Siddu Sangolli’s Post

The article outlines the legal framework and regulatory requirements for statutory audits in India, emphasizing the role of the Companies Act, 2013, in mandating audits for companies. It details the responsibilities of auditors, regulatory bodies like the Ministry of Corporate Affairs (MCA), Securities and Exchange Board of India (SEBI), and the Institute of Chartered Accountants of India (ICAI) in ensuring compliance and integrity. Additionally, it highlights the importance of audit committees in corporate governance and the rigorous compliance requirements that uphold audit standards. For more details, you can read the full article https://lnkd.in/d36FbWQX #StatutoryAudit #Audit #legalframework #work #blog

"We shouldn't get deterred by some perceived emotion of some pain" NFRA Chief says. And also asks a very redundant question "Will we make our mark in corporate governance and also in the Accountancy and auditing profession across the world?" Yes, India has made a mark in the world of technology, but were we also not the first civilisation to put in processes, and, accountability through structured accounts and audit. Read Chanakya please. Learn to collaborate with ICAI, we have been here for 75 years. We collaborate, we innovate and we have many firsts. Our members are sought after across the world for their professional accomplishments and acumen. We are already global, our standards our global and our vision is global. And as an Institution, we have to balance the interests of all stakeholders including members. While to sustain democratic views we may need an independent Regulator, it will be appreciated more if the Regulator recognises that the Institution has been around and has been making a mark globally. ICAI + NFRA will be a global model instead of ICAI or NFRA standalone, and the global bodies will continue to emulate us. https://lnkd.in/ggBbQuZX

"Supreme Court Upholds NFRA's Authority to Take Action Against Auditors: Dismissal of CA Sam Varghese's appeal” Here's a summary of the decision: **Case Background**: The case involves an appeal by CA Sam Varghese against an order from the National Company Law Appellate Tribunal dated December 1, 2023, which itself was a response to actions taken by the NFRA. **Supreme Court's Decision**: The Supreme Court decided not to interfere with the decision of the National Company Law Appellate Tribunal, effectively dismissing the appeal brought by CA Sam Varghese. The court also disposed of any pending applications related to this case. **Significance of the NFRA's Role**: This case underscores the authority of the NFRA to take actions against auditors it deems to have erred or breached regulatory standards. This is highlighted by the Supreme Court's decision to uphold the Tribunal's ruling, reinforcing the NFRA's role in overseeing financial reporting and audit standards. **Legal Proceedings**: The decision provides insight into the procedural aspects of handling such appeals in the Indian judicial system, including the submission of appeals, the response from the opposing party (NFRA in this case), and the ultimate decision by the Supreme Court. Overall, this decision is important for understanding the enforcement of audit standards in India and the judicial processes that support or challenge such enforcement actions. Stay Connected Bhupendra Mantri KALANI & AFFILIATES

NEW DELHI: The Institute of Chartered Accountants of India (<!-- -->ICAI<!-- -->) on Friday requested regulator National Financial Reporting Authority (<!-- -->NFRA<!-- -->) to pause the proposed adjustments in the auditing commonplace <!-- -->SA 600<!-- --> associated to <!-- -->group audits<!-- -->, probably setting the stage for a confrontation.In a press release, ICAI argued that the transfer by NFRA got here as a shock and sought extra time for complete evaluate and discussions with all stakeholders.Sources countered ICAI’s declare, saying that the difficulty has been pending since 2009 and NFRA has been elevating the matter periodically, beginning with 2020, which was adopted by one other request in 2021. Even in April 2024, the difficulty was flagged to ICAI, which had sought time to check the proposal, mentioned a supply, including that for 15 years, the company was in “permanent pause mode” on the difficulty.“The ICAI Council, in its meeting held on Sept 17, 2024, expressed its view that while the current SA 600 has been effective and has stood the test of time, there is room for further review and strengthening to better serve public interest. The Council has tasked the Auditing and Assurance Standards Board with this review and start the process of reviewing the standard for exposure as has been the practice in ICAI,” the company, which regulates bulk of the auditors in the nation, mentioned, including that NFRA’s session paper was issued on the identical day because the council assembly. It mentioned it should ship inputs after session course of is accomplished.The NFRA paper, sources mentioned, has addressed a number of of the problems that was flagged by ICAI. NFRA, which was arrange after enactment of Companies Act 2013, was not notified for a number of years, with govt blaming it on intense lobbying by ICAI.

📢 ICAI’s New Standards Face Legal Void by NFRA - A Wake-Up Call for Regulatory Clarity in Financial Reporting In a recent development that could have significant implications for India’s financial ecosystem, the National Financial Reporting Authority (NFRA) declared the new quality control and auditing standards proposed by the Institute of Chartered Accountants of India (ICAI) legally void. This ruling highlights the regulatory complexities that can emerge when professional standards evolve without clear alignment across oversight bodies. Here’s what’s at stake:   Impact on Auditing Standards ICAI’s new standards aimed to enhance auditing frameworks. However, NFRA contends that only standards explicitly notified by it hold legal weight, raising questions about ICAI's authority to implement changes autonomously.  Regulatory Landscape: NFRA’s stance reiterates the need for a unified regulatory approach in financial reporting to maintain investor confidence and safeguard against compliance issues. A fragmented oversight could lead to inconsistencies that affect transparency and accountability. Looking Ahead: This issue underscores the importance of cohesive regulatory practices for professionals, organizations, and the capital markets. It may also prompt further dialogue on the roles and responsibilities of financial bodies like ICAI and NFRA in setting legally binding standards. In this evolving space, clarity and collaboration among regulatory entities are crucial for maintaining trust in India’s financial reporting and auditing standards. #FinancialReporting #RegulatoryCompliance #AuditStandards #NFRA #ICAI #CorporateGovernance #IndiaFinance https://lnkd.in/gdyUCPCr

