Norms to boost audit quality
February 22, 2023
'The objective is to improve the audit quality and it will start with those firms that are auditing public interest entities. It will be mandatory from April onwards'
Chartered accountant firms auditing any listed entity or a bank or insurance company will have to compulsorily assess their audit quality through a set of questions under the Asset Quality Maturity Model (AQMM) developed by the Institute of Chartered Accountants of India from April 1.
“The objective is to improve the audit quality and it will start with those firms that are auditing public interest entities. It will be mandatory from April onwards,” Aniket Sunil Talati, the newly elected president of the ICAI, said on Tuesday.
The scores obtained using the AQMM will be subsequently reviewed by a peer/ AQMM reviewer. The level of the firm will be posted on the website of the ICAI along with the peer review certificate.
Based on their scores, firms will be classified from levels 1 to 4 with level 4 indicating that the firm has adopted the standards and procedures significantly. Talati said the AQMM will help to identify the areas that need improvement.
“Last Wednesday the cabinet approved the renewal of the mutual recognition agreement that ICAI has with the Institute of Chartered Accountants of England and Wales. This is extremely beneficial for members who are trying to go to the UK for professional opportunities and also for those who are handling UK accounting work sitting in India,” he said.
On February 13, the Institute of Singapore CharteredAccountants (ISCA) suo moto acknowledged the quality of CAs produced by the ICAI andnow any chartered accountant from India who is in Singapore for more than six months can directly apply for associate membership of ISCA without having to appear in any examination,” Talati added.