‘ICAI to soon finish financial statement review of 101 firms’
NEW DELHI : The Institute of Chartered Accountants of India (ICAI), which selected the financial statements of 101 companies for review in the 12 months to February 2023, will complete the process in a few months, said the chief of the accounting rule maker and audit self-regulator. The exercise will serve as a test of the robustness of statutory auditing at companies.
ICAI, on its own, or on a reference from a sectoral regulator, reviews financial statements of companies, including the auditor’s report, by its Financial Review Reporting Board (FRRB), president Aniket S. Talati said, explaining how it keeps a watch over audit compliance.
Where material violations by the auditor are noticed, the matter will be referred to ICAI’s disciplinary committee for initiating investigation and action against the auditor, Talati said in an email interview. If auditors have blown the whistle about the affairs of a company, it is for the relevant regulator to take action against the management as ICAI’s jurisdiction is only over the auditors and its members, not over the company, Talati said.
“The process of ongoing reviews will take a few months to complete," he said. In the last 20 years, ICAI has done over 1,300 such reviews of financial statements.
“This review is done in three stages, initially by an independent reviewer and then by a group of experts before the findings are placed before FRRB, which also has members and representatives from multiple regulators, for deciding on action against members (auditors) in cases where gaps are found in the audit," said the president of ICAI. In cases where non-compliances observed are not material and do not affect the true and fair view of the financial statements, the matter is brought
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