CA Archit Agarwal’s Post

✅ NFRA vs ICAI: Issuing of Standards on Auditing The two regulators regulating the profession of #auditor have been in the news for all the wrong reasons. There seems to be conflicting views in respect of issuing standards on auditing. Section 143(1) of the Companies Act, 2013 talks about standards of auditing. One may say that standards of auditing should include standards on quality management as they are to be adhered by the auditors. But The Institute of Chartered Accountants of India has a different stance on the #SQMs. As per ICAI, SQMs are not standards on auditing. ICAI calls series 200-799 as Standards on Auditing but the act talks about standards of auditing. Is there a catch in the wordings? For the information of readers, SQMs are frequently referenced in other standards on auditing which simply means standards on auditing are incomplete without SQMs. ▶️ In my humble opinion, SQMs are to be treated the same as other standards on auditing. ▶️ Although legal opinions may be different but the spirit and intent of the law should be maintained. 🚀 You may also share your thoughts on the issue. For more such discussion, you may follow CA. Devender Pandey 🇮🇳 ✌🏻

The recent dispute between the Institute of Chartered Accountants of India (ICAI) and the National Financial Reporting Authority (NFRA) centers around the revision of SA 600 and the implementation of Standards on Quality Management (SQM). NFRA has proposed changes to SA 600, aligning it with the international standard (ISA 600), which would hold principal auditors accountable for the audits of subsidiary companies as well. ICAI has expressed concerns that this change would impose undue pressure on principal auditors, especially given the structure of Indian auditing, where many smaller CA firms audit subsidiaries. ICAI argues that it could lead to a concentration of work among larger firms and harm smaller firms' businesses. Furthermore, NFRA has been pushing for the introduction of SQMs, which ICAI has opposed, citing the need for more consultation. ICAI has also raised concerns about the impact of these changes on small and medium-sized auditing firms in India. what's your opinion on this topic 🤔

ICAI takes matters into its own hands with new quality management standards. The Institute of Chartered Accountants of India (ICAI) has released a new Standard of Quality Management (SQM) for chartered accountants and audit firms. This move comes despite legal requirements that these standards be notified by the government based on recommendations from the National Financial Reporting Authority (NFRA) ToI reported. NFRA, which oversees auditors and firms working with listed and large companies, has been pushing to align audit standards with global norms. This effort aims to close gaps identified during audits of companies with subsidiaries or branches audited by different auditors. These gaps have been linked to significant fund siphoning incidents involving companies like IL&FS, Reliance Capital, DHFL, and Cafe Coffee Day. NFRA has emphasized the need forrevised SQM to ensure quality audits, proper supervision, and auditor independence. The issue was discussed in a recent board meeting where ICAI was asked to submit a draft within three weeks. However ICAI proceeded to release the SQM and made changes to some audit standards, which some see as a violation of norms. Source:- Times of india #icai #chartered #NFRA #ToI

NFRA CHAIRMAN'S TONGUE LASHING TO ICAI OVER 'LAGGING' STANDARDS, CRITICISES 'MYOPIC' APPROACH ajayIn a tough & straight talking speech, NFRA Chairman Ajay Bhushan Pandey gives a clarion call for adopting global auditing standards; Opining that Indian auditing standards are lagging by more than two decades, Mr. Pandey says that the CA profession in India cannot dream of creating a global firm without first adopting and following global standards; Addressing a webinar hosted by NFRA, Mr. Pandey quips " We cannot conveniently say that what we are doing is the best... that is a myopic view... good is always the enemy of the best..." ; Mincing no words, Mr. Pandey further laments that if the audit profession is not going to strive for the best, how will it compete with global firms?; Expressing his frustration that the current situation vis a vis auditing standards is not a 'happy' one, NFRA Chairman also calls for SQMs (Standards on Quality Management) to be issued as a Standard and that they need to become integral part of auditing standards; Mr. Pandey briefly touches on the SA 600 controversy, commenting that the Standard was of 2002 vintage thereby allowing auditors to escape responsibility.

