NFRA Issues Second Audit Practice Toolkit on ROMM Assessment to Strengthen Audit Quality for Small & Medium Practitioners [DOWNLOAD TOOLKIT]

The NationalFinancial Reporting Authority (NFRA) issued a second audit practice toolkit on January 1, 2026, to improve and strengthen the overall quality of auditing practices in India.

This initiative was part of NFRA’s recent effort to conduct outreach programs for audit firms and audit practitioners, especially small and medium-sized practitioners.

The Audit Practice Toolkit is titled ‘Risk & Response Memorandum: ROMM (Risk of Material Misstatement) Assessment at Assertion Level for Revenue A Sample Document’.

This toolkit will address one of the most crucial phases of the audit process, which involves assessing ROMM for various material financial statement line items. The NFRA began issuing toolkits in November 2025 for improving the quality of audit practice in India.

The chairperson of NFRA, Nitin Gupta, said that the sample document is adaptable to different types and sizes of audit engagements.

So this document is said to be a practical guide for the small and medium practitioners who can use it in accordance with the facts and circumstances of their audit engagements.

The objective of the document is to promote awareness of auditing and accounting standards and audit quality as part of NFRA’s education, training, seminar and advocacy initiatives, especially in support of the outreach activities being conducted, and in response to the feedback being received through such engagements. The doc provides an insight that Risk assessment lays the foundation for the overall audit approach.

The contents of the document include,

A Background- Professional Standards’ Requirements

B Risk of Material Misstatement (ROMM) for Revenue-Audit of Dhanvantri Limited by CA. Ram Lakhan & Associates

1) Review and Signoff by Engagement Team

2) Observations from Detailed Analysis of Financial Performance of Dhanvantri Limited

3) ROMM Work Paper for Revenue (Sale of Products) of Dhanvantri Limited

4) Audit Firm’s Staff Guidance on ROMM

The NFRA said that it is planning to issue sample Audit Practice Toolkits for the rest of the financial year in various other important audit areas.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates