Easier audit standards for smaller firms soon

ICAI prepares new less-intrusive norms for closely held units, seeks NFRA approval

- MANU KAUSHIK

THE AUDIT REGULATIONS for small and medium enterprises — especially the firms that have very little or no exposure to public investors, have less complex structures, and where the ownership is less dispersed — may be eased substantially.

The move is aimed at promoting ease of doing business and facilitating speedy growth of these units without being disrupted by redundant audit interventions. According to official sources, the Institute of Chartered Accountants of India (ICAI) has finalised a new set of auditing standards for these classes of companies, describing them as “less complex entities” under certain defined criteria. These standards will significantly reduce disclosure requirements and simplify the processes for auditors, they said, but added that the audit quality won’t nevertheless be compromised.

The ICAI has already sent the draft standards to the National Financial Reporting Authority (NFRA) for approval. Once cleared by the regulator, the CA body will likely proceed with notifying them, sources close to the development told FE.