🚨 NFRA Raises Objections to ICAI’s Revised Audit Standards 🚨 The National Financial Reporting Authority (NFRA) has objected to the Institute of Chartered Accountants of India’s (ICAI) recent revision of audit standards, calling it “illegal” due to a lack of consultation. Despite a directive from the Ministry of Corporate Affairs, ICAI released the new standards without NFRA’s input. NFRA plans to review these standards in their November board meeting. The new standards, SQM1 and SQM2, are set to take effect in April 2025 and April 2026, pending NFRA’s approval.

Audit Quality: Regulatory Bodies Set for a Tussle With the NFRA and ICAI at odds over audit quality standards, the spotlight is on how audits are regulated in India. The ongoing debate centers around improving transparency, ensuring accountability, and protecting stakeholders from financial misreporting. This is a crucial discussion for chartered accountants, as it could lead to changes in audit regulations that impact daily practices. What’s your take on this issue? Share your thoughts in the comments. Read the complete article here: [Link to Article] #AuditQuality #CharteredAccountants #RegulatoryCompliance #FinancialTransparency #ICAI #unpaper #practicemanagement

💼Let's Understand what is ICAI vs. NFRA Case 📍What is the ICAI vs. NFRA case about? The case involves a disagreement between the Institute of Chartered Accountants of India (ICAI) and the National Financial Reporting Authority (NFRA) over proposed changes to auditing standards in India. 📍What are the changes suggested by NFRA? NFRA wants to: Revise auditing standards to align with global practices. Make the lead auditor responsible for the entire audit, including subsidiaries. Ensure joint auditors are "jointly and severally responsible," meaning they share equal responsibility for errors 📍Why does NFRA want these changes? NFRA believes these revisions will: Improve the quality and accountability of audits. Reduce cases of financial fraud, such as siphoning funds by promoters. Align Indian practices with international standards like those in the UK and Australia 📍Why is ICAI opposing these changes? ICAI argues that: The current system has worked well for years. The proposed changes will increase costs and duplicate efforts. They could lead to the domination of large audit firms, making it harder for smaller firms to compete 📍What is the impact of this disagreement? The government must decide whether to approve NFRA's recommendations. The debate highlights a broader issue: balancing stricter regulations with professional independence in auditing 📍When will the changes take effect if approved? If approved by the Ministry of Corporate Affairs, the changes are planned to take effect from April 2026 This case reflects the struggle between regulators aiming for stricter oversight and professionals advocating for practical implementation. What are your views on this? Please let me know in the comments Creeva Accounting & Tax Consultancy

ICAI seeks pause on change in key audit rule Full Article Link >>> https://lnkd.in/gH7qcu6f Welcome To Latest IND >> Fastest World News NEW DELHI: The Institute of Chartered Accountants of India ( ICAI ) on Friday asked regulator National Financial Reporting Authority ( NFRA ) to pause the proposed changes in the auditing standard SA 600 related to group audits , possibly setting the stage for a confrontation.In a […] . . Latest IND . . . . #trendingnews #newstrending #trendingtopicnews #lifestyle #business #news #healthylifestyle #smallbusiness #supportsmallbusiness #lifestyleblogger #luxurylifestyle #businessowner #businesswoman #smallbusinessowner #businessnews

2/4 Why independence is required? The need for independence arises because in many cases users of financial statements and other third parties do not have sufficient information or knowledge to understand what is contained in a company financial statement. Thus, they rely on the auditor’s independent assessment. Public confidence in financial markets and the conduct of public interest entities relies partly on the credibility of the opinions and reports given by auditors in relation with financial audits. Hence, it is paramount important that auditor is independent to the client. Why are there frequent violations of Independence rules? The question is, if maintaining the independence is so important and straight forward activity for an auditor, why there are so many cases worldwide for the violation of auditor’s independence? There may be many reasons behind it, but few general perceptions which people have are discussed hereunder: a)   Lack of regulatory framework One of the common views is that there is no proper regulatory framework in India to regulate the auditor’s independence and such insufficiency in regulatory framework often fails to redress auditors’ ethical dilemma and ultimately lead them to compromise their independence. However, I personally do not agree with this argument, reason being: In our country, regulatory framework related to independence matters have various litratures such as the Companies Act, 2013 (section 139 to 148 of Chapter X), the Chartered Accountants Act, 1949 (Sub Section (2) of Section 2), SQC 1, SA 200, professional Code of Ethics and other relevant guidance provide by ICAI. These framework contains detailed and sufficient guidance for an auditor to follow and address the independence related issues. Therefore, it might not be right just to blame insufficiency of regulatory framework for the violations. b)   Lack of enforceability of regulatory framework This is certainly an area of concern and require immediate attention of the regulators. If the regulatory framework governing independence is not properly enforced, the auditor independence is not protected. In recent past, it was observed that auditors did not comply the rules defined under the Companies Act, 2013 and applicable Standards of Auditing (SA) related to auditor’s independence while performing the audit engagements which leads them towards the impairment of the independence. It is also important for the regulators to strictly enforce the rules and ensure timely action against the auditor or audit firm in default.