Transaction Audit under IBC
Under the evolving insolvency landscape in India, Transaction Audits Under IBC 2016 have become a vital tool to identify preferential, undervalued, fraudulent, or extortionate transactions conducted by a corporate debtor before the commencement of insolvency proceedings. As a leading consultancy in India, ASC Group offers end-to-end support in conducting Transaction Audits as per the framework of the Insolvency and Bankruptcy Code, 2016 (IBC).
With the growing complexity of insolvency cases, Resolution Professionals (RPs), Liquidators, and stakeholders are increasingly relying on professional Transaction Audit Services to trace irregular financial activities that may affect creditor claims and the resolution process.
What is a Transaction Audit Under IBC?
A Transaction Audit under the IBC 2016 is a forensic review of the financial transactions of the corporate debtor to detect whether any questionable transactions were undertaken during the look-back period, as defined under Sections 43 to 51 of the Code. These include:
- Preferential transactions (Section 43),
- Undervalued transactions (Section 45),
- Transactions defrauding creditors (Section 49),
- Extortionate credit transactions (Section 50),
The objective is to protect the interest of creditors and ensure that the assets of the company are not wrongfully diverted or depleted before the insolvency proceedings commence.
Legal Mandate for Transaction Audit
The Insolvency and Bankruptcy Board of India (IBBI), through its regulations such as the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, empowers the Resolution Professional or Liquidator to appoint independent auditors to conduct Transaction Audits and identify avoidable transactions. This process is essential to support applications before the Adjudicating Authority (NCLT) for reversal or recovery of such transactions.
As per the IBBI guidelines, any transaction that appears to be executed with an intent to defraud creditors, gain undue advantage, or dilute the asset value must be reported and acted upon promptly. At ASC Group, we ensure that our Transaction Audit Services are fully compliant with these regulatory requirements.
Why is a Transaction Audit Crucial?
In insolvency proceedings, time is of the essence. A properly conducted Audit Transaction Services helps in:
- Identifying wrongful transactions that harm creditors,
- Preserving the value of the debtor’s estate,
- Enhancing the prospects of successful resolution or liquidation,
- Supporting litigation and recovery under IBC,
Our audits ensure that suspicious or non-compliant transactions are identified, quantified, and documented with supporting evidence, strengthening the case before the National Company Law Tribunal (NCLT).
Our Transaction Audit Services
At ASC Group, we offer specialized and tailored Audit to Transaction Services in India that cover:
- Examination of books of accounts and ledgers,
- Identification of related party transactions,
- Tracing preferential and undervalued transfers,
- Analysis of cash flows and bank statements,
- Preparation of audit reports for submission to the RP/Liquidator/NCLT,
- Legal coordination and advisory for further action under IBC,
We work closely with Insolvency Professionals (IPs) and Legal Advisors to ensure that the audit findings are actionable and meet all procedural requirements under the IBC framework.
Who Needs a Transaction Audit?
- Resolution Professionals appointed under CIRP,
- Liquidators during corporate liquidation,
- Creditors’ Committees seeking clarity on fund utilization,
- Legal representatives presenting cases before the NCLT,
- Investors or buyers conducting due diligence before acquiring stressed assets
If you are involved in any stage of an insolvency case, a Transaction Audit Under IBC is not just beneficial but often legally necessary.
Why Choose an ASC Group?
With over 3 decades of experience in corporate advisory, compliance, and audit, ASC Group is trusted by insolvency professionals, financial institutions, and corporates across India. ASC Group has a team of skilled chartered accountants, forensic auditors, and legal professionals bring unmatched expertise to every audit.
As a firm with strong credentials in handling IBC-related audits, we understand the sensitivity and confidentiality required in such assignments. Our audit methodologies are aligned with IBBI guidelines, and we use advanced tools and techniques for data analysis, forensic accounting, and reporting.
ASC Group is your reliable partner for accurate, timely, and compliant transaction audits under the IBC 2016 framework.
Key Takeaways
- Transaction Audit Under IBC Section2016 is critical to identify and reverse avoidable transactions.
- Mandated under Sections 43 to 51 of the Insolvency and Bankruptcy Code, it helps protect the value of the debtor’s estate.
- ASC Group provides end-to-end Audit Transaction Services in India, fully compliant with IBBI and NCLT requirements.
- Our expertise, confidentiality, and legal coordination make us a preferred partner for RPs, liquidators, and financial institutions.
Secure the insolvency process with a professional transaction audit. Connect with ASC Group to ensure a legally sound and financially transparent resolution process.
