Importance of Internal Controls over Financial Reporting (ICFR)

Nikhil6828 Jul, 2025Finance

Corporate governance in India has heightened the importance of Internal Controls over Financial Reporting (ICFR), made mandatory under the Companies Act, 2013. ICFR is more than compliance—it ensures accurate financial reporting, prevents fraud, and strengthens investor confidence. It covers processes for initiating, recording, and reporting transactions, including approvals, reconciliations, segregation of duties, and IT controls. Strong ICFR assures stakeholders that financial statements are reliable and compliant with accounting standards.