National Financial Reporting Authority (NFRA) has issued Consultation Paper on Statutory Audit and Auditing Standards for Micro, Small and Medium Companies (MSMCs) seeking comments from its stakeholders on 29 September 2021.
Background
In view of the issues related to compliance with the regulatory framework specifically by smaller size companies, NFRA seeks stakeholder responses which will be useful in evaluating the requirement of audit and minimum thresholds for MSMCs.
For the purpose of this Consultation Paper Micro, Small and Medium Companies (MSMCs) refer to companies with Net worth below Rs. 250 crores.
Questions related to Issues about the Auditing Areas of MSMCs
NFRA invites comments on 4 specific questions which are as follows:
- Do you think that Micro, Small and Medium Companies (MSMCs) depending upon some criteria and threshold should be exempted from the mandatory statutory audit under Companies Act, 2013?
If not, why not and if yes, what would be the criteria and thresholds for exemption? - Do you think there is a requirement for a separate set of auditing standards for MSMCs as it exists for accounting standards?
If no, why not and if yes, what should be the basis for the same? - The cost of conducting an audit as per the prescribed standards is an important input for the responses to Questions 1 and 2. Do you agree with the approach for estimating standard cost of audit computed by NFRA? (Page No. 37-39 of Consultation paper)
If not, which areas/ assumptions need changes? - Do you think the current exemption thresholds for CARO, ICFR and statutory audit applicability need to be standardised and made uniform?
If no, why not and if yes, what would be the criteria and thresholds?
Last date for receiving the comments
Last date for receiving the comments is 10 November 2021.
Communication Address
The comments can be provided as per the following contact details
- Email : comments-tac.paper@nfra.gov.in
- Postal : The Secretary,
National Financial Reporting Authority
7th-8th Floor, Hindustan Times House, 18-20,
Kasturba Gandhi Marg, New Delhi 110001.
For the consultation paper click here:
https://nfra.gov.in/sites/default/files/NFRAConsultationPaperMSMCs.pdf