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March 17, 2021

ICAI invites EoI for audit tool

by CA Jessica Nagaonkar in ICAI

ICAI invites EoI for audit tool

The Institute of Chartered Accountants of India (ICAI) is a statutory body established by an Act of Parliament, viz. The Chartered Accountants Act, 1949 for regulating the profession of Chartered Accountancy in the country. The Institute, functions under the administrative control of the Ministry of Corporate Affairs, Government of India.

It recommends the accounting standards to be followed by companies in India to National Financial Reporting Authority and sets the accounting standards to be followed by other types of organisations. ICAI is solely responsible for setting the Standards on Auditing (SAs) to be followed in the audit of financial statements in India. It also issues other technical standards like Standards on Internal Audit (SIA), Corporate Affairs Standards (CAS) etc. to be followed by practicing Chartered Accountants. ICAI, now to usher in process automation and ease of doing audit for audit firms, proposes to develop an ‘audit tool’ for process automation and ease of carrying out audit for its firms.

It has now sought an Expression of Interest (EOI) from software vendors for development and maintenance of a web-based software for audit management. An Expression of Interest (EOI) is one of the initial transaction documents shared by the buyer with the seller. The EOI indicates a serious interest from the buyer that their company would be interested to pay a certain valuation and acquire the seller’s company through a formal offer.

This ‘audit tool’ will not be mandatory and it will be up to the firm concerned to opt for it. ICAI is only facilitating the process automation. The tool would cover Statutory Audit, Tax Audit, Internal Audit, Bank Audit and GST Audit, and should be compliant with the laws such as the Companies Act 2013, Income Tax Law 1961 and also with the Pronouncements of ICAI, the CA Institute has said.

The CA Institute has around 3.15 lakh members and around 90,000 firms specialising in traditional areas of audit, direct, indirect and international taxes, including GST, and in emergent areas such as insolvency, financial services, risk management and corporate re-structuring.

Nearly 90,000 audit firms in the country could potentially benefit from any move to automate audit activities such as client engagement, analytical procedures, allocation of tasks and documentation of audit, sources said.

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