Regulatory Alerts || Faqonline.org

The regulatory updates publication issued by the Foundation for Audit Quality (FAQ) highlights the latest developments in accounting, auditing and regulatory developments in India and internationally.

Regulatory updates for the month of January 2023

On 25 July 2022, the Securities and Exchange Board of India (SEBI) had introduced regulations pertaining to the Social Stock Exchange (SSE) by making amendments to various regulations. As per the amendments introduced, a Social Enterprise (SE), which is either registered with or has raised funds through an SSE, should submit an annual impact report to the SSE. The annual impact report must be audited by a social audit firm, employing social auditor(s). In this regard, the Institute of Chartered Accountants of India (ICAI) was entrusted with the responsibility of being the self-regulatory organisation for regulating the profession of social auditors.

On 14 January 2023, ICAI released 16 Social Audit Standards (SAS), each corresponding to a specific thematic area (as suggested by SEBI) which would qualify as eligible activities for the purpose of establishing primacy of social intent. Subsequently on 4 February 2023, ICAI also issued the Framework for SAS (framework) which provides basic principles for social audit of projects/programs/project-based activities and provides guidance on matters relating to preparation of social audit report.

Additionally, SEBI, on 17 January 2023 issued following amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations):

Amendment in the definition of ‘senior management’
Shareholders’ approvals for re-appointment of directors or managers
Additional disclosures of subsidiaries in corporate governance reports
REITs and InvITs to comply with the governance norms prescribed in their regulations

This issue of the regulatory updates publication covers some of the important updates on auditing and regulatory matters for the period from 1 January 2023 to 31 January 2023. It also highlights some of the action points that auditors may consider when applying the relevant provisions.