June 28, 2022

ICAI News: ICAI working on audit quality norms to boost Indian firms’ global standing

ICAI working on audit quality norms to boost Indian firms’ global standing | ICAI News

Quality parameters can be applied suo moto by ICAI’s 80,000 member firms; best practices to
include the creation of supervising partner position,
audit rotation, among others

The institute of chartered accountants of India (ICAI) is developing an audit quality maturity
model to bring global standards for all its member firms and provide them with a score on
achieving the required benchmarks.

The quality parameters can be applied suo moto by the 80,000 member firms of the ICAI.

“The idea is to improve the inherent capabilities of auditors…While a lot of the quality
parameters are already there, we are putting things in black and white to help make our firms
become globally competitive,” Atul Gupta, president ICAI said.

Some of these best practices would include creating a position for a supervising partner, audit
rotation among others. “Most big firms have these checks in place but in Indian context firms
need to evolve so India can also have big audit firms in the future,” Gupta added.

The institute has recently opened the Centre for Audit Quality at ICAI’s Centre of Excellence in
Jaipur to ‘develop a systematic audit quality framework.’

“The Centre for Audit Quality will aim at the continuous investment in the contemporary
education and training for prospective accountants and auditors, developing guidance and
training programmes to assist audit teams and offices to undertake effective root cause analysis,”
Gupta said.

In a press statement, ICAI said India was on the cusp of a huge data revolution and it had
become essential to advocate the position of the auditors to the various stakeholders to fill in the
expectation gaps.

“There is no set definition of a quality audit, and many factors influence audit quality. As a
the result, judging audit quality can be challenging and subjective,” the statement said.

The auditing model is being designed on the basis of guidelines provided by the International
Auditing and Assurance Standards Board. The quality indicators to be issued by the ICAI will be
over and above the requirement to have a peer review and the financial reporting review by
third party.

Its Centre of Audit Quality will also provide training to auditors in terms of developing
professional skill sets, using technology, and improving digital competency in areas such as the
safety of data.

“This will improve the performance of auditors… We are institutionalizing the standards for
audit firms in India,” ICAI president said.

ICAI may also give certifications to audit firms for their score on its quality parameters and
evaluation of their competence, Gupta said.



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