Vivek Agarwal’s Post

Good Morning, LinkedIn! 🔍 Trending in Auditing: Forensic Audit Qualification Proposal The Institute of Chartered Accountants of India (ICAI) has taken a bold step toward strengthening financial fraud detection and prevention. Here’s what you need to know: 🚨 Forensic Auditors Qualification Proposal ICAI is advocating for mandatory qualifications for forensic auditors to ensure only trained professionals handle fraud detection. This initiative seeks to: ✅ Enhance the credibility of forensic audits. ✅ Equip auditors with cutting-edge tools and techniques. ✅ Build trust in the auditing profession while addressing complex financial crimes. 💡 Why it matters: With rising financial frauds and regulatory complexities, this move is a significant leap toward aligning Indian auditing standards with global practices. It’s an opportunity for auditors to specialize and contribute to a more secure financial ecosystem. 🌟 Your thoughts? Let’s discuss how this proposal could impact the audit profession and open new avenues for learning and specialization. Stay tuned for more updates next Tuesday! #AuditUpdates #ForensicAuditing #ICAI #AuditorRole #FraudDetection #CorporateGovernance

The author of the attached article, CA Chetan Lunkar reinforces, and rightly so, that an #Auditor needs to study the impacts of specific provisions of the Digital Personal Data Protection Act, 2023 (#DPDPA2023) on her/his professional responsibilities. The author has predominantly dealt with the complex issues related to those provisions from the perspective of #StatutoryAuditors. However, I believe all professionals who are connected with any corporate engagement, viz.. #CostAuditors, #InternalAuditors, #Consultants, etc., must also study those provisions and consciously make efforts to ensure compliance with the provisions of #DPDA2023. According to CA Chetan Lunkar, “Since PII is shared with the Auditor by the auditee in connection with the auditee’s obligation under the law to undergo an audit, it can be said that the auditee is determining the purpose.”  Here, #PII means Personally Identified Information. In this context, he has covered the following phrases and provisions used in the #DPDPA2023 and the connected complex issues. In the context of the concerned professionals discharging their responsibilities in compliance with related #Ethics and #StatutoryProvisions, have been clarified by him for the understanding of readers: § PII as #AuditEvidence, § Whether #Auditors are #DataFiduciaries or DataProcessors, § Whether Auditors are exempted as a #DataFiduciary under the #DPDPA2023, § Auditors as a #DataFiduciary – Complexities, challenges, and consent mandates, and § Whether Auditors’ obligation to erase #PII comes in conflict with their obligation under the #AuditingStandards prescribed by The Institute of Chartered Accountants of India (ICAI). The article was published in the September 2024 issue of #TheCharteredAccountant published by the ICAI Nilesh S Vikamsey Ashwin Dalwadi Vijay Maniar Khushroo Panthaky Jamil Khatri Professor (Dr.) M.K. BHANDARI CMA Dr. Debaprosanna Nandy, Secretary(Officiating) PhD (Economics), FCMA, MBA, MCom, MIPHA   

ICAI vs NFRA face-off? #industryupdatesmadeeasy NFRA has proposed a major transformation in Indian auditing standards to align with global practices by 2026. Out of 40 proposed standards, 38 have been approved while 2 are being strongly opposed by ICAI: 1. SA 600 (group audit): NFRA says that the auditor of the parent company should be fully responsible for the group’s financial statements, including subsidiaries. NFRA believes this will stop the blame-shifting seen in past corporate scandals where parent and subsidiary auditors have pointed fingers at each other with no one to be fully held accountable. However ICAI feels this could give more power to big audit firms, leaving smaller firms out of group audits. 2. SA 299 (joint audit): NFRA wants stricter rules to clearly define the roles of multiple auditors in a joint audit. They say this will improve governance and prevent gaps in accountability. ICAI however feels the proposed changes could make joint audits too complicated and create more challenges for smaller firms, ultimately creating monopolies. This goes to show that NFRA prioritises accountability and fraud prevention while ICAI wants fair competition and inclusion of smaller audit firms. Striking a balance is the challenge at hand. So do you think stricter global standards can coexist with an inclusive audit industry in India? Feel free to repost. #ICAIvsNFRA #standardsonauditing #audit #corporateaffairs #ICAI #NFRA #MCA #india #accounting #charteredaccountants #finance

