The weekly messenger | Edition 06.22
This newsletter is a weekly compilation of accounting, auditing and related regulatory news from different accounting and regulatory bodies in India and overseas
Auditing news
Guidance Note on Audit of Banks (2022 Edition) – 10 February 2022
The Auditing and Assurance Standards Board of the Institute of Chartered Accountants of India (ICAI) has issued the revised 2022 edition of the ‘Guidance Note on Audit of Banks’, which includes impact of various circulars issued by the Reserve Bank of India (RBI) as well as important advisories, pronouncements of the ICAI which would be relevant for the bank audits for the financial year (FY) ending 31 March 2022.
For more information, click here.
Peer Review Mandate - Roll Out – 12 February 2022
The ICAI has issued a revised Peer Review Mandate, wherein the coverage of the peer review has been enhanced by covering more firms under the ambit of the same. The revised mandate would be rolled out in four stages, which are as follows:
Phase | Category of firms covered | Date of implementation |
I | Firms which have undertaken Statutory Audit of enterprises whose equity or debt securities are listed in India or abroad as defined under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. | 1 April 2022 |
II | Firms which have undertaken Statutory Audit of unlisted public companies having paid-up capital of not less than ₹ 500 crores or having annual turnover of not less than ₹ 1000 crores or having, in aggregate, outstanding loans, debentures and deposits of not less than ₹ 500 crores as on the 31 March of immediately preceding FY.
OR
Firms having 5 or more partners anytime during the immediately preceding FY. | 1 April 2023 |
III | The firms which have undertaken the Statutory Audit of entities which have raised funds from public or banks or financial institutions of over ₹ 50 crores during the period under review or of any body corporate including trusts which are covered under public interest entities
OR
Firms having 4 or more partners may be covered in the Phase 3 of the rollout. | 1 April 2024 |
IV | Firms conducting audits of branches of Public Sector banks
OR
Firms having 3 or more partners and rendering assurance services. | 1 April 2025 |
Further, the firms falling under Phase I would be required to submit a declaration form, which shall be shortly hosted on the ICAI’s website.
For more information, click here.
Regulatory news
FAQs on The Insolvency and Bankruptcy Code, 2016 (Revised January 2022 Edition) – 8 February 2022
The ICAI has issued the Revised edition of ‘Frequently Asked Questions (FAQs) on The Insolvency and Bankruptcy Code, 2016 (January 2022)’. The publication is supplemented with appropriate case laws to help in understanding the different provisions and amendments under the Code and also know the practical implications in day-to-day professional life.
For more information, click here.
LIBOR Transition - Valuation Guide – 10 February 2022
Cessation of the London Inter-Bank Offered Rate (LIBOR) has initiated a worldwide transition of financial institutions from old benchmarks to new Alternative Reference Rates (ARR). This transition will affect the existing exposures as well as any future contracts using LIBOR as a reference rate and will also require changes in systems, processes and tax and accounting treatment at entities that uses financial instruments.
Therefore, the ICAI in order to provide appropriate guidance to its members has come up with a guide namely ‘LIBOR Transition – Valuation Guide’, which provides a brief summary of LIBOR history and way forward post its cessation and also highlights key points to be considered by Registered Valuers and Stakeholders as a part of this transition.
For more information, click here.
Companies (Accounts) Amendment Rules, 2022 ‒ 11 February 2022
The Ministry of Corporate Affairs (MCA) has issued the Companies (Accounts) Amendment Rules, 2022, wherein a new sub-rule i.e., sub-rule (1B) has been inserted in Rule 12 ‘Filing of Financial Statements and Fees to be Paid Thereon’, which states that every company which is covered under the provisions of Section 135(1) shall furnish a report on Corporate Social Responsibility (CSR) in Form CSR-2 to the ROC for the preceding FY 2020-2021 and onwards as an addendum to Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be.
Further, it has been clarified that for the FY 2020-2021, Form CSR-2 shall be filed separately on or before 31 March 2022, after filing Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be.
These Rules shall come into force w.e.f 12 February 2022.
For more information, click here.
Commencement notification for section 1 to 29 of LLP (Amendment) Act 2021 ‒ 11 February 2022
The Central Government has notified that the provisions of Section 1 to 29 of the Limited Liability Partnership (LLP) (Amendment) Act, 2021 shall come into force w.e.f. 1 April 2022.
For more information, click here
Notification under section 67 of LLP Act 2008 ‒ 11 February 2022
The Central Government has notified that the provisions of sections 90 ‘Register of significant beneficial owners in a company’, 164 ‘Disqualifications for Appointment of Director’, 165 ‘Number of Directorships’, 167 ‘Vacation of Office of Director’, sub-section (5) of section 206 ‘Power to Call for Information, Inspect Books and Conduct Inquiries’, sub-section (3) of section 207 ‘Conduct of Inspection and Inquiry’, 252 ‘Appeal to Tribunal’ and section 439 ‘Offences to be Non-cognizable’ of the Companies Act,2013, shall apply to LLP as well, subject to some modifications.
For more information, click here.
LLP (Amendment) Rules 2022 ‒ 11 February 2022
The Central Government has issued the LLP (Amendment) Rules, 2022, wherein certain amendments have been made in the existing Rules and certain new rules have also been inserted, the listing of which is as follows:
- Rule 5 ‘Fees’ (existing Rule);
- Rule 18 and 19 which deals with the Name of LLP (existing Rule);
- Rule 19A ‘Allotment of new name to existing LLP under sub-section (3) of section 17’ (new Rule);
- Rule 37A ‘Adjudication of penalties’ (new Rule);
- Rule 37B ‘Appeal against order of adjudicating officer’ (new Rule);
- Rule 37C ‘Registration of appeal’ (new Rule);
- Rule 37D ‘Disposal of appeal by Regional Director’ (new Rule).
These Rules shall come into force w.e.f 1 April 2022.
For more information, click here.