The weekly messenger | Edition 28.22

Auditing News

External Confirmations through Third Party Vendors Companies – 7 September 2022

Considering the various difficulties being faced by the auditors in obtaining the external confirmations from banks, wherein some banks are using services of third-party vendors to provide confirmations on their behalf to auditors, the Institute of Chartered Accountants of India (ICAI) has advised its members to seek direct confirmation from the concerned banks instead of third-party vendors who provides such confirmations on their behalf.

For more information, click here.

Exposure Draft of Standard on Sustainability Assurance Engagements 3000 – 12 September 2022

The ICAI has issued the Exposure Draft of Standard on Sustainability Assurance Engagements (SSAE) 3000 ‘Assurance Engagements on Sustainability Information’, which deals with assurance engagements on an entity’s sustainability information.

As per the Exposure Draft, the proposed date of applicability of the aforesaid standard would be as follows:

• On voluntary basis for assurance reports covering periods ending on 31 March 2023;

• On mandatory basis for assurance reports covering periods ending on or after 31 March 2024.

For more information, click here.

Tax Audit Clinic – 12 September 2022

The Direct Taxes Committee of the ICAI has constituted ‘Tax Audit Clinic’ for addressing the issues being faced by the members while conducting the Tax Audit under section 44AB of the Income tax Act, 1961, wherein the members may raise their specific queries at taxauditclinic@icai.in.

For more information, click here.

Mandatory Evaluation of The Audit Quality Maturity of The Firms using Revised Audit Quality Maturity Model (AQMM Rev v1.0) – 13 September 2022

In July 2021, the ICAI had released the ‘Audit Quality Maturity Model -Version 1.0 (AQMM v1.0)’, which was a capacity-building measure initiated by it. The objective of the same was to make sole proprietors and Audit firms able to self-evaluate their current level of Audit Maturity, identify areas where competencies are good or lacking and then develop a road map for upgrading to a higher level of maturity. Initially, the AQMM v1.0 was recommendatory in nature.

Now, the ICAI has mandated the evaluation of Audit Quality Maturity of Firms using revised Audit Quality Maturity Model for the firms auditing the following types of entities w.e.f. 1 April 2023:

• A listed entity; or

• Bank other than co-operative bank (except multi-state co-operative banks); or

• Insurance Company

For more information, click here.

Regulatory News

MCA amends the definition of Small Company – 15 September 2022

The Ministry of Corporate Affairs (MCA) has issued the Companies (Specification of Definition Details) Amendment Rules, 2022, thereby amending the definition of Small Company, by increasing the limits of the paid-up share capital and turnover to Rs. 4 crores and Rs. 40 crores respectively.

These Rules shall come into force w.e.f. 15 September 2022.

For more information, click here.

Guidance Note on use of digital signature certificate for announcements submitted by listed companies – 7 September 2022

In view of the advantages of using Digital Signature Certifications for authentication of documents / filings, the Bombay Stock Exchange (BSE), in consultation with the Securities and Exchange Board of India (SEBI) had decided to make it mandatory to file announcements under various SEBI Regulations using digital signature certification to the Stock Exchange vide its Circular dated 1 August 2022 subject to certain exceptions.

Now, in-continuation of the aforesaid circular, the BSE has further issued a guidance note to provide further clarity on use of digital signature certificate for announcements submitted by listed companies.

For more information, click here.