NEW DELHI: Regulator SEBI on Friday tweaked the formats for limited review and audit report of listed entities in order to align them with the revised auditing standards.
Providing new formats for audit report and limited review report in the circular, SEBI said that in view of revision in auditing standards (SA 700) by the Institute of Chartered Accountants of India (ICAI), "audit report formats need to be aligned with SA 700 (revised)".
This will also be applicable to entities whose accounts are to be consolidated with the listed entity. "This circular shall be applicable with respect to the financial results for the quarter ending September 30, 2019 and after," SEBI said.
On the revised formats, Anjali Aggarwal, partner and head of capital market services at Corporate Professionals said, "Presently, governance is on the drivers' seat. Listed entities have already witnessed many a changes in their compliance regime. Regulators including SEBI, are proactive in reviewing the existing legal framework. Issuance of revised formats of limited review reports and audit reports is a step in the same direction".
She added that the revised formats will bring uniformity and consistency in the reporting models being followed by the companies, thus enabling the stakeholders to take well informed investment decisions.
In March this year, SEBI came out with procedure and formats to be followed for limited review and audit report of listed entities after a new sub-regulation was inserted in the LODR (Listing Obligation and Disclosures Requirements) norms, which require the statutory auditor of a listed entity to undertake a limited review of the audit of all the entities or companies whose accounts are to be consolidated with the listed entity as per the Accounting Standard 21.
The sub-regulation was incorporated after taking into consideration recommendations made by the Uday Kotak committee on corporate governance.