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Brief: CSAS-1 Auditing Standard

The Institute of Company Secretaries of India, recognizing the need to provide support to its members in developing auditing acumen, techniques and tools and for inculcation of best auditing practices among its members had issued ICSI Auditing Standards

Effective Date: The Standard is effective and recommendatory for Secretarial Audit accepted by the Auditor on or after 1st July, 2019 and mandatory for Secretarial Audit accepted by the Auditor on or after 1st April, 2020

In view of the developments arising due to the spread of Covid-19 pandemic, the effective date of mandatory applicability of ICSI Auditing Standards CSAS-1 to CSAS-4 has been extended for Audit Engagements accepted by an Auditor on or after 1st April,  2021. 

Members are advised to follow the Institute’s communications/guidelines, which may be issued from time to time, for the date of mandatory applicability of ICSI Auditing Standards CSAS-1 to CSAS-4.

Let’s discuss today about CSAS-1

CSAS-1 AUDITING STANDARDS ON AUDIT ENGAGEMENT

Deals with Auditor’s roles and responsibilities with respect to Audit Engagement and the process of entering into agreement with the appointing authority for the purpose of audit.

AUDIT ENGAGEMENT PROCESS

Appointment- The appointment of auditor shall be in accordance with applicable laws, acts, rules and regulations, standards and guidelines and if no manner is given, then by manner made by the Appointing Authority.

Certificate- the Auditor shall submit an eligibility certificate before accepting an audit, which includes

1.      The number of audits is within the ceiling limits by ICSI.

1.     No substantial conflict of interest.

1.     No restriction to render professional services.

1.     He is not debarred to take audits in any other law,    

Audit Engagement Letter- the Auditor shall obtain an Audit Engagement letter along with the copy of resolution and shall provide his acceptance to the appointing authority. The Audit Engagement letter shall include the objective and scope of the Audit, responsibilities of the auditor and auditee*.

*Auditee: a person or organization that is audited.

The Audit Engagement letter shall give a reference to the provisions of the relevant law along with the statement that the management acknowledges and understands its responsibilities for preparation and maintenance of record.

Communication to the Previous Auditor- the Auditor shall communicate with the previous auditor, in any, before accepting the audit.

Limit of Audit Engagement- the Auditor shall accept Audit Engagement within the limits prescribed under any law being in force or by ICSI.

Conflict of interest- The Auditor shall not have any substantial conflict of interest with the auditee and any conflict of interest, other than substantial conflict of interest may be disclosed to the auditee.
The conflict of interest explained below shall not be constructed as substantial conflict of interest:-

1. Auditor holding not more than 2% of paid up share capital or shares of value Rs. 50,000,whichever is lower or 2%voting power, as the case may be.
2. Auditor indebted for an amount not more than Rs. 5,00,000.
3. Auditor was in employment more than 2 years ago.

Confidentiality- the Auditor shall not disclose the information obtained during Audit without proper and specific authority or unless there is a legal obligation to disclose.

Changes in terms of Engagement- the Auditor shall not agree to a change in terms of employment without any proper justification.

If terms of engagement are changed, the Auditor and Appointing Authority shall agree to the new engagement by way of supplementary deed or any other suitable form in writing.

#TeamOrporateLegal
 

 

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