The weekly messenger | Edition 20.17
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
Important Clarification on Amendment to Para 17 of Revised GN on Audit of CFS – 25 May 2017
The Institute of Chartered Accountants of India (ICAI) has amended the third bulletin of para 17 of the revised Guidance Note (GN) on Audit of Consolidated Financial Statements (CFS) which earlier used to state that while considering the observations (for instance modification and /or emphasis of matter in accordance with Standard on Auditing (SA) 705/706) of the component auditor in his report on the standalone financial statements, the concept of materiality would not be considered. Thus, the component auditor's observations, if any, on the component’s financial statements, irrespective of whether the auditors of the component are also the auditors of the CFS or not, are required to be included in the parent auditor's report on the CFS, regardless of materiality.
Now, this has been amended as follows, “While considering the observations of the component auditor in his report on the standalone financial statements, the parent auditor should comply with the requirements of SA 600, “Using the Work of Another Auditor”. The purpose of amending this bulletin is to clarify that the intent of the GN was also to ensure compliance of SA 600 in such matter.
For more information, click here
Regulatory News
Startup Companies – Definition changes – 23 May 2017
In order to promote entrepreneurship in the country, the Government of India has amended the definition of a Startup. Following are the significant changes that have been made to the definition of Startups –
- Age of Startup increased: Now an entity shall be considered as a Startup up to seven years from the date of its incorporation/ registration (from earlier 5 years). However, in the case of Startups in the Biotechnology sector, the period shall be up to ten years from the date of incorporation/ registration.
- No Letter of Recommendation required: No letter of recommendation from an incubator/industry association shall be required for either recognition or tax benefits.
- Potential of Job and Wealth Creation: The scope of definition has been broadened in order to include scalability of business model with potential of employment generation or wealth creation.
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Draft Companies (Registered Valuers and Valuation) Rules, 2017 – 26 May 2017
The Ministry of Corporate Affairs has placed draft Companies (Registered Valuers and Valuation) Rules, 2017 on its website on 26 May 2017 for the purpose of inviting the suggestions/comments on the said rules along with brief justifications.
The suggestions/comments are to be received by 27 June 2017.
For draft rules, click here
For notice inviting comments, click here
FAQs on Withdrawal of Legal Tender Character of the Old Bank Notes in the denominations of ₹ 500 and ₹ 1000 and The SBNs (Cessation of Liabilities) Act 2017 & SBNs (Deposit of Confiscated Notes) Rules, 2017 – Updated as on 26 May 2017
The Reserve Bank of India has issued frequently asked questions (FAQs) on withdrawal of legal tender character of the Old Bank Notes in the denominations of ₹ 500 and ₹ 1000 and The Specified Bank Notes (SBNs) (Cessation of Liabilities) Act 2017 & SBNs (Deposit of Confiscated Notes) Rules, 2017 which are updated as on 26 May 2017.
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Effective Date for the Commencement of certain provisions of Finance Act, 2017 – 26 May 2017
The Central Government has appointed 26 May 2017 as the date on which the provisions of the PART XIV “Amendments To Certain Acts To Provide For Merger Of Tribunals And Other Authorities And Conditions Of Service Of Chairpersons, Members, Etc.” of Chapter VI “Miscellaneous” of the Finance Act 2017 shall become applicable.
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