While doing so, it has proposed to limit it to the audit of listed personal firms – which account for below 2% of the 17 lakh lively firms within the nation. In the method, it additionally sought to dismiss considerations of small audit companies being hit by the transfer.
While the International AS 600 was revised in 2009 and 2023, a bunch of auditors have blocked an identical revision in India, regardless of RBI and Sebi backing the plan. “We are still riding in a Santro car when the world has moved to modern vehicles,” stated an official.
In its 35-page session paper, NFRA has highlighted how the hole – which doesn’t let the principal auditor coordinate with different auditors of subsidiaries and even check paperwork – has led to a number of failures from Reliance Capital to Reliance Home Finance, Reliance Commercial Finance, DHFL, IL&FS, and Cafe Coffee Day.
Analysing knowledge, it identified how 100 listed firms (excluding banks and insurance coverage firms) had a number of subsidiaries, affiliate firms, and joint ventures with no less than 23 having over 50 such entities, whereas 76 had abroad entities. In a number of of those firms, over 50% of the online property had been from subsidiaries, associates, and JVs.
Citing the rise in demat accounts, mutual fund SIPs and pension schemes, the paper stated: “The primary reason for proposing adoption of a revised atandard for group audits is to help safeguard public interest and investor protection, and the need for a standards framework that is robust enough to meet the challenges posed by complex financial systems today. The inherent complexity of group structures… cannot be handled by the 2002 version of SA 600 and the related provisions across other standards.”
NFRA additionally stated varied panels have underlined the necessity to converge home and world requirements.
