The weekly messenger | Edition 12.16

Accounting News

Withdrawal of Application Guide on Schedule II to the Companies Act, 2013 – 7 October 2016

The Corporate Laws & Corporate Governance Committee (CL&CGC) of the Institute of Chartered Accountants of India (ICAI) had issued an Application Guide on the Provisions of Schedule II to the Companies Act, 2013 in February, 2015. Later, the Research Committee of ICAI issued the Guidance Note (GN) on Accounting for Depreciation in Companies in the context of Schedule II to the Companies Act, 2013 in February, 2016.
The GNs are more authoritative than the Application Guides issued. Hence, the said application guidance note is no longer effective and stands withdrawn from the date the said GN became effective i.e. for accounting periods beginning on or after 1 April 2016.
For more information, click here

Withdrawal of two GNs on Accounting – 7 October 2016

The Council of ICAI has withdrawn the following GNs on Accounting as they are no longer relevant:

• GN(A) 9 (Issued 1994) – GN on Availability of Revaluation Reserve for Issue of Bonus Shares
• GN(A) 20 (Issued 2005) – GN on Accounting for Fringe Benefits Tax

For more information, click here

Auditing News

ISA 250 (Revised), Consideration of Laws and Regulations in an Audit of Financial Statements - 5 October 2016

The International Auditing and Assurance Standards Board (IAASB) in response to the new requirements to the Code of ethics for Professional Accountants for the purpose of addressing non-compliance with laws and regulations (NOCLAR) has made limited amendments to International Standards on Auditing( ISA) 250 (Revised) and other international standards. The basic purpose of making these amendments is to address the actual or perceived inconsistencies of the scope of laws and regulations and approach to identifying and dealing with NOCLAR.
This standard will become effective for audits of financial statements for period beginning on or after 15 December, 2017.
For more information click here    

Top Considerations for 2016 audit cycle - 5 October 2016

The Center for Audit Quality (CAQ) which is affiliated to the American Institute of Certified Public Accountants (AICPA) has issued alerts for auditors in general and for auditors of brokers and dealers identifying some of the more judgmental or complex audit areas for the 2016 audit cycle which are as follows:

• Improving transparency through disclosure of the engagement partner and certain other participants in audits.
• Improper alteration of audit documentation
• Effective communication with audit committees
• Assessing and responding to risks of material misstatement
• Internal control over financial reporting
• Segment identification and disclosure
• Going concern

For more information click here

Regulatory News

National Advisory Committee on Accounting Standards – 3 October 2016

The Central Government (CG) has re-constituted an Advisory Committee to be called as National Advisory Committee on Accounting Standards consisting of 13 members in order to provide advice to it on the formulation and laying down of accounting policies and accounting standards for adoption by the companies under the Companies Act, 2013.

For more information, click here

MCA has launched SPICe e-form – 3 October 2016

The Ministry of Corporate Affairs (MCA) has launched Simplified Proforma for Incorporating Company Electronically (SPICe) e-form. Its objective is to provide speedy incorporation related services within stipulated time frames which are in line with international best practices. Existing INC-29 and INC-7 will be phased out and SPICe will be the sole form available for incorporation of a company in India.
For more information, click here

Constitution of Expert Group to look into issues related to audit Firms – 30 September 2016

MCA has constituted an Expert Group in order to address the rotation issues raised by the Indian CA firms and restrictive conditions being imposed by foreign investors with regard to appointment of auditors by companies.
The issues that the expert group will examine and give recommendations on include the following:

• Impact on Indian Audit firms from restrictive shareholder covenants
• Impact on Indian Audit firms through the manner in which audit rotation is being implemented by companies
• Introduction of joint audit in cases where there are restrictive covenants and/or in other specified cases where there is a multi-national audit firm as the auditor.
• Legal and regulatory steps to be taken, if joint audit is to be implemented.
• Practices in other large emerging economies in relation to domestic firms and joint audit.
• Measures to be taken to promote creation of Indian Audit Firms at International level.

 The Expert Group has to submit its report within two months of this Order.
 
For more information, click here

Public Comments on Drafts Rules/Regulations under Insolvency and Bankruptcy Code, 2016

MCA has issued various draft rules/regulations under insolvency and Bankruptcy Code, 2016 which are as follows:

• Draft Insolvency and Bankruptcy (Model Bylaws of Insolvency professional Agencies), Regulations 2016
• Draft Insolvency and Bankruptcy (Registration of Insolvency Professional Agencies) Regulations 2016
• Draft Insolvency and Bankruptcy (Registration of Insolvency Professionals) Regulations, 2016

For more Information, click here

Subscribe to our newsletters