MCA Reviews Global Audit Norms To Increase Group Auditor Responsibility

The Ministry of Corporate Affairs (MCA) is reviewing the adoption of global auditing standards that would increase the responsibility of group auditors for financial statements involving subsidiaries, according to official sources.

The proposal focuses on the revised Standard on Auditing (SA) 600, recommended by the National Financial Reporting Authority (NFRA) along with 33 other auditing standards in November 2024. NFRA had suggested implementing the revised norms from April 1, 2026, subject to government approval. The move gained attention after the Rajesh Exports matter, where statutory auditors and the company’s audit committee faced scrutiny over alleged issues related to the verification of revenues reported by overseas subsidiaries. NFRA has started an investigation into the matter.

The Institute of Chartered Accountants of India (ICAI) has raised concerns with the MCA regarding the proposed changes. The ministry is expected to decide after completing consultations.