A delegation from IAASB comprising of Prof Arnold Schilder, Chairman, International Auditing and Assurance Standards Board (IAASB) and Mr Jim Sylph, Executive Director, Professional Standards, International Federation of Accountants (IFAC) visited India from November 21-22, 2011 to have a closer and more in depth interaction on problems relating to convergence, implementation of ISAs in India and to deliberate on issues that affect both ICAI & IAASB.
Acknowledging the efforts and initiatives being put in by the Institute of Chartered Accountants of India (ICAI) to enhance quality of audits in the country. the international delegates complimented ICAI’s achievement of the goal post convergence with the International Standards on Audit. The meeting was also addressed by CA. G Ramaswamy, President, ICAI, CA Jaydeep N Shah, Vice President, ICAI .
The delegation appreciated the fact that the focus of ICAI was not only on standard setting for audits to bring the Indian auditing profession at par with the global practices, but also on taking the Standards to the large number of practitioners spread across length and breadth of the country, through its awareness initiatives to encourage their proper understanding and implementation.
During this visit,the ICAI launched the first phase of e-learning on 10 Standards on Audit for its members in the august presence of Prof Schilder and Mr Sylph. The Institute is working for developing e-learning modules for the remaining 30 plus Standards.
The delegation met the important regulators and Government agencies such as the Reserve Bank of India, the Securities and Exchange Board of India, the Comptroller and Auditor General of India and the Ministry of Corporate Affairs to discuss various aspects of concern to both the regulators and the standard setters in the perspective of the recent financial crisis.
The issues discussed with the country’s banking regulator , Reserve Bank of India included ensuring financial stability, regulators’ perspective on what further could be done by the standard setters to enhance quality of bank audits, impact of global financial crisis on exports by India, issue of banks providing direct confirmations of bank balances of clients to their auditors, etc.
The meeting of IAASB delegates with the capital markets regulator SEBI focused on how auditors could contribute to creating safe markets and enhanced participation of investors. The other matters like importance of corporate governance and ethics in business, enhanced disclosures in IFRS based financial statements and their auditability, audit of related party transactions, oversight mechanism for the Indian auditing profession, ways in which the auditors could be given greater voice, etc were also discussed
The delegation also met Comptroller & Auditor General of India and were apprised about the close coordination between C&AG and ICAI, specifically with regards to various training programmes being organized for the staff of Central/state government departments on accounting and other related issues.
The delegation later met Dr M.Veerappa Moily, Hon’ble Union Minister of Corporate Affairs and Secretary, Ministry of Corporate Affairs .The delegation was apprised of developments in the area of strengthening the corporate governance in companies, training programmes for Directors, Corporate social responsibility in India and other issues of relevance. The delegation gave its views on the Impact on independence of auditors vis a vis management, expectations of stakeholders from regulators in post financial crisis era , the areas that need to be strengthened in respect of auditing standards and the like.
The IAASB delegation emphasized on the need and importance for the regulators to have a frequent, open and a constructive dialogue with the standard setters, to provide them perspective on expectations of the regulators and other stakeholders from the auditing profession in the changing economic scenario, their findings on actual performance of auditors. This would go a long way in helping the standard setting bodes like IAASB and ICAI in identifying areas where the Standards need to be further strengthened as also identifying areas where new Standards need to be developed to ensure quality in audits.
The delegation also appreciated the initiatives of ICAI in improving the quality of audit and audit reports of banks. It also complimented the Institute on the support extended by it to set up the XBRL regime for financial statements of companies in India, including the assurance to be provided by auditors on XBRL converted financial statements.