ICAI for Peer Review of Certain Firms to Enhance Audit Quality

The Institution of Chartered Accountants of India (ICAI) has mandated a peer review mechanism for certain categories of firms to be rolled out it phases over the next three years.

“Peer review mechanism for certain categories of firms rendering assurance services to specific class of entities and will go a long way in enhancing the audit quality,” said ICAI president Nihar N Jambusaria.

The implementation will be in a phased manner from April 1 and will first apply to practice units (firms) that have undertaken statutory audit of enterprises and whose equity or debt securities are listed in India.

The second phase is for the firms which have undertaken statutory audit of unlisted public companies having annual turnover of not less than Rs1,000 crore or having, in aggregate, outstanding loans, debentures and deposits of not less than Rs500 crore as on the March 31 of the immediately preceding financial year.

The third phase covers firms which have undertaken statutory audit of entities and have raised funds from public, banks or financial institutes of over Rs50 crore during the period under review or of any body corporate, including trusts which are covered under public interest entities. The last leg of the mandate covers firms conducting audits of branches of public sector banks.

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