The Institute of Chartered Accountants of India (ICAI) has expanded the mandatory applicability of its audit quality maturity model to firms auditing subsidiaries, associates, joint ventures or holding structures of listed entities or banks or insurance companies that are subject to peer reviews. In a peer review, an independent auditor usually verifies the audit processes, procedures and documentations followed by the auditor of a firm and issues a report. Such reviews serve to improve the credibility of auditors involved and their audit quality. Earlier, those auditing subsidiaries, associates, joint ventures or holding structures of the stipulated entities were not mandated to follow the audit quality maturity model (AQMM), a matrix that enables audit firms to self-evaluate their audit maturity and identify areas of improvement.
The institute has now expanded the scope of the AQMM’s mandatory applicability through a public announcement, Multidisciplinary partnerships Separately, the ICAI has suggested that the watchdog regulating the partners having a majority control of a multidisciplinary partnership (MDP) be entrusted with the job of regulating that entity, people aware of the details said. MDPs, where skilled workers from accounting and consultancy professions can work under a single firm structure, are a key part of the government’s plan to facilitate the creation of large home-grown firms akin to the Big Four. Last year, the corporate affairs ministry had floated an office memorandum, seeking stakeholder comments on allowing MDPs in India. The presence of different regulators for licensing in different professional services in the extant system was one of the factors discouraging the setting up of MDPs. Fewer than 1% of accounting firms in India have more than 10 partners each. The absence of large homegrown firms has allowed the Big Four to dominate the Indian audit ecosystem. Already, Shaktikanta Das, principal secretary-2 to the prime minister, has deliberated with senior officials from the finance and corporate affairs ministries on steps to facilitate the creation of large homegrown firms.
Source from: https://cfo.economictimes.indiatimes.com/news/tax-legal-accounting/icai-expands-mandatory-applicability-of-audit-quality-evaluation-matrix/130250148
