The CA Institute’s central council has approved the formation of a Self Regulatory Organisation (SRO) to oversee the functioning of social auditors under the SEBI-notified framework for social stock exchanges.
The SRO is proposed to be named as “Institute of Social Auditors of India” and will be set up as a Section 8 company under the Companies Act 2013, under the aegis of ICAI.
Commenting on the central council decision, Debashis Mitra, President, ICAI, said, “ICAI has decided to form SRO with the vision to be a leading institution for the development of an independent, ethical, and world-class social auditors’ profession responding to needs and expectations of the stakeholders.” Sanjeev Kumar Singhal, Chairman of ICAI’s Auditing and Assurance Standards Board, told BusinessLine that the formation of SRO reflects the commitment of ICAI towards development of social enterprises and the social sector in line with the sustainable development goals.
“It’s a transformational step that will provide much needed funds for the social sector. The new class of auditors viz the social auditors will be an important pillar of social stock exchange since they will help install the confidence in the sector. The sector should come forward and use the opportunity in the right earnest”, he said.
It maybe recalled that SEBI had, on July 25, notified a framework for social stock exchanges that would pave the way for social enterprises with an additional avenue to raise funds. The idea of a social stock exchange was mentioned by the Finance Minister Nirmala Sitharaman in her 2019-20 Budget speech.
As per the recent SEBI notification, a social auditor is defined as an individual registered with a SRO under ICAI. To pursue the role of a social auditor, an individual must qualify a certification program to be conducted by the National Institute of Securities Market (NISM) and hold a valid certificate. ICAI is closely working with NISM in developing the course curriculum and the study material for the social auditor’s certification program.