Natasha Anand

✅ The current tussle of NFRA and ICAI over the adoption of ISA 600 issued by the International Auditing and Assurance Standards Board (IAASB) will be an interesting one. ✔️ I hope the newspaper reports are correct and this matter will be deliberated in the upcoming ICAI council meeting. ✔️ #India generally converges the international standards instead of adopting. Some carve-outs and carve-ins are always there. ✔️ In india, seperate component auditors are appointed in banking, insurance sector and some other public sector companies. ✔️ Lets wait for the response from ICAI council. I am sure Council will also take the views of partners from Big firms and eminent Chartered Accountants. ✔️ #MCA should mediate as it is the parent body of both #ICAI and #NFRA. ▶️ Views are personal.

5

CIRCULAR ON EMERGING MATTERS IN THE PAYMENT OF VOLUNTARY CONTRIBUTION UNDER THE CONTRIBUTORY PENSION SCHEME The National Pension Commission (PenCom) has enhanced the processes of voluntary contribution (VC) in a significant move aimed at improving the contributory pension scheme (CPS). In response to feedback from licensed pension fund operators (LPFOs), PenCom issued a circular to LPFOs to address significant concerns raised by contributors and retirees regarding voluntary contributions. REDUCED RETENTION PERIOD Mandatory and non-mandatory contributors can now access the 50 percent contingent portion of their voluntary contributions after one year, which is a reduction from the previous two-year requirement. This change aims to provide speedy access to funds in order to meet personal needs, which often arise. UNIFORM WITHDRAWAL RULES Retirees, exempted contributors, political office holders, employees in organisations with an AES, and foreigners are now permitted to withdraw 50 percent of their voluntary contributions before the expiration of their employment or contract. This provision seeks to eliminate withdrawal variations in the previous guidelines. TAX DEDUCTIONS In line with section 10 (4) of the PRA 2014, any income accrued on voluntary contributions are taxable according to relevant tax laws if the withdrawal is made before five years from the date of contribution. This clarification ensures consistency with the Act and addresses concerns raised by stakeholders. Please read on 👉

7

2 Comments

Why the art of holding interviews are a staple for conducting an effective Audit? {Part-1} As an auditor who is required  to conduct the audit engagement as per the Standards of auditing  prescribed by ICAI, it is important for the auditor to have proper planning of the audit, the execution and collection of evidences as per the audit plan and reporting the findings to the management or Those Charged with Governance.  As per Auditing Standard SA 315 – Identifying and Assessing the risk of material misstatement through understanding the entity and its environment, there can be varied ways and means through which an auditor can obtain an understanding of the entity . It can involve performing audit procedures like observation, inspection of books or inquiries from the management, appropriate individuals or the persons who the auditor deems fit to  have sufficient information.   Similarly, while obtaining audit evidence as per Auditing Standard SA 500 Audit Evidence, where the main emphasis is to obtain sufficient appropriate audit evidence, the audit procedure which is required to be performed by the auditor is inquiry. The inquiry in itself does not provide satisfactory evidence. Hence, it is only effective when it is coupled with with other audit procedures like analytical procedures, observation, recalculation, external confirmation etc.  So, in every facet, Interview thus becomes a critical part of risk assessment for the auditor. Knowing how to conduct an effective interview and helping the auditor to gather a lot of information which later can be corroborated with other audit procedures. It is important to structure the interview and be well prepared before conducting an interview.     Interviewing client personnel is a crucial aspect of conducting an audit, as it enables auditors to extract relevant information and gather valuable insights that serve as essential audit evidence. The importance of interviewing during an audit cannot be overstated, as it: - Provides firsthand information from knowledgeable individuals - Clarifies complex transactions and processes - Identifies potential risks and control weaknesses - Enhances understanding of the client's business and operations - Fosters a collaborative environment, promoting transparency and trust Benefits of interviewing the client include: - Improved audit efficiency and effectiveness - Enhanced audit quality and reliability - Increased understanding of the client's internal controls and risk management - Identification of areas for improvement and recommendations for enhancement - Strengthened auditor-client relationships Hence, interviewing client personnel is a vital component of the audit process, providing auditors with essential information and insights that inform their opinions and recommendations. By conducting effective interviews, auditors can gather high-quality evidence, improve audit outcomes, and deliver value-added services to their clients. To be continued....