🚨Tensions Rise in India's Auditing Landscape: NFRA vs ICAI🚨 Recent developments are shaking up the auditing community as NFRA proposes significant changes to SA 600, aiming to hold group auditors accountable for subsidiary audits⚖️📊 KEY INSIGHTS: ⚠️ ACCOUNTABILITY SHIFT: NFRA is enforcing stricter auditor responsibilities, emphasizing that the term "SHOULD" in auditing standards should be interpreted as mandatory, not advisory💣 ⚠️ ICAI'S RESPONSE: ICAI has urged NFRA to pause the revisions, advocating for comprehensive stakeholder feedback, particularly from those involved in auditing subsidiaries📜✅ ⚠️ FRAUD PREVENTION: High-profile fraud cases have highlighted the urgent need for enhanced oversight of subsidiary audits to prevent future financial irregularities and maintain trust🔍💰 ⚠️ IMPACT ON SMALL FIRMS: A plethora of smaller CA firms are concerned that these new standards may push clients to larger firms, limiting their business opportunities and creating a less competitive market📉🏢😟 ⚠️ PROFESSIONAL EQUALITY: The ongoing dialogue underscores the importance of recognizing the work conducted by chartered accountants as equally qualified, fostering professionalism and fairness within the industry🤝🌟 As India strives for rapid economic growth, the credibility of audit is a paramount. Though NFRA's proposed changes are deemed to be applicable to merely 1.5% of 1.74 million active Public Interest Companies, but ain't the destiny of small firms still at Stake? A special thanks✨ to Neeraj Arora sir for providing valuable insights into these developments, enhancing our understanding of this critical issue! 📢 Join the Conversation: - Are these changes necessary for improving audit quality?🤔 - How will they affect your firm or career?💼 - Are small CA firms nearing their end?🏢😟 Your insights are vital as we navigate these critical changes in our profession! #Auditing #NFRA #ICAI #SA600 #AuditQuality #SmallFirms #FinancialIntegrity #Professionalism

🧐 Are New Audit Norms a Game Changer or a Threat to Smaller Audit Firms? Lately, there's been a heated debate between NFRA and ICAI that's been catching my attention. And I can't help but wonder—what does this mean for the future of auditing in India? 🤔 🔍 NFRA is pushing for new audit standards to align with global norms, but ICAI has raised some serious concerns. As professionals, don't we need to balance global standards with the unique landscape of our local practices? 🌍 📊 Here's the crux of the debate: ➡️ **ICAI's Concerns**: The new norms could concentrate audit work among large firms, potentially sidelining smaller and medium practitioners. Imagine smaller audit firms getting squeezed out because the big guys have more muscle! 💪 ➡️ **NFRA's Stance**: They believe stricter norms are essential to prevent corporate fraud and boost auditor accountability. Sounds great in theory, right? But will it really protect investors or just add more layers of compliance? 🏦 💡 What really caught my eye was the proposal that principal auditors should assess the competence of component auditors. ICAI argues that all auditors already meet the same professional standards. So, is this extra step necessary, or is it overkill? 🧐 🏦 Regulatory heavyweights like RBI, Sebi, and the CAG are backing NFRA’s draft. Does this indicate that stricter norms are indeed the need of the hour? 📢 With the formal draft for public comments expected soon, this debate is far from over! But let's not just be spectators—let's share our views. As someone in the profession, I’m curious—what do you think? Will these changes uplift the audit quality, or could they disrupt the very fabric of our profession? Drop your thoughts below! Let’s spark a conversation! 💬 #AuditStandards #NFRA #ICAI #Auditing #CorporateGovernance #Compliance #FinancialReporting #Accountability #RiskManagement #InternalAudit #ExternalAudit #AuditProfession #SmallFirms #BigFour #ProfessionalServices #Regulations #InvestorProtection #FinancialServices #IndiaBusiness #CA #CharteredAccountants #CFO #RiskAdvisory #FinancialLiteracy #CorporateFinance #Leadership #Finance #EconomicPolicy #PublicPolicy #RegulatoryCompliance #AuditQuality #FraudPrevention

What is this NFRA vs ICAI debate on SA 600 all about? Are firms at risk? In the latest Audit Masala episode, I explain this debate and how these changes could impact small and medium CA firms, potentially favoring larger audit firms. We get into the implications for group audits, subsidiary audits, and the overall audit quality. I also discuss NFRA's perspective on aligning with international standards and reducing fraud. Whether you are a CA student or a practicing professional, this video will help you understand the potential shifts in the audit landscape. Let me know your views in the comments section. Seekhna Shuru Toh Jeetna Shuru! #auditmasala #icai #nfra

