The Institute of Chartered Accountants of India (ICAI) will raise concerns with the Ministry of Corporate Affairs (MCA) over revisions to two audit standards, sources in the institute told Business Standard.
After its 18th board meeting on Tuesday, the National Financial Regulatory Authority (NFRA) recommended revisions to 40 Standards on Auditing (SA), including SA 600 and SA 299, which deal with group and joint audits, respectively.
ICAI contends that directly adopting global standards, such as amendments to Standards of Audit (SA) 600 and SA 299, may not align with India’s unique economic and regulatory environment.
The proposed changes, which NFRA has argued are necessary to address gaps identified in high-profile financial scandals involving companies like IL&FS, Reliance Home Finance, and Café Coffee Day, aim to enhance auditor accountability. However, ICAI officials believe the approach could lead to unintended consequences.
NFRA, however, maintains that these amendments are vital to curbing fraud and streamlining audit responsibilities. The regulator’s recommendations will be reviewed by MCA before final implementation.
ICAI’s stance underscores its commitment to ensuring that any regulatory changes enhance transparency and accountability without compromising the practical realities of India’s auditing landscape. The outcome of this dialogue between ICAI, NFRA, and MCA will significantly influence the future of auditing practices in India.