3

Reposting this insightful discussion on governance and the accountancy profession by Vijay Kapur. It's surprising and somewhat concerning to see that neither ICAI nor any other regulatory body has representation on such crucial matters. Indian Chartered Accountants generate perhaps the most extensive audit reports globally, yet our voice seems underrepresented when it comes to shaping key governance norms. It’s vital that our regulatory bodies engage more actively in these international forums #Governance #Accountancy #ICAI #ProfessionalBodies #Audit #IndianCAs

8

Responded to Issue Id: 4716 applying following Ind AS: 1. Ind AS 2 – Inventories Issues in Issue Repository: 102 2. Ind AS 105 – Non-current Assets Held for Sale and Discontinued Operations Issues in Issue Repository: 78 Registrants of https://gaapadvisors.com having subscription access to issue repository can search issue id 4716 to see the issue and response.   Issues in Issue Repository can be searched based on: 1. Framework – Accounting Standards or Indian Accounting Standards; 2. Standards in the selected Framework; 3. Paragraph no. in the selected standard; 4. Issue Id; or 5. Keywords.   Register now on https://gaapadvisors.com and get 48 hours of free subscription access to all repositories which includes the benefit to submit issues.   Excel in Financial Reporting in India #GAAPAdvisors - Enabling Excellence in Financial Reporting

4

3 Comments

This Audit revision by NFRA will impact 17540 listed companies and its subsidiaries! The National Financial Reporting Authority (NFRA) has proposed critical revisions to SA 600, aiming to align Indian standards with ISA 600. The current SA 600 (last updated in 2002) has been deemed inadequate for handling modern group audits, where multiple entities are involved. Mainly global standards are very different than what we are following till now! In order to match global auditing standards with Indian standards, ISA 600 has been proposed! This whole revision has been proposed for group auditors as they will now be responsible for closely evaluating the work of component auditors and improving communication across entities. This shift impacts 17,540 listed companies and their subsidiaries, enforcing more rigorous audit procedures. As a professional, you might have concerns whether your role as auditor will get impacted adversely! I don’t think so… ! I agree with NFRA that 98% of the auditors won’t be affected. Moreover, remember it is just proposed not implemented! With public consultation open, now is the time for professionals to get involved, provide feedback, and prepare for these changes. What are your suggestions to improve the proposed ISA 600? Let me know in the comment box… #AuditReform #FinancialReporting #GroupAudits #NFRAUpdates #AuditStandards

82

14 Comments

Responded to Issue Id: 4760 applying following Ind AS: Ind AS 24 – Related Party Disclosures Issues in Issue Repository: 34 Ind AS 32 – Financial Instruments: Presentation Issues in Issue Repository: 381 Issues in Issue Repository can be searched based on: 1. Framework – Accounting Standards or Indian Accounting Standards; 2. Standards in the selected Framework; 3. Paragraph no. in the selected standard; 4. Issue Id; or 5. Keywords.   Register now on https://gaapadvisors.com and get 48 hours of free subscription access to all repositories which includes the benefit to submit issues.   Excel in Financial Reporting in India #GAAPAdvisors - Enabling Excellence in Financial Reporting

8

3 Comments

Advanced Questions on CARO 2020 for Big 4 CA Interviews! Question: How should an auditor report on “Unregistered Charges or Satisfaction of Charges” under CARO 2020? Answer: The auditor must verify whether charges or satisfaction of charges have been registered with the Registrar of Companies within the stipulated time. To do this, the auditor should obtain a list of all secured loans, cross-reference with the MCA portal to check the status of charge registration, and inspect relevant agreements and documents. Any unregistered charges or delays in registration must be highlighted, along with reasons provided by management. Question: Discuss the approach for reporting on “Resignation of Statutory Auditors” under CARO 2020. Answer: CARO 2020 requires the auditor to report if the statutory auditors have resigned during the year. The auditor should assess the reasons for resignation by reviewing the resignation letter, correspondence with management, and Board minutes. Additionally, the auditor must ensure that disclosures of the resignation and its reasons are adequately presented in the financial statements. Understanding the impact of resignation on audit opinion is also crucial. Question: What are the requirements under CARO 2020 for reporting on “Compliance with Cash Flow Statement”? Answer: The auditor must ensure that the cash flow statement is prepared as per the applicable financial reporting framework and accurately reflects the company’s cash flows. The auditor should verify the classification of cash flows (operating, investing, and financing activities), check the consistency with other financial statements, and confirm the use of appropriate methods (direct or indirect). Cross-referencing significant cash transactions with supporting documentation and bank records is necessary to identify any discrepancies. Question: How should an auditor evaluate “Transactions with Struck-Off Companies” under CARO 2020? Answer: Under CARO 2020, the auditor is required to report on transactions with companies struck off under the Companies Act, 2013. The auditor should check the company’s transactions with vendors, customers, or creditors, cross-referencing with the list of struck-off companies available on the MCA portal. The auditor must scrutinize the nature of these transactions, their materiality, and any impact on the financial statements. Proper disclosure of such transactions is critical to comply with CARO 2020. #Big4Interview #CARO2020 #CharteredAccountant #Audit #ICAI #FinanceCareers #LinkedInLearning #AuditStandards #JobPreparation #Accounting #CAInterviewTips

