CAs to soon offer free auditing services

The call for Corporate Social Responsibility (CSR) by the corporate affairs ministry has turned into a Professional Social Responsibility (PSR) for lakhs of Chartered Accountants (CAs) who may soon provide free auditing and accounting services in the country.

Institute of Chartered Accountants of India (ICAI), the apex body responsible for accounting and auditing standards in the country, has decided to offer 'free' auditing services to at least 100 auditable entities belonging to the deprived classes, micro, small and medium enterprise or those located in the tribal, remote and rural areas from this fiscal.

Speaking to FE, ICAI president Subodh Kumar Agrawal said the CA body is willing to scale up the free services to up to 1,000 entities, if need be. “ICAI will now form a panel of volunteering CAs and discuss the modalities for putting this into effect with the corporate affairs ministry,” Agrawal said.

It will be a first such initiative by CAs since ICAI come into existence in 1949.

But the concept is not new for the profession around the world. In the UK and Ireland, the CA firms are providing their advisory, auditing and accounting services free-of-charge or on reduced rates for charities. Such services also qualify as community services, especially if provided to local bodies. The CAs of Ireland have formed a Chartered Accountants Voluntary Advice service (CAVA) which provides free business advisory services nationwide.

In order to increase its active participation in nation building, the ICAI has also entered into a memorandum of understanding (MoU) with the department of posts. Under the MoU, ICAI will help India Post in switching over from cash-based accounting to accrual based accounting. “We are organising a series of training programmes on accrual basis of accounting in the Postal Accounts Offices across all 22 circles in the country. In this regard, programmes have been organised at Jaipur, Bangalore, Lucknow & Chennai,” Agrawal said.

According to ICAI, it has also urged for mandatory independent information system audits for all cooperative societies, NGOs and educational trusts apart from internal audits. “The independent audit through Chartered Accountants would ensure transparency and reduce the discrepancies. Further for audit of Cooperative Societies, ICAI has made representations to various state authorities for empanelment of cooperative auditors,” Agrawal said.

Talking about other recent initiatives, ICAI president said the Securities and Exchange Board of India (Sebi) had sought support from ICAI to review the audit qualification of the listed enterprises. “The Sebi has set up a new Qualified Audit Report Review Committee (QARC) which among other members will comprise of the representatives of the ICAI and the Stock Exchanges. While its role will be to guide Sebi in processing the qualified annual audit reports, ICAI will assess the materiality of the qualification contained in auditor’s report, based on which QARC may even direct the entity to restate its books of accounts,” Agrawal said. (Financial Express)