud Investigation

Forensic accounting, corporate fraud investigation, fund siphoning tracing, and insolvency dispute audits conducted under ICAI FAIS standards, Companies Act Section 213/447, and IBC 2016 PUFE avoidance transaction reviews (Sections 43, 45, 50, 66) with NCLT evidentiary validity.

CA Due Diligence

Official Portal Filing

State Stamp Advisory

Forensic & Fraud Investigation Statutory Advisory

Statutory Filing

MCA & Tax Practice

Relevant RegulatorIBBI & Ministry of Corporate Affairs, Government of India

Insolvency and Bankruptcy Board (IBBI) & NCLT Portals

The official Government of India portals for filing Avoidance Transaction applications under the Insolvency and Bankruptcy Code (IBC 2016), tracking NCLT case proceedings (nclt.gov.in), and authenticating forensic reports via ICAI UDIN.

Visit Official Website

STATUTORY OVERVIEW

Forensic Accounting, Fraud Risk Investigation & Dispute Resolution

When financial discrepancies, suspected corporate embezzlement, asset siphoning, or commercial disputes emerge, conventional audit procedures are insufficient. Forensic and Investigative Audits deploy specialized forensic accounting, data analytics, transaction reconstruction, and digital evidence gathering to identify illicit schemes, quantify damages, and uncover the root causes of financial manipulation. Guided by the Forensic Accounting and Investigation Standards (FAIS 100 to 500) established by the Digital Accounting and Assurance Board (DAAB) of the Institute of Chartered Accountants of India (ICAI), our forensic practice delivers legally admissible evidence suitable for regulatory bodies, Resolution Professionals, and judicial tribunals.

Statutory & Practice Summary • At-A-Glance

ICAI UDIN Authentication Mandate

Governing Framework

ICAI Forensic Accounting & Investigation Standards (FAIS 100–500), Sections 213 & 447 of Companies Act, 2013 & Sections 43, 45, 50, 66 of IBC 2016

Regulatory Authority

Insolvency and Bankruptcy Board of India (IBBI), Serious Fraud Investigation Office (SFIO) & National Company Law Tribunal (NCLT)

Professional Assurance

Chartered Accountants Attestation under ICAI Standards & Code of Ethics

DOCUMENTATION MATRIX

Mandatory Documents Checklist

Self-attested scanned copies required

1. Promoters / Partners / Directors KYC

✓Board of Directors / Resolution Professional / Committee of Creditors (CoC) formal mandate letter
✓Confidentiality and Non-Disclosure Agreement (NDA) with strict forensic privacy protocols
✓Chain-of-Custody logs documenting physical and electronic seizure of digital evidence

2. Registered Office & Premises Proof

✓Principal Place of Business and corporate office registry records under investigation
✓Bank Account Mandates, authorized signatory resolutions, and internet banking transaction logs

3. Specific Statutory Declarations & Enclosures

•Complete historical General Ledgers, ERP database dumps (raw SQL/SAP files), and journal entry books
•Bank Account Statements of all operative, current, loan, and overseas accounts covering the look-back period
•Vendor and Customer Master alteration logs, purchase orders, delivery challans, and e-way bill movement data
•Related party transaction disclosures under Section 188 of Companies Act and Schedule III notes
•Electronic mail archives, hard drive disk images (E01 format), and telecommunication logs under FAIS chain-of-custody
•Audited financial statements, Tax Audit Reports (Clause 31 loans), and income tax scrutiny assessment records

PROCEDURAL ROADMAP

Step-by-Step Filing & Approval Process

Structured execution roadmap managed by our Chartered Accountants from pre-filing due diligence to certificate allotment.

01Days 1 - 3

Mandate, Scope & Forensic Preservation

Defining investigation terms, establishing forensic chain of custody, securing bit-stream disk images, and freezing transaction databases.

02Days 4 - 15

Data Analytics & Fund Flow Reconstruction

Executing Benford's Law analysis, fuzzy string matching across vendor masters, reconstructing multi-tier banking loops, and mapping round-tripped capital.

03Days 16 - 25

PUFE / Fraud Evaluation & Substantive Testing

Evaluating transactions under IBC Sections 43 (Preferential), 45 (Undervalued), 50 (Extortionate), and 66 (Fraudulent/Wrongful Trading) against statutory look-back periods.

04Final Week

Forensic Investigation Report & Legal Testimony

Issuing the comprehensive Forensic Investigation Report with UDIN, annexing electronic certificates under Bharatiya Sakshya Adhiniyam, and presenting testimony before NCLT.

Fund Diversion, Round-Tripping & Siphoning Investigations

Practice Scope & Statutory Guidance

We trace transaction trails across complex multi-layered banking networks, shell corporate entities, and related-party accounts to detect the siphoning of borrowed capital, unauthorized loans, unrecorded revenues, and circular trading schemes. We examine bogus expenditure claims, unexplained cash credits under Sections 78 through 82 of the Income-tax Act, 2025 (formerly Sections 68, 69, 69A, and 69C of the Income-tax Act, 1961), and investigate corporate fraud under Section 213 and Section 447 of the Companies Act, 2013.

IBC 2016 Avoidance Transactions Review (PUFE Audits)

Practice Scope & Statutory Guidance

Under the Insolvency and Bankruptcy Code (IBC 2016), Resolution Professionals and Committee of Creditors (CoC) require specialized forensic transaction audits to identify avoidance transactions during statutory look-back periods. We conduct exhaustive evaluations under Section 43 (Preferential Transactions), Section 45 (Undervalued Transactions), Section 49 (Transactions Defrauding Creditors), Section 50 (Extortionate Credit Transactions), and Section 66 (Fraudulent or Wrongful Trading), compiling robust evidentiary dossiers for filing before the National Company Law Tribunal (NCLT).