Recent Actions by NFRA to Uphold Audit Integrity - Background and Enforcement Action: - NFRA imposed penalties on CA Pathak H.D. & Associates (PHD), an auditor of Reliance Capital Limited (RCL), for professional misconduct. - Financial penalties include Rs 3 Crore on PHD, Rs 1 Crore on the Engagement Partner (EP), and Rs 50 Lakhs on the Engagement Quality Control Reviewer (EQCR). - EP and EQCR have been debarred from practice for 10 and 5 years, respectively. - Issues Identified: 1. Suppression and Misconduct: PHD failed to uphold its independence, acting under the influence of the Audit Committee and Management, and dismissed another auditor’s (Price Waterhouse - PW) concerns without proper investigation. 2. Over-reliance on Legal Opinions: Auditors’ reliance on legal opinions can undermine their duty to act in the public interest, as highlighted by the U.S. Supreme Court in the 1984 Arthur Young case. 3. Misrepresentation of Financials: Material misstatements identified in RCL's financials, including portraying irrecoverable loans and investments worth Rs 12.8K crores as recoverable, and a potential shortfall in expected credit losses (ECL) under Ind AS 109 amounting to Rs 6.5K crores. - Reflective Insights: - The audit profession, especially in India, is criticized for not fully living up to its watchdog role as articulated in historical legal precedents and the ethos of ICAI. - The joint audit system is scrutinized for its inherent flaws, exemplified by past audit failures like the 1991 Bank of Credit and Commerce International disaster. Conclusion: NFRA’s stringent actions reflect a commitment to reinforcing audit standards and independence, serving as a critical reminder of the auditor's public watchdog role. #NFRA #AuditProfession #NFRAOrder #Assurance

Our Partner, CA Maneet Pal Singh, has shared his views on an article titled "NFRA to look at feasibility of ranking auditors," recently published in The Times Of India. “NFRA's consideration of ranking auditors based on qualitative parameters and governance matters highlights the evolving landscape of financial reporting and auditing standards. In the wake of concerns surrounding fraud detection and guidance effectiveness, collaborative efforts between regulatory bodies and professional institutions like the Institute of Chartered Accountants of India are crucial for enhancing transparency and accountability in the auditing profession. As auditors play a pivotal role in maintaining the integrity of financial information, it's imperative to ensure that standards align with global best practices, ultimately fostering investor confidence and trust in the reliability of financial reporting." Find the article link here: https://lnkd.in/gJt9JK3C #NFRA #Auditors #FinancialReporting #AuditingStandards #Governance #Transparency #Accountability #FraudDetection #RegulatoryFramework #ICAI #ProfessionalStandards #TimesofIndia #FinancialIntegrity #GlobalBestPractices #Collaboration #CorporateGovernance #FinancialRegulation #AuditQuality #FinancialTransparency #BusinessEthics #Compliance #enewspaper #article #CorporateTransparency #InvestorTrust #auditfirm #rank #ippasricha #ippcgroup

"NFRA likely to notify revised audit standards soon amid ICAI concerns" Aurelia Menezes, was quoted in Business Standard's recent article, discussing revisions to audit standards SA 600. She noted, “The proposed changes are critical to ensure principal auditors uphold their responsibilities, rather than relying solely on audits from component auditors.” Read more: https://lnkd.in/gxYZy2hk #AuditStandards #SA600 #NFRA #AuditReforms #CorporateGovernance #BusinessStandard #FinancialCompliance #AuditUpdates #KSK

Framework of Forensic Accounting and Investigation standards (FAIS) The Institute of Chartered Accountants of India (ICAI) has established the standards for Forensic Accounting and Investigations, ensuring meticulous scrutiny of financial crimes by its members in July 2023. ICAI's Forensic Accounting Standards offer a comprehensive framework, ensuring consistency, reliability, and professionalism in every investigation. Key highlights of these standards include key investigation guidelines, evidence-based findings, strict confidentiality, and ongoing learning for members. By following these standards, forensic accounting investigators can pinpoint financial irregularities precisely, safeguard stakeholders' interests, and maintain the financial ecosystem's Share your thoughts on the significance of forensic accounting investigations in the comments below! #ForensicAccounting #ICAI #FinancialInvestigations #Transparency #Accountability #Justice