The Institute of Chartered Accountants of India (ICAI) on Thursday approved the revised Code of Ethics (CoE) for chartered accountants (CAs) that will give them more flexibility to advertise, among other things.
The revised CoE, which will come into force from April 1 next year, will also enable CAs to render additional services such as forensic accounting, research analyst, social impact assessment and evaluation, artificial intelligence, etc.
Relaxed Advertising and Expanded Service Offerings
As per ICAI, the changes in the advertisement guidelines are aimed at enhancing accessibility and professional visibility in line with contemporary practices. “The changes include more flexibility of contents, advertisement through contemporary form in write-up, enabling website for network firms and changes intended to enhance the visibility of firms and facilitate the dissemination of information through digital platforms,” the CA body said, in a note.
The existing advertisement guidelines of ICAI permits CAs or firms to provide only those particulars of their firm in the form of a write-up that must strictly adhere to the prescribed font requirements, including a maximum font size of 14 points. “Under the revised guidelines, there are still some riders. Broadly, we don’t want any kind of animosity between two professionals,” said Charanjot Singh Nanda, president of ICAI.
The revised CoE also includes new independence provisions like non-acceptance of audit work of a public interest entity (PIE) where non-audit services have been provided to the same entity. In addition, the revamped CoE recommends CAs and firms to accept audit fees only through digital modes or banking channels.
New Standards for Independence and Reliance on Other Auditors
Further, the CA body said that it has approved global networking guidelines and the revised SA 600 standards. ICAI has said that the revised standard lays down a clear framework for reliance on the work of the other auditor and establishes accountability parameters for both the principal auditor and the other auditor. “The standard enables the principal auditor to review component records, visit the component, perform direct audit procedures, and issue a modified opinion if required,” ICAI note said.
Last year, National Financial Reporting Authority (NFRA) and ICAI were at loggerheads on this particular standard where the regulatory body recommended revised SA 600 to be aligned with the international standard ISA 600, with minor contextual changes specific to India. ICAI, on the other hand, said that the alignment with ISA 600 would push most of India’s audit firms out of business, and lead to concentration of the audit market with a handful of top firms.
Currently, the NFRA has recommended the revised standards to the ministry of corporate affairs for its approval and notification.