Procurement Fraud, Kickback Detection & Digital Litigation Support

Practice Scope & Statutory Guidance

We investigate vendor collusion, ghost suppliers, bid-rigging, falsified purchase orders, unauthorized discounts, and off-book kickbacks. Our digital forensic examiners collect and preserve electronic evidence with strict chain-of-custody protocols compliant with statutory electronic evidence admissibility certifications under the Bharatiya Sakshya Adhiniyam, 2023 (formerly Section 65B of the Indian Evidence Act, 1872) for submissions before judicial courts, arbitration panels, SFIO, and enforcement agencies.

STATUTORY MATRIX

Statutory Provisions & Regulatory Comparative Matrix

Comparative analysis of governing sections under the new framework alongside legacy statutory references.

Investigation Category / Transaction Type	Governing Statute & Statutory Section	Statutory Look-Back Period & Essential Legal Ground
Preferential Transactions (Preference to Creditors)	Section 43 of Insolvency & Bankruptcy Code, 2016	Look-back period of 2 years for related parties; 1 year for non-related parties. Transfers putting a creditor in a beneficial position.
Undervalued Transactions (Asset Disposal below Fair Value)	Section 45 of Insolvency & Bankruptcy Code, 2016	Look-back period of 2 years for related parties; 1 year for non-related parties. Gift or transfer for consideration significantly less than value.
Extortionate Credit Transactions (Usurious Lending)	Section 50 of Insolvency & Bankruptcy Code, 2016	Look-back period of 2 years preceding insolvency commencement date. Loans with unconscionable interest rates or exorbitant terms.
Fraudulent / Wrongful Trading (Director Liabilities)	Section 66 of Insolvency & Bankruptcy Code, 2016	No look-back limitation period. Business conducted with intent to defraud creditors; directors held personally liable without limitation.
Corporate Fraud & Serious Misconduct	Section 213 read with Section 447 of Companies Act	Imprisonment from 6 months up to 10 years, plus fine equal to 100% to 300% of the amount involved in fraud.

ONGOING GOVERNANCE

Mandatory Post-Registration Compliances

Failing to complete statutory post-incorporation actions carries steep daily penalties. Our CA firm manages continuous compliance:

Sections 43, 45, 50, 66 IBC ApplicationWithin 135 days of CIRP initiation (IBC)

NCLT Avoidance Application Filing (Form NCLT-1)

Filing the forensic audit report as primary documentary evidence before the National Company Law Tribunal for recovery of siphoned assets.

Certificate under Section 63 BSA 2023Simultaneous with Report Submission

Electronic Evidence Certificate Issuance

Executing statutory certificate under Bharatiya Sakshya Adhiniyam, 2023 (formerly Section 65B of Evidence Act) verifying hash integrity of digital files.

Form GDL-1 / FIR AnnexureAs mandated by Board / Regulators

SFIO / Police Complaint Support

Assisting management in filing formal complaints under Section 447 of the Companies Act before law enforcement agencies.

FAIS Standard 410Permanent / Minimum 10 Years

Forensic Working Paper Archival

Safeguarding forensically cloned disk images, working papers, interview transcripts, and evidence binders under encrypted custody.

FREQUENTLY ASKED QUESTIONS

Statutory FAQs & Practical Guidance

Frequently asked questions and procedural guidance regarding Forensic & Fraud Investigation.

What are PUFE transactions under the Insolvency and Bankruptcy Code (IBC 2016)?

PUFE is an acronym for four statutory categories of avoidance transactions under IBC 2016: Preferential transactions (Section 43), Undervalued transactions (Section 45), Fraudulent transactions (Section 66), and Extortionate credit transactions (Section 50). When a company enters corporate insolvency, a forensic transaction audit is conducted to identify such transactions executed prior to insolvency, allowing the NCLT to reverse them and recover siphoned corporate assets.

What are the statutory penalties for corporate fraud under Section 447 of the Companies Act, 2013?

Under Section 447, any person found guilty of fraud involving an amount of at least ₹10 Lakhs or 1% of turnover (whichever is lower) is punishable with mandatory imprisonment for a term between 6 months and 10 years, along with a fine of not less than the amount involved in the fraud, extending up to three times the amount. Where the fraud involves public interest, the minimum imprisonment is 3 years.

How is digital evidence authenticated under the Bharatiya Sakshya Adhiniyam, 2023 (formerly Section 65B)?

Under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023 (formerly Section 65B of the Indian Evidence Act, 1872), electronic records such as emails, database extracts, and computer logs are admissible in judicial proceedings only when accompanied by a signed statutory certificate verifying that the computer system was operating properly, that the evidence was extracted in ordinary course, and confirming the SHA-256 cryptographic hash values.

What is the difference between Conventional Auditing and Forensic Auditing?

A conventional audit evaluates whether financial statements exhibit a 'true and fair view' based on statistical sampling and the assumption of management integrity (innocent until proven guilty). A forensic audit is an adversarial, investigative examination driven by professional skepticism (guilty until proven innocent), designed to uncover concealed fraud schemes, trace siphoned funds, determine culpability, and produce legally admissible evidence for judicial prosecution.

STATUTORY ADVISORY DESK • PRACTICE INQUIRIES

Statutory Inquiries & Practice Advisory

Information on Forensic & Fraud Investigation is provided for general reference. Office addresses and contact details are listed on the Contact page.

Contact Practice Office +91 99140-14949