ICAI focuses on enhancing audit quality
April 21, 2023
The first phase of peer review was implemented from April 1, 2022 for firms that audit listed companies.
With the aim of enhancing the quality of audits and improving transparency, the Institute of Chartered Accountants of India (ICAI) has launched the Audit Quality Maturity Model (AQMM) from April 1 and plans to launch the second phase of peer review from July 1.
“ICAI has mandated the Audit Quality Maturity Model from April 1 to all the firms falling under the specified criteria,” said ICAI president Aniket Talati, adding that these firms are required to compulsorily self-evaluate their audit quality maturity using the AQMM and get it reviewed by the peer reviewer alongside the peer review. The level of the firm arrived at by the peer reviewer will be hosted on the ICAI website, he told reporters on Thursday. Firms auditing listed entities, banks or insurance companies are mandated to get their audit quality maturity evaluation through AQMM rev v1.0, which aims to evaluate not only the audit engagements but also audit practice at the firm level.
The ICAI council has been working diligently to improve the quality of assurance services provided by its members, Talati said, adding that mandating peer review in a phase-wise manner is also one of the steps taken in this direction.
The first phase of peer review was implemented from April 1, 2022 for firms that audit listed companies. Since some of the auditors required to get themselves peer-reviewed under the second phase are not prepared, ICAI decided to defer it by three months to July 1, 2023. The second phase would include firms which propose to undertake statutory audit of unlisted public companies with paid-up capital of `500 crore or more, or with annual turnover of `1,000 crore or above, and practice units with five or more partners.
Meanwhile, stressing that ICAI has a zero-tolerance policy against any disciplinary case, Talati said it is working with the ministry of corporate affairs on the regulations for the new disciplinary mechanism and inclusion of non-chartered accountants is a “fait accompli”, as it is a part of the amendments to the Chartered Accountants, Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021. Under this, the ICAI disciplinary committee would include two CAs and three non-CAs.
Newly-elected ICAI president Talati said in a few cases, ICAI has also removed members from the register of members for life. “We are here to do the best for the profession and we have kept all possible mechanisms in place to tackle such cases,” he said. The total cases registered under the new disciplinary committee mechanism since 2007 till March 31, 2023 are at 6,766, of which 4,249 cases have been concluded in 2022-23, a total of 112 meetings of the board of discipline and disciplinary committee were held; hearings were concluded in 132 cases and punishments were awarded in 91 cases.”
[The Financial Express]
