Regulatory updates

Recently, ICAI issued certain FAQs relating to professional ethics of members pertaining to bank assignments (the FAQs). Some key matters clarified by the FAQs include:

• Long Form Audit Report (LFAR): One of the FAQs mentions that: Whether the concurrent auditor of a branch of a bank can undertake the assignment of LFAR of the same branch? In this regard, it has been provided that the concurrent auditor of a branch can undertake the assignment of LFAR only with respect to branches which are not subject to statutory audit. With regard to other branches, the LFAR assignment should be undertaken by the statutory auditor.
• Miscellaneous certification: The FAQs clarify that the concurrent auditor/internal auditor may undertake the assignment of certification for a bank branch, only if the certificates are addressed to the bank's management i.e., not addressed to the statutory auditor/regulator etc.
• Certification of audited financial statements: The FAQs state that a concurrent auditor/internal auditor can neither perform statutory audit of the financial statements of a bank branch, nor certify them as audited financial statements.

To access the text of the FAQs, please click here

The ICAI has formed an Expert Panel (the panel) in order to provide necessary support to the members in practice with respect to their queries on auditing aspects (pertaining to statutory audits) with the objective of enhancing audit quality.

The panel will address the queries from 17th April, 2023 till 30th September, 2023.

The queries are to be sent at email address: auditfaq@icai.in .

IFRS 9, Financial Instruments replaced IAS 39, Financial Instruments: Recognition and Measurement. Consequently, the International Accounting Standards Board (IASB) started the post-implementation review of IFRS 9 by looking at the classification and measurement requirements.

In this regard, ICAI has now requested for public comments on the request for information on post-implementation review of IFRS 9.

Comments can be sent to ICAI by 31 July 2023.

Comments can be sent to IASB by 27 September 2023.

To access the text of the post-implementation review, please click here

ICAI has hosted on its website the request for information on post-implementation review of IFRS 15, Revenue from Contracts with Customers issued by the IASB, which as a part of its review of the new requirements in IFRS 15 is seeking feedback from the stakeholders.

Comments can be sent to ICAI by 31 August 2023.

Comments can be sent to IASB by 27 October 2023.

To access the text of the post-implementation review, please click here

On 19 August 2023, ICAI issued a clarification regarding the authority attached to the documents issued by it.

The clarification states that while the accounting and auditing standards are required to be complied with, the guidance notes are recommendatory in nature. Further, in cases where the recommendations of the guidance note have not been complied with, then disclosures should be made on why alternative procedures were adopted and the reason why guidance note was not complied with. In such cases, auditors should review whether the guidance note has been complied with, and where it has not, then they may consider a disclosure in the audit report regarding such fact.

To access the text of the ICAI clarification, please click here

The Central Board of Direct Taxes (CBDT), vide a circular dated 20 October 2023 extended the due date of filing of report of the accountant under Clause 8 of Section 10AA, read with Clause 5 of Section 10A of the Income Tax Act, 1961 for Assessment Year (A.Y.) 2023-24 to 31 December 2023.

To access the text of the circular, please click here