NFRA’s Draft Release, The ICAI Urges A Pause On Revisions To SA 600

The Institute of Chartered Accountants of India (ICAI) has requested a halt in revising Standard on Auditing (SA) 600, expressing surprise at the National Financial Reporting Authority’s (NFRA) release of an exposure draft during ongoing discussions within the ICAI Council.

The ICAI Council recognised the usefulness of the present SA 600 in a meeting on September 17, 2024, but stressed the necessity of a comprehensive revision to take into account changing professional needs. In spite of this, NFRA published its draft and asked for public comments by October 30.

ICAI raised concerns over the draft, particularly regarding the assessment of component auditors’ competence. It argued that Indian chartered accountants, regulated under the Companies Act, 2013, meet uniform standards, making additional assessment unnecessary. The Institute also noted that the international definition of component auditors may not align with India’s regulatory framework, potentially disadvantaging smaller CA firms.

Furthermore, ICAI emphasised that management should bear some of the responsibility for consolidated financial statements, as required by law, rather than just depending on the group auditor. It also highlighted the difficulties caused by several regulatory agencies, such as SEBI and RBI, which make auditing across industries more difficult.