The weekly messenger | Edition 16.20

Accounting News

ICAI issues COVID-19 FAQs on Ind AS – 7 May 2020

In order to provide application guidance in certain areas of accounting amidst the COVID-19 crisis, the Secretarial team of Accounting Standards Board of the ICAI has issued ‘COVID-19: Frequently Asked Questions (FAQs) on Ind AS’, in context of contraction in economic activity, disruptions in financial markets and a series of actions by government, monetary and prudential authorities. Some of the key topics on which the aforesaid FAQs have been issued are as follows:

• Inventories
• Property, Plant and Equipment (PPE)
• Impairment of Assets
• Financial Instruments
• Leases
• Revenue from Contracts with Customers
• Employee Benefits
• Presentation of Financial Statements.

These FAQs would be applicable for annual financial statements, which are prepared in Ind AS framework for the year ending 31 March 2020.
 
For more information, click here. 

Auditing News

Addendum to the GN on Audit of Banks, 2020 Edition – 5 May 2020

The ICAI has issued an ‘Addendum to the Guidance Note (GN) on Audit of Banks, 2020 Edition’, wherein it has inserted the various relief measures provided by the Reserve Bank of India due to COVID-19 vide its Circulars on ‘COVID-19 Regulatory Package’ and ‘COVID 19 Regulatory Package - Asset Classification and Provisioning’ issued on 27 March 2020 and 17 April 2020 respectively.
 
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Advisory for Statutory Bank Branch Auditors w.r.t. Specific Considerations while conducting Distance Audit / Remote Audit / Online Audit of Bank Branch under current COVID-19 situation - 6 May 2020

The ICAI has also issued an advisory for Statutory Bank Branch Auditors under current COVID-19 situation, wherein the ICAI has provided an illustrative list of considerations, which are to be kept in mind by the auditors while conducting Distance Audit / Remote Audit / Online Audit of Bank Branch under the current situation.
 
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Revised FAQs on UDIN for Bank Audit – 6 May 2020

The UDIN Monitoring Group of the ICAI has released certain revised FAQs on ‘UDIN for Bank Audits’, which inter-alia includes:

• Whether separate UDINs are required to be generated for LFAR, Tax Audit, Statutory Audit Report etc.;
• In case the Certificate (s) / Report (s) issued under bank audit are signed on different dates, whether separate UDIN will be required;
• Whether UDIN is mandatory for Bank Audit Report and Tax Audit Report that is/are filed online using Digital Signature;
• Whether UDIN is applicable to both Statutory Central Auditors (SCAs) and Statutory Branch Auditors (SBAs);
• Whether separate UDIN would be required by Joint Auditors.

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ICAI issues Publication on Going Concern – Key Considerations for Auditors amid COVID-19 – 10 May 2020

The ICAI has issued a publication on ‘Going Concern – Key Considerations for Auditors amid COVID-19’ in the form of FAQs, which highlights the key areas of focus in the current environment in India, when undertaking procedures relating to, and concluding on, the appropriateness of management’s use of the going concern basis of accounting in accordance with the Standards on Auditing (SAs).
 
The Publication focuses on the implications of the COVID-19 for the auditor’s work related to going concern, which includes:

• Matters an auditor should consider for going concern assessment due to COVID-19 and inherent uncertainty;
• Management and the auditor’s respective responsibilities in relation to going concern;
• Period of going concern assessment;
• Additional audit procedures required when events or conditions are identified which may cast significant doubt on the entity’s ability to continue as a going concern;
• Implications for the auditor’s report.

For more information, click here. 

Regulatory News

Clarification on holding of AGM through video conferencing or other audio visual means – 5 May 2020

The Ministry of Corporate Affairs (MCA), vide its Circular dated 21 April 2020, had allowed the companies whose financial year ended on 31 December 2019, to hold their Annual General Meeting (AGM) by 30 September 2020.
 
Now, in view of the continuing restrictions on the movement of persons at several places in the country, the MCA has decided to allow the companies to hold their AGM by Video Conferencing or other audio visual means during the calendar year 2020, subject to certain conditions.
 
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Relaxations relating to procedural matters – Issues and Listing – 6 May 2020

In view of COVID-19 pandemic and the lockdown, the Securities and Exchange Board of India (SEBI) has decided to provide certain onetime relaxations from the strict enforcement of certain regulations of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, pertaining to Right Issue opening upto 31 July 2020 and all offer documents filed until 31 July 2020.
 
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IRDAI provides additional grace period for Life Insurance Policies – 9 May 2020

The Insurance Regulatory and Development Authority of India (IRDAI), has provided further relief to the life insurance policyholders, by providing them with extended grace period, wherein such policy holders have been allowed to pay their premiums which fell due in the month of March 2020 till 31 May 2020.

 
For more information, click here.