In an apparent bid to enhance audit quality, the CA Institute has set up an expert panel to support practising chartered accountants. It will address queries and concerns on auditing aspects related to the statutory audits.
The panel, set up by the Auditing and Assurance Standards Board (AASB) of the CA Institute, will address queries from April 16 to September 30, sources close to the development said.
Several thousand corporate entities are now being audited by small and medium-sized practitioners; it is expected that they will benefit from the guidance of the panel.
The identity of these experts may not be revealed; however, the views expressed by the panel would be their personal views and not necessarily the views of the AASB. Also, these views cannot be used as evidence in any non judicial, quasi-judicial or judicial proceeding before any authority.
Sanjeev Kumar Singhal, Chairman, AASB, and Vishal Doshi, Vice Chairman, AASB, will be the convenors.
Greater accountability demanded
This move comes at a time when there is widespread demand for accountability from statutory auditors, especially after the spate of audit failures in recent years. The government recently tightened the framework of disciplinary mechanism for auditors, and enacted provisions to appoint a non-member as Presiding Officer of the disciplinary committee in these institutes.
Finance Minister Nirmala Sitharaman, in a recent reply to the Rajya Sabha during the discussion on the CA Bill, had stressed the need to bring in a level of “accountability” of statutory auditors. She had noted that the sanctity of audited financial statements has to be maintained, especially because the country has witnessed rapid changes in the way its economy has progressed.
With the rapidly evolving business environment, introduction of new-age companies and start-ups, increased number of companies going public, and increasing regulatory and reporting requirements, the role of auditors has increased manifold.
Commenting on the move, G Ramaswamy, former CA Institute President, told BusinessLine that this initiative would strengthen audit quality. It would be useful guidance for small and medium-sized practitioners across the country.
“It is one of the best initiatives started by ICAI’s Audit and Assurance Standards Board,” said Ramaswamy, who was a member of the MCA-appointed Company Law Committee (CLC) that recently submitted its third report.
The CLC had, among other things, made recommendations for reviewing and strengthening the audit framework, and introducing mechanisms to ensure the independence of auditors. It also had suggestions on standardising the manner for auditors to provide qualifications.