MOHIT GUPTA’s Post

🔴 BIG NEWS : PwC, Deloitte, KPMG, Grant Thornton Bharat LLP have decided to halt non-audit services for audit clients. 🧐 But why? This move comes in response to the National Financial Reporting Authority (NFRA) stricter urge to avoid potential conflicts of interest. How will this benefit the industry? ✅ This decision can strengthen auditor independence as per SA -200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in accordance with Standards on Auditing. ✅ Potential conflicts that arise from offering both audit and consulting services to the same client will be eliminated. Thus, auditors can focus solely on their objective assessment role. What is the need of the hour for the companies ? 👉 Companies may need to re-evaluate their service providers. 👉 Those accustomed to receiving one-stop solutions for both audit and non-audit services might have to establish new relationships with consulting firms. 🔻 But do you think - Specialization is good ? 🔹Without any doubt it is a great step towards increasing specialization within the accounting industry and focussing on core audit aspects deeply. But on the other hand it could have a negative impact. ✅ Restricting the provision of non-audit services may limit auditors' knowledge and skills, potentially resulting in a poorer understanding of businesses and a lower likelihood of identifying key issues. ✅ It could affect the quality of audit judgments and increase the likelihood of undetected misstatements. What are your views on the same? I personally feel that this move by top Indian audit firms signifies a growing focus on auditors' independence. 🔹 Audit firms will now focus solely on audit services while consulting firms compete for non-audit work. While it might bring changes to client service models, it ultimately aims to strengthen public trust in the financial reporting process. Let's wait and see how the accounting industry adapts it in the long run. Follow CA Archit Agarwal for more such insightful posts. #auditing #big5 #big4 #nfra #auditandassurance #ey #kpmg

IN CASE YOU MISSED IT: Big changes are coming. The NFRA is planning to inspect top audit firms! Again!! For those unaware, the National Financial Reporting Authority (NFRA) announced in November 2022 that it would be inspecting the Big 5 audit firms (Deloitte, PwC, EY, KPMG, and Grant Thornton Bharat LLP) to check factors like governance structure, compliance, quality control review, and individual audit file inspection. In December 2023, the organization published a report that disclosed severe lapses in audit practices by all firms! Insufficient documentation was a common occurrence among all firms while certain firms’ group entities provided non-audit services to audit clients! There were multiple accounts of non-compliance observed as the inspection revealed several threats to auditor independence!! Now, the entity is planning a fresh round of inspections in March for these firms to check whether they took corrective action to comply with the lapses mentioned in the December report. Moreover, the NFRA will be engaging with the CFOs and audit committees of the companies as well this time to get a comprehensive understanding of the issues. Is this a good decision?? Follow Jobaaj Stories (the media arm of Jobaaj.com Group) for more. #big4 #audit #nfra #inspection #check #currentaffairs

NFRA initiated the inspection over the Big4 Firms❗️ Why? 🌟 Ensure adherence to Auditing and Accounting Standards and pronouncements. 🌟Rise in the cases of financial scams, irregularities, frauds and misconduct. Pros: ✅ Enhanced Financial Reporting ✅ Transparency and Accountability in Practices #Ey #pwc #nfra #deloitte #kpmg #grantthornton #NFRA #auditing #India #Big4 #financialreporting

🔴 Big News: NFRA to start inspection of all Big 4 firms!!! All you need to know under a minute ⬇️ 👉  In 2024, the National Financial Reporting Authority (NFRA) will inspect the Big 4 Audit firms—Deloitte India, EY (SRBC & Co), KPMG (BSR & Co), and PwC — along with Walker Chandiok & Co (Grant Thornton) and other top auditors of large listed entities. But why? 👉 This is to ensure compliance with The Institute of Chartered Accountants of India (ICAI)'s audit standards and guidelines. 🔹 The NFRA's 2024 inspection of major audit firms will focus on: → Provision of non-audit services, which can cause conflicts of interest. → Auditors' independence and communication with company directors. → Documentation of auditors' assessments. The regulator is determined to enforce audit quality, marking the 2nd consecutive year of scrutiny for the Big 4. Approximately 60 listed companies will be examined for compliance with auditing standards. 🔻But why are such steps being taken? → Increasing cases of scandals, cases of professional misconduct and irregularities in audit and compliance. →  Regulators are issuing orders against auditors involved in professional misconduct. 🔹 How is this going to help the Auditing Industry? → I think these measures will enhance the quality of financial reporting. → And this will also result in greater transparency and accountability in the auditing profession. 👏 To conclude : Overall, the NFRA's inspection of the Big 4 audit firms and other top auditors is a significant step towards ensuring the quality and integrity of financial reporting in India. So what are your views on this? Share your thoughts in the comments? Follow CA Archit Agarwal for such financial insights. #Ey #pwc #nfra #deloitte #kpmg #grantthornton

📊 Work Stress in the Audit Profession: A Growing Challenge As the audit profession evolves, the pressure on auditors is intensifying. The demands of tight deadlines, increased regulatory scrutiny, and a surge in required disclosures are pushing professionals to their limits. Recently, the unfortunate passing of an audit professional has highlighted just how critical it is to address work stress in this field. Key factors contributing to this rising pressure: Clients pushing for earlier financial results, shortening operational windows. Complex audits driven by expanding companies, IFRS adoption, and stricter MCA disclosures. Heightened scrutiny from regulators like NFRA, making documentation and compliance more demanding. Limited fee increases, despite rising market capitalization, sales, and profits, impacting firms' profitability. The struggle to attract and retain top talent as bright professionals are opting for advisory roles over audit. It's evident that stress management within professional service firms, particularly in audit, is not just an HR matter but a strategic concern that affects the entire organization. The focus must shift toward creating healthier work environments, setting realistic client expectations, and leveraging technology to ease manual workloads. Let's continue the conversation on how the industry can adapt to these growing challenges while safeguarding the well-being of our audit teams. #Audit #WorkLifeBalance #ProfessionalServices #MentalHealth #Leadership #EY #Deloitte #Big4

