ICAI recommends Joint Audits for large companies

The Institute of Chartered Accountants of India is in favour of ushering in a system of “joint audits”, but only for large companies.

This position of the ICAI — which is the regulator for auditors — has been conveyed to the government-appointed expert group headed by former Finance Secretary Ashok Chawla.

The expert group has been tasked, among other things, to look into the feasibility of introducing “joint audit” in cases where there are restrictive covenants and/or in other cases where there is a multinational audit firm as the auditor.

In joint audits, two or more auditors conduct audit on a legal entity (the auditee) to produce a single report, thereby sharing responsibility for the audit.

The top brass of the CA institute had a few days ago made a presentation to the expert group, sources said. In the next few days, the institute will decide the “threshold” for deciding the “large companies” for which joint audits should be introduced, they added. The threshold will be conveyed to the expert group. #casansaar (The Hindu business)