The National Financial Reporting Authority’s (NFRA) Board has given its nod to the revised version of 40 auditing standards and will now send it to the Central Government for its notification.
The overhaul of the 40 auditing standards is intended to bring them in true alignment with the international standards on auditing (ISA) and the revamped ones include two key standards where the CA Institute had expressed reservations. These two key standards are SA 600 (relying on the work of other auditor) and SA 299 (Joint Audit of Financial Statements).
“Both SA 600 and SA 299 will be revised in line with NFRA position. The three members of ICAI represented in NFRA Board opposed it but their opposition has been overruled by the NFRA board,” sources close to the development said.
NFRA Board’s two-day meeting concluded on Tuesday in the capital. The major standards approved by the NFRA Board include SQM1, SQM2, SA 600 (revised), SA 299 (revised), SA 800 (revised), SA 805 (revised) and SA 810 (revised).
Out of the 40 standards, 38 standards were accepted as recommended by ICAI with corresponding minor recommendations, sources in CA Institute said. However, ICAI had expressed “strong concerns” over SA600 (revised) and SA299 (revised).
On joint of audits, NFRA has stuck to its position that joint auditors must be jointly and severally responsible and rejected ICAI’s stance on the concept of division of responsibility among joint auditors. NFRA has also now decided to mandate cross-review of the work done by joint auditors.
NFRA Board also decided to rename the Standards on Auditing (SAs) to be notified under the Section as Ind SAs in line with Ind AS (Indian Accounting Standards). The revamped auditing standards are expected to come into effect from April 1, 2026.