Initial findings of #NFRA are welcome and will build trust and confidence in audit. As per the Chairman of NFRA, there is a greater awareness among firms of issues related to independence and audit firms are fixing issues which were pointed out in in the inspection of Big 5 firms done last year adding that we have to go another mile to ensure that other firms too comply with the independence requirements in letter and spirit. #Big4 #auditinspections #auditfirms #auditorsindependence #audit #auditors #charteredaccountants #nfra The Institute of Chartered Accountants of India (ICAI) Business Standard #pwc #kpmg #ey #deloitte #gt #codeofethics

🔍 Exciting News in the Auditing Sector! 🔍 🎉 Major audit firms in India have taken a monumental step towards enhancing transparency and credibility in the auditing process. 🎉 🔍 In a bid to uphold the principles of independence and integrity, top auditors including Deloitte, EY, KPMG, and PwC have announced that they will no longer offer non-audit services to their audit clients. 🔍 📈 This strategic decision signifies a commitment to prioritizing objectivity and eliminating potential conflicts of interest in the auditing profession. 📈 💼 As the auditing landscape evolves, this move is set to have profound implications for audit firms and their clients alike. 💼 🔒 While audit firms may experience a shift in revenue streams, they stand to gain enhanced trust and credibility in their audit engagements. 🔒 🌟 Clients, on the other hand, can rest assured knowing that their audit engagements are conducted with the utmost impartiality and integrity. 🌟 🌐 This development aligns with global trends and emphasizes the importance of maintaining independence and objectivity in audit services. 🌐 👉 Stay tuned for more updates as the auditing profession continues to adapt and innovate to meet the evolving needs of stakeholders! 👈 #Auditing #Transparency #Independence #Credibility #FinancialReporting #CorporateGovernance #Accounting #BusinessUpdates

In the NIFTY50 Index, 43 non-government and 7 government companies are listed. The latest (FY2023) Annual report reveals that most of the listed companies' Audit and Assurance services are dominated by Big4 firms. A total of 64 auditors were appointed, 36 companies appointed one, and 14 companies appointed Joint auditors (Appointed more than 2 auditors counted as 2 auditors only). Out of 64, 14 were appointed by government companies. Interestingly, the report shows 56% of shares are of Big4 firms and 44% are of other firms. The % share becomes 69% and 31% when you exclude government companies. Deloitte Haskins & Sells LLP tops with 20% and 25% shares followed by KPMG at 16% and 19%, followed by EY and PWC. #big4 #statutoryaudit #annualreport #delloite #audit #auditing #icai

TOP AUDIT FIRMS RANKING✨✨ India's Big Six audit firms reign supreme, but for how long? 👉🏻67% of Nifty-500 companies entrust them with their finances (323/483) 👉🏻32.5% of all listed companies rely on them (637/1961) ✨EY takes the crown, auditing 164 companies, followed closely by KPMG (141) and Deloitte (119) ✨BUT, audit rotation regulations are about to change the game! 👉🏻222 auditors in 209 companies face tenure expiries in 2024-25 👉🏻224 auditors in 215 companies in 2025-26 👉🏻A whopping 883 auditors in 868 companies in 2026-27 📌📌Who will seize the opportunity?👀👀 Drop your thoughts into the comment section ✅✅ #AuditFirms #Nifty500 #ListedCompanies #AuditRotation #RegulatoryChanges #linekdin #audit #topfirms #kpmg #ey #ranking #india

🔵 Good news in the field of Auditing Industry So what's the news ? 👉 NFRA's Second Inspection of Big Five Firms Shows Positive Trends in Audit Quality. The National Financial Reporting Authority (NFRA) recently completed its second inspection of the audit arms of the Big Five firms, and the initial findings are encouraging. Here's what you need to know: 📌 There's a growing awareness among firms about issues related to independence. Many have proactively addressed concerns raised during the inspection. 📌 Most firms have implemented measures, especially related to separating audit and non-audit services. NFRA Chairperson Ajay Bhushan Pandey highlighted these positive steps. 🔹 Firms are self-declaring and adopting policies to avoid providing non-audit services to their audit clients or associates. However they have emphasised the need for continued compliance. 🔵 How shall one improve their processes through inspections and it's outcomes? NFRA’s inspections, highlighting gaps in documentation and standards violations, should be seen as opportunities for improvement rather than negative assessments. One of the Big-5 firms praised these inspections as constructive exercises to enhance audit quality, commending NFRA’s initiative. The rigour of annual inspections bolsters trust in audit quality. NFRA is establishing an innovation lab to support auditing techniques and is focusing on AI tools to streamline their work. Let's commend NFRA's commitment to maintaining high audit standards. What are your thoughts on the same and share your learnings? Follow CA Archit Agarwal for such insights and repost if found useful. #Big 4 #kpmg #nfra #audit #deloitte #ey #pwc #grantThornton