SEBI issues Procedure, Formats for Limited Review, Audit Reports [Read Circular]

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The Securities Exchange Board of India ( SEBI ) has issued procedure and formats to be followed for limited review and audit report of listed entities. The procedure would also be applicable for the entities whose accounts are to be consolidated with the listed entity.

SEBI, the market watchdog, as per the recommendations made by Uday Kotak-led panel on corporate governance, had decided to bring amendments amendment in the regulations for group audit after taking into consideration.

A new sub-regulation has been inserted in LODR (Listing Obligation and Disclosures Requirements) norms. It requires the statutory auditor of a listed entity to undertake a limited review of the audit of all the entities/ companies whose accounts are to be consolidated with the listed entity as per AS (Accounting Standard) 21. This has to be done in accordance with guidelines issued by the board.

A new format for limited review reports and audit reports has been issued on Friday by SEBi which is applicable from 1st April 2019, i.e, Today.

Insurance companies would follow formats as prescribed by insurance sector regulator IRDA, as per the circular.

The new formats would be applicable for all listed entities whose equity shares and convertible securities are listed on a recognized stock exchange and the statutory auditors of such entities.

It would also have to be followed by all entities whose accounts are to be consolidated with the listed entity and the statutory auditors of entities whose accounts are to be consolidated with the listed entity.

The Institute of Chartered Accountants of India ( ICAI ) may consider issuing necessary guidance to Chartered Accountants ensure compliance with the circular, the SEBI said.

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