Speaking about SA 600, the NFRA chief said the problem is that the work of the chief auditor is not guaranteed. | Featured Image
NFRA Chairman Ajay Bhushan Prasad Pandey on Tuesday said that the management’s efforts are to consolidate the best international standards, which are necessary for the country to have large accounting and auditing firms.
Between the NFRA and the chartered accountant body ICAI has a difference regarding the proposed changes in the accounting standards related to group audits, Pandey also raised the alarm that there has been a series of corporate failures in the country and emphasized the need for high quality report and audit bodies. .
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Speaking in a webinar on ‘Risk-Based Approach to ISQM-1: Building High Quality Audit Firms’, Pandey said the ambition is to incorporate the best global standards.
“We cannot build global auditing firms without following global standards,” he added.
ISQM refers to the International Standard for Quality Management.
He also said that there has been a series of corporate failures in the last ten years and the amount involved is around Rs 2 lakh crore, he noted.
The National Financial Reporting Authority (NFRA) has issued an order to disqualify some auditors and audit firms in relation to some of these failures.
According to Pandey, there is a strong desire to have large accounting and auditing firms in India, and the pre-requisite is to have global accounting and auditing standards in place.
“We cannot easily say that what we are doing is the best… it will be a negative opinion,” he said.
Speaking about SA 600, the NFRA chief said that the problem is that the work of the chief auditor is not certain in relation to the audit of groups.
“Our desire to be in line with international standards…” he said and added that in SA 600, the regulator is not doing anything different.
SA 600 deals with using the work of another auditor in the audit of the group’s financial statements.
On October 3, NFRA said that the existing obligations of statutory auditors are not interpreted correctly by the auditors section and emphasized that the auditors cannot argue that they did not perform proper procedures in the audit of the companies’ finances.
It also found that there were serious negligence and audit failures in the audit of group financial statements or cases of group audits involving different companies.
(Only the headline and image for this report may have been reused by Business Standard staff; other content is automatically generated from the trade feed.)
First published: October 08 2024 | 9:10 PM IST
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