🌐 Transforming India’s Auditing Standards: A Landmark Shift Ahead! #NFRA #IndSAs #AuditReform The National Financial Reporting Authority (NFRA) is leading a transformative overhaul of India’s auditing landscape, with key revisions set to roll out by April 1, 2026. These changes aim to align India’s auditing practices with global standards, enhancing transparency and accountability across the financial reporting ecosystem. Here's what you need to know: 1) Enhanced Quality Control Standards (SQC 1, SQM 1 & SQM 2)- NFRA is recommending the revision of SQC 1 to align with global ISQM 1 & ISQM 2 standards, ensuring modernized and robust quality management in auditing practices. 2) Revised Group Audit Standard – SA 600 (R) A significant update to SA 600, aligning it with international ISA 600, will enhance the oversight of group auditors, especially for Public Interest Entities (PIEs), while excluding entities like public sector banks and PSUs. 3) Joint Auditor Liability – New SA 299 Standards NFRA proposes making joint auditors jointly and severally responsible for audit outcomes under SA 299, a move that aligns with global practices to ensure full accountability for audit reports. 4) Comprehensive Revisions to Auditing Standards (SA 800, 805, 810) In addition to SA 600, NFRA recommends updates to other specialized standards such as SA 800, 805, and 810, marking a broader move towards updating and modernizing India’s entire audit framework under the new IndSAs. ⏳ Looking Ahead: - Once approved, these standards will come into effect on April 1, 2026, and will primarily impact listed companies and PIEs. - The revisions promise to enhance corporate governance and investor confidence, ensuring India’s auditing framework remains competitive on the global stage. 💬 What’s Your Take? - NFRA’s proposals are largely supported, though ICAI has voiced concerns about the impact on smaller firms. How do you see these changes affecting the profession? Share your thoughts! #CorporateGovernance #AuditStandards #Transparency #FinancialReporting #GlobalAlignment #NFRA #IndSAs

📢 Attention all auditors and accounting professionals! 📢 The Institute of Chartered Accountants of India (ICAI) has just released the Exposure Draft for the Audit Quality Maturity Model (AQMM) Version 2.0, and it's now open for public comments. This is a valuable opportunity for you to provide your input and shape the future of audit quality standards. The AQMM is a critical framework for assessing and enhancing the quality of audits, and Version 2.0 reflects the latest developments and best practices in the field. Your feedback can play a crucial role in ensuring that the AQMM remains relevant and effective in the ever-evolving business environment. If you're passionate about upholding the highest standards of audit quality and contributing to the continuous improvement of the profession, I encourage you to take part in the public comment process. Your expertise and insights are invaluable in shaping the future of audit quality. Let's come together to drive excellence in auditing and ensure that the AQMM Version 2.0 reflects the needs and expectations of the global business community. Share your thoughts and make an impact by participating in the public comment period today! #AuditQuality #AQMM #ICAI #PublicComments #AuditExcellence #AccountingStandards #ProfessionalDevelopment #IndustryInsights Note: AI-powered post. May contain errors.

🔵Big News: India's NFRA Tightens Audit Standards to Prevent Corporate Failures. 👉 All you need to know under a minute: 🔸The National Financial Reporting Authority (NFRA), India’s auditing and accounting standards regulator, is advancing efforts to incorporate globally recognized standards, particularly in light of recent corporate failures that exposed significant gaps in the country's auditing practices. 🔸It is aligning its audit standards with global benchmarks, following notable corporate failures like Coffee Day Enterprises and IL&FS. 🔸NFRA Chairman Ajay Bhushan Pandey highlights the need for international standards ISQM-1 and ISA 600 to ensure high-quality, accountable audits. 🔴 What are the challenges faced by NFRA? 🔸NFRA faces challenges from The Institute of Chartered Accountants of India (ICAI), which argues that NFRA’s proposals may place too much burden on principal auditors. 🔸Despite pushback from the Institute of Chartered Accountants of India (ICAI), NFRA is steadfast in holding principal auditors accountable for subsidiary audits. 👉 ICAI believes that holding principal auditors fully accountable for subsidiary audits could impact audit efficiency. Despite this disagreement, NFRA stresses the importance of clear accountability to improve audit reliability. By enforcing these standards, NFRA aims to enhance audit transparency and reliability, boosting international investor trust. What are your thoughts on the same? Follow CA Archit Agarwal for more such insights. #NFRA #AuditReforms #GlobalStandards #ISQM1 #ISA600 #CorporateTransparency #IndianAudit #FinancialReporting #AccountabilityInAudit

