India sets out to close a critical accounting standard gap to align itself with global peers
NFRA), in collaboration with the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi), is urging the Institute of Chartered Accountants of India to update a crucial accounting standard to align with revamped international norms, addressing a gap that has existed for over two decades, ToI reported on August 26.
On Monday, the NFRA board will deliberate on updating SA 600 to match the International Standard on Auditing 600 (ISA 600), which has undergone revisions in 2009 and 2023. This move follows the NFRA's observation of discrepancies in various cases, including those involving Reliance Capital, IL&FS, DHFL, and Café Coffee Day.
The NFRA, responsible for overseeing auditors and audit firms of large and listed companies, initiated discussions in May to update these standards, aiming to close the regulatory gap. Sources have indicated that SA 600 has been particularly contentious. While some chartered accountants argue that smaller firms might be adversely affected, regulatory sources insist that protecting small investors' interests is paramount.
«The Reliance Capital case is an eye opener. The revamp has to be done in public interest since it affects millions of investors who depend on the audited accounts to invest their hard-earned money,” ToI's report (by Sidhartha) said citing a source familiar with the discussions.
The revised standards will be adopted after public debate and are planned to be implemented in phases, beginning with listed companies. According to an analysis by
