Regulatory updates

This publication is a compilation of some common non compliances regarding Standards on Quality Control, Standards on Auditing, audit reports, CARO, internal financial controls observed by QRB while conducting quality reviews. It also contains suggested guidance on these common non compliances. The publication has two parts, which are as follows:

• Part 1 contains the observations related to Engagement and Quality Control Standards.
• Part 2 contains the observations related to CARO and internal financial controls.

Proposed effective date: To access the text of Part 1 publication, please click

The comment period on the above exposure draft ended on 2 August 2024

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To access the text of Part 1 publication, please click click here

To access the text of Part 2 publication, please click click here

In March 2024, the Central Bureau of Direct Taxes (CBDT) had notified changes to the Form 3CD and 3CEB Income-tax Act, 1961. Some of the key changes introduced in Form 3CD (tax audit) are as follows:

• To report expenditure incurred to compound an offence and expenditure incurred to provide any benefit or perquisite which is in violation of any law or rule or regulation or guideline under clause 21(a) of Form 3CD.
• To report sums payable to micro or small enterprises which are not paid within the time allowed under Section 15 of MSMED Act, 2006, under clause 26 of Form 3CD.
• Minor changes to include all the applicable sections introduced through the Finance Act 2023, in reporting under respective clauses of Form 3CD.

In this regard, the ICAI has issued an implementation guide on revision in Forms 3CD and 3CEB. These amendments in the guide pertain to various clauses²⁹ Clauses 8A, 12, 18(ca), 19, 21(a), 22, and 32(a) of Form 3CD of Form 3CD, as well as Part C (Specified domestic transactions) in the Annexure to Form No. 3CEB. The guidance in the implementation guide relating to Form No.3CD has to be read along with the Guidance Note on Tax Audit under Section 44AB of the Income-tax Act, 1961 (Revised 2023). Similarly, guidance relating to Form No.3CEB has to be read along with the Guidance Note on Report under Section 92E of the Income-tax Act, 1961 (Revised 2022).

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To access the text of the implementation guide, please click click here