In a major overhaul, the National Financial Reporting Authority (NFRA) on Tuesday cleared 40 audit standards, including six where the Institute of Chartered Accountants of India (ICAI) had raised objections.   After detailed discussions, NFRA board voted eight-three for aligning several audit standards (SA) with global norms and recommended the notification of standard on quality control (SQM) by govt. While NFRA members and chairman and representatives from CAG, RBI and Sebi as well two independent experts on the board of the regulatory body supported the revision of SA 600, SA 805, SA 800 and SA 299, the three ICAI representatives opposed the move.   This was despite legal opinion suggesting that ICAI had no powers for notification, and the final notification must be done by the ministry of corporate affairs based on a recommendation by NFRA. Tuesday’s decision is also likely to end ICAI’s efforts to claw back some of the powers it had lost to NFRA after govt belatedly notified the agency under the Companies Act.   In the case of SA 299, where global standards are unavailable, NFRA has sought to deviate from the norms for joint audit used in France, Germany, South Africa and Singapore. Instead of making auditors jointly and severally responsible, ICAI had sought to make Indian auditors individually responsible, which makes it tough for the regulators to fix responsibility in case of wrong doings.   Source: TOI 13.11.2024 #NFRA #ICAI #ICMAI #ICSI

NFRA vs. ICAI It is well known why the Government established the National Financial Reporting Authority (NFRA) in 2018. Since then, #NFRA has issued several disciplinary orders against auditors for negligence, non-compliance with auditing standards, and lack of due diligence. They have also conducted inspections of major audit firms. [1] Recently, NFRA released an exposure draft of #SA600, which is largely aligned with #ISA600. [2] This move is likely to face opposition from many top firms, except large multinational firms. [3] While we view ICAI as the standard-setting body in India for accounting and auditing standards, NFRA's action demonstrates an exception to this. [4] Both regulators, however, operate under the @Ministry of Corporate Affairs. ✅ As per Companies Act 2013 “The Central Government may prescribe the standards of auditing or any addendum thereto, as recommended by the ICAI, constituted under section 3 of the CA Act, 1949, in consultation with and after examination of the recommendations made by the NFRA. Provided that until any auditing standards are notified, any standard or standards of auditing specified by the #ICAI shall be deemed to be the auditing standards. After reading the above section, do you think NFRA has the power to issue an exposure draft without consulting ICAI? ▶️ Please share your thoughts. We await further updates on this matter, but prompt intervention from the Ministry is needed. 🚀 For more such posts, you may follow CA. Devender Pandey 🇮🇳 ✌🏻

ICAI lacks authority on audit standards; MCA can nullify SQMs if not issued as per law, says ex-NFRA chief Rangachari Sridharan As ICAI introduces new Standards of Quality Management (SQM), questions arise regarding its legitimacy and adherence to established protocols. Rangachari Sridharan, the former chief of the NFRA, asserts that legally valid auditing standards can only be issued by MCA, a position that challenges the ICAI's recent unilateral actions. The Institute of Chartered Accountants of India | National Financial Reporting Authority (NFRA) Story by Alekh Shah #ICAI #NFRA #MCA #Audit #Accounting #CFO #IndiaInc https://lnkd.in/gCche6pP