Transaction Audit under IBC
Under the Insolvency and Bankruptcy Code (IBC), businesses undergoing insolvency or resolution are closely scrutinized to ensure financial transparency and prevent fraudulent practices. A Transaction Audit plays a critical role in this process by examining past transactions to detect irregularities, preferential dealings, and fund diversion that could compromise creditor interests.
At VProWide FinAdvisory, we provide specialized Transaction Audit services aligned with IBC provisions. Our audits help insolvency professionals, creditors, and stakeholders uncover suspect transactions, validate financial dealings, and ensure compliance with the Code. By combining legal knowledge, financial expertise, and advanced analytics, we deliver actionable insights that support fair resolution and protect stakeholder interests.
We thoroughly review books of accounts, banking trails, and related party transactions to identify any deviations from regulatory norms. Our detailed reports assist in establishing accountability and strengthening the resolution process. With VProWide FinAdvisory, organizations gain clarity, transparency, and a stronger foundation for effective insolvency outcomes.
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What is a Transaction Audit Under IBC?
A transaction audit under IBC is a detailed examination of financial transactions conducted during the “look-back period” defined by the Code. The goal is to identify:
- Preferential Transactions – Payments favoring certain creditors over others.
- Undervalued Transactions – Sale or transfer of assets below fair value.
- Fraudulent Transactions – Dealings made with intent to defraud creditors.
- Extortionate Transactions – Unfair terms or obligations imposed on the debtor.
Legal Mandate for Transaction Audit
The Insolvency and Bankruptcy Code mandates that Insolvency Professionals (IPs) conduct transaction audits to:
Ensure fairness in insolvency resolution and liquidation.
Safeguard creditor interests by preventing diversion of assets.
Provide courts and tribunals with documented evidence of irregularities.
Enable recovery of funds or reversal of suspect transactions.
Key Benefits of Transaction Audit
Regulatory Compliance – Fully aligned with IBC guidelines and NCLT/NCLAT requirements.
Fraud Detection – Identify hidden, undervalued, or fraudulent transactions.
Creditor Protection – Ensure fair treatment of all creditors in the resolution process.
Actionable Reporting – Provide IPs and courts with reliable evidence for decision-making.
Why Choose ?
Deep knowledge of the Code and insolvency framework.
Blend of forensic audit skills with IBC legal understanding.
Transparent audits that withstand judicial scrutiny.
From transaction review to NCLT/NCLAT proceedings.
Our Approach
FAQs – Internal Audit
To identify suspect transactions such as preferential, undervalued, or fraudulent dealings that impact creditors’ rights.
It is the legally defined time frame (up to 2 years) prior to insolvency commencement during which transactions are scrutinized.
Yes, but audits conducted with robust methodology, documentation, and compliance with IBC guidelines stand strong in judicial review.
Insolvency Professionals (IPs), Committee of Creditors (CoC), lenders, and tribunals may require it as part of the insolvency resolution or liquidation process.
It ensures creditors are treated fairly by preventing diversion of funds or assets and by supporting recovery through NCLT/NCLAT orders.
We provide IBC-compliant, evidence-backed, and litigation-ready audit reports, ensuring stakeholders have clear insights for resolution.
