Section 223: Accounts and Audit of the Insolvency and Bankruptcy Board
Section 223 of the Insolvency and Bankruptcy Code, 2016 (IBC) establishes the financial accountability of the Insolvency and Bankruptcy Board of India (IBBI). It requires proper books of account, an annual statement of accounts, audit by the Comptroller and Auditor-General of India (CAG), and submission of the certified accounts and audit report to Parliament through the Central Government.
Section 223: Accounts and audit - statutory text
223. (1) The Board shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.
(2) The accounts of the Board shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him and any expenditure incurred in connection with such audit shall be payable by the Board to the Comptroller and Auditor-General of India.
(3) The Comptroller and Auditor-General of India and any other person appointed by him in connection with the audit of the accounts of the Board shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General generally has in connection with the audit of the Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Board.
(4) The accounts of the Board as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before each House of Parliament.
Explanation of Section 223, subsection by subsection
Section 223(1): Maintenance of accounts and annual statements
The IBBI must keep proper accounting records and prepare an annual statement of accounts. The Central Government prescribes the form of the statement after consulting the CAG. This requirement promotes consistent reporting of the Board's receipts, spending, assets and liabilities. The obligation is mandatory; the statute uses the word "shall".
Section 223(2): Audit by the CAG
The CAG audits the Board's accounts at intervals determined by the CAG. The Board is responsible for paying expenditure incurred in connection with that audit. Section 223 does not itself specify a fixed annual audit interval, even though subsection (4) requires annual forwarding of certified accounts and the audit report.
Section 223(3): Audit powers and access to records
The CAG, or a person appointed by the CAG for the audit, has authority comparable to the CAG's authority when auditing Government accounts. This expressly includes demanding books, accounts, supporting vouchers and other papers, as well as inspecting the Board's offices. These powers help auditors verify transactions rather than relying solely on summaries supplied by management.
Section 223(4): Reports to Government and Parliament
Certified accounts and the accompanying audit report must be forwarded to the Central Government every year. The Central Government must then arrange for those documents to be laid before both the Lok Sabha and the Rajya Sabha. This provides parliamentary oversight of the Board's financial administration.
Important terms and legal definitions
- Board
- The Insolvency and Bankruptcy Board of India, established under Section 188 of the IBC and referred to in Section 3(1) of the Code.
- Comptroller and Auditor-General of India (CAG)
- The constitutional authority provided for under Article 148 of the Constitution of India, with audit-related duties and powers governed by applicable law.
- Annual statement of accounts
- A financial statement prepared for the relevant year in the form prescribed under Section 223(1); the provision does not itself set out the detailed accounting format.
- Audit report
- The report accompanying certified accounts following examination by the CAG or an authorised appointee under Section 223.
- Prescribed
- Under Section 3(26) of the IBC, "prescribed" means prescribed by rules made by the Central Government under the Code.
How the Section 223 accountability process works
- Maintain records: IBBI records receipts, expenditure and other relevant financial transactions.
- Prepare accounts: The Board prepares the annual statement in the prescribed form.
- Audit: The CAG or an appointed auditor examines the records and may seek supporting documents or inspect offices.
- Certify and report: Certified accounts and the audit report are forwarded annually to the Central Government.
- Parliamentary presentation: The Central Government causes the documents to be laid before both Houses of Parliament.
Related provisions of the Insolvency and Bankruptcy Code
Section 188 establishes the Insolvency and Bankruptcy Board of India. Section 196 sets out its powers and functions. Section 221 provides for grants by the Central Government. Section 222 establishes the Board's Fund and identifies its receipts and permitted uses. Section 224 concerns the Board's annual report. Together, these provisions address financing, recordkeeping and institutional oversight.
For the full statute and subsequent amendments, consult the India Code official legislation portal and the IBBI legal framework. The CAG official website provides information on the constitutional audit institution. These links are reference resources; the applicable rules and notifications should be checked for the period under review.
Frequently asked questions
Who audits the accounts of IBBI?
Under Section 223(2), the Comptroller and Auditor-General of India audits the Board's accounts at intervals specified by the CAG.
Who pays the cost of the audit?
The Board pays expenditure incurred in connection with the audit, as expressly required by Section 223(2).
Can the auditor inspect IBBI offices?
Yes. Section 223(3) expressly authorises the CAG or an appointed auditor to inspect the Board's offices and demand relevant records.
Are IBBI accounts submitted to Parliament?
Yes. Under Section 223(4), the Central Government must cause the certified accounts and audit report to be laid before each House of Parliament.
Does Section 223 regulate audits of companies in insolvency?
No. It regulates the accounts and audit of the IBBI itself, not the statutory financial audit of a corporate debtor.
Read the Insolvency and Bankruptcy Code, 2016 - overview and provisions