India Audit Regulator Seeks Feedback On Annual Transparency Report Draft

India’s audit regulator is seeking industry feedback on its draft format of the Annual Transparency Report (ATR) that auditors and audit firms will be required to publish going forward.

The National Financial Reporting Authority (NFRA), which has released a draft format for preparation and publication of ATR by auditors and audit firms, said the comments can be submitted at nfra-comments@nfra.gov.in by 16 February.

The move on ATR is aimed at enhancