The Institute of Chartered Accountants of India ( ICAI ) Central Council is set to deliberate on September 17 about the proposed revisions to auditing standard SA 600, as suggested by the National Financial Reporting Authority ( NFRA ).
These changes have sparked concerns within the Institute of Chartered Accountants of India ( ICAI ), as they may lead to the concentration of audit work among a few large firms, potentially sidelining small and medium-sized auditors. The discussion is crucial as it could significantly impact 1.60 Lakh practising Chartered Accountants and 96,000 smaller audit firms across India.
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SA 600, the Standard on Auditing, outlines the guidelines for situations where a principal auditor relies on the work of another auditor for a group entity. NFRA has proposed aligning this standard with international norms, which would increase the responsibilities of the principal auditor for the audit work done by other auditors within the group.
ICAI officials and stakeholders have raised concerns that this could disadvantage smaller firms, as principal auditors might favour a limited number of large firms, leading to reduced opportunities for smaller auditors.
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Amid these apprehensions, ICAI has already submitted its observations to NFRA and will be discussing the issue further in its September meeting.
ICAI President Ranjeet Kumar Agarwal reiterated the importance of this debate, noting the broader implications for the auditing profession in India. NFRA, which has the authority to regulate auditors of large and listed companies, has recently criticised principal auditors for not fully adhering to SA 600 requirements in some cases.
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