16

Good opportunity

59

4 Comments

📢 ICAI Elections 2024 It’s heartening to see many professional colleagues raising concerns about ICAI elections and governance. Among these concerns is the use of ICAI funds for seminars and conferences, which may indirectly benefit #Council members. In my personal view, proving such a claim is challenging. Some of these programs are genuinely beneficial and align with the Continuing Professional Education (CPE) requirements. While the decision-making process around these programs and fund allocation is a separate debate, there is an opportunity for practicing members to derive indirect benefits if approached strategically. These programs allow CCMs to stay connected with faculties, speakers, moderators, and of course CA influencers, creating a strong professional network. For practicing members, this is a positive development. However, members in the industry might feel overlooked, as their specific needs often remain underrepresented in such initiatives. Rather than expecting too much, members can leverage these programs as effective networking #opportunities. Who knows? You might find yourself as the next speaker or moderator at one of these events! What’s your take on these programs? Share your thoughts in the comments. ♂️ Let’s keep this conversation going! 🔔 Follow CA. Devender Pandey 🇮🇳 for more discussions. CA Ronak Khandelwal (ACA, CCCA, CGST) Sanjay Joshi #ICAI #Governance #Elections2024

9

5 Comments

The National Financial Reporting Authority (NFRA) has been actively reviewing audit findings in India. Their observations often highlight areas where audit firms have fallen short in their professional responsibilities, including: 1. Inadequate Audit Evidence 2. Non-Compliance with Auditing Standards 3. Insufficient Consideration of Risk 4. Lack of Professional Skepticism 5. Inadequate Governance and Quality Control 6. Specific Issues in Financial Reporting #regulators #professionalsduties #nfra #audits

12

 🔵 Audit Will Not Be Same Anymore :( For good or for bad? Here’s everything you MUST KNOW 👇 The National Financial Reporting Authority (NFRA) has launched a BOLD reform to overhaul the way auditors verify corporate financials in India. NFRA is revising all 38 Auditing Standards & two Quality Management Standards set by The Institute of Chartered Accountants of India. This is huge because, in the current practice, Auditing Standards issued by the ICAI are deemed final. SA 600 is already in process which deals with consolidated financial statements of business with more updates expected soon. 🧐 Why such reforms are needed? The move comes after corporate scandals like Satyam, IL&FS, and others highlighted the need for stricter audits and accountability. NFRA’s approach might have caused some disagreements with ICAI, but this isn’t a conflict. It’s about meeting the mandate of Section 143(10) of the Companies Act, 2013. Quiz for Smart CAs: What is the mandate of Sec 143(10) of CA’2013? Correct answer will get a “Practical Audit Resource”. Let’s gooo! My fellow CAs, what do you think about this BOLD move of NFRA? Would love to read your take on this. #AuditingStandards #NFRA #ICAI #AccountingStandards

121

20 Comments

CPE Hours - Some Important points to note from the CPE Statement 2023, are as follows: 1. 2 CPE hours each on the topics “Code of ethics” and “Standard on auditing” were mandatory till Calendar year 2023 only. These are Recommendatory from Calendar Year 2024 onwards. 2. Due to introduction of Consequential Provisions from Calendar year 2024 onwards the last date of completion and submission of Self Declaration Form for claiming Unstructured hours (ULA) from Calendar year 2024 is preponed to 31st December of every year. 3. Member is exempted to comply with CPE Compliance only for the particular Calendar year during which he/she gets membership for the first time. 4. Member can Complete its Structured learning requirements using indicative list of eligible CPE Structured Learning Activities available at Advisory on Structured Learning (revised) 5. In case member Surrendering & Obtaining COP during/in between any Calendar Year than Applicability of CPE requirements are as follows: Applicability of CPE requirements in case ofPeriodSurrendering of COPObtaining of COPFrom 1st January to 30th JuneNon-COP holderCOP holder1st July to 31st DecemberCOP holderNon-COP holder 6. Out of 20 Structured CPE Hours which is mandatory to be completed by Members below 60 years and holding COP, in each Calendar year, 4 Structured CPE Hours can be completed in virtual mode through Digital Learning Hub till any further modification. 7. There is actual credit of Structured CPE hours for Completion of Certificate/Diploma Courses (Virtual/Physical) conducted by Central Committees of ICAI. 8. Further it may kindly be noted that crediting of CPE hours for any CPE Event would be effective in the Calendar year in which event is concluding. CPE Hours Status: You can view your updated CPE hours status by logging into the CPE Portal at www.cpeicai.org. Use your six-digit membership number as the User ID and the default password format: cpe+6 digit membership number. Therefore, Members are again requested to complete and claim their CPE hours requirements (structured/unstructured) for the current Calendar year (2024) in timely manner without any delay - latest by 31st December, 2024. To avoid any hardship and to ensure compliance as per Continuing Professional Education Statement, 2023, we once again urge you to review your current CPE hours status on the CPE Portal www.cpeicai.org. Updated CPE Statement for your consideration is attached. #ICAI #CPEHours

3

ERY IMPORTANT - DON'T MISS TO GIVE YOUR FEEDBACK* ICAI proposes different criteria for entitlement to train articled assistants. One of these is TURNOVER of the firm in addition to the existing criteria. It is not clear whether turnover based criteria will replace the existing criteria or it is in addition to the it. I strongly feel that the turnover criteria is not suitable to decide the number of articled students your firm can train even when it is one of the criteria for 2 reasons- 1. It will substantially reduce the eligibility of new and SME practioners. 2. can create implementation issues since the turnover can be flexible 3. Only big firms will be benefitted from this change Please give your feedback whether you want this change with a descriptive commnets at the end on the link given below. https://lnkd.in/dRk68UBJ CA REKHA DHAMANKAR, PUNE

1

What have they done? India's audit regulator, the National Financial Reporting Authority (NFRA), has taken decisive action against Pathak HD & Associates, the joint auditors of Reliance Capital, following a series of failures flagged by the former auditor, Price Waterhouse (PW), which resigned amidst suspicion of fraud amounting to Rs 12,571 crore by the company. The two chartered accountants have been banned from conducting audit work for durations of 10 years and five years, respectively. Additionally, the firm faces a penalty of Rs 3 crore, with the two CAs individually directed to pay fines of Rs 1 crore and Rs 50 lakh. Source: https://lnkd.in/gw5JmpW3

11

Do you know that under Ind AS: 1. impairment loss on Financial Instruments needs to be shown as a separate line item in the Statement of Profit and Loss 2. nature of evidence needs to be disclosed while recognising deferred tax asset 3. the disaggregated revenue should be disclosed but care should be taken to make it congrous with Segment Reporting disclosures 4. security deposits not in the nature of financial assets only are shown below "other non current assets" Source: www.collectmybook.in

51

#NFRA along with the Indian Institute of Corporate Affairs (#IICA) is planning to launch some courses for upgradation of knowledge of auditors who will be auditing large listed companies. Already, a four-month course has been started for audit committee members. https://lnkd.in/drJPCrpy

21

What Sec 143(10) states is that ICAI MAY make recommendation to the Central Govt. BUT such recommendations will be subject to review/endorsement by NFRA. However, u/s 132 (2) NFRA SHALL (consulting ICAI is NOT required): (a) make recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or class of companies or their auditors, as the case may be; (b) monitor and enforce the compliance with accounting standards and auditing standards in such manner as may be prescribed; In the case of SA 600 NFRA has indeed consulted ICAI who by its conduct has compelled NFRA to say “enough is enough”. #nfra

8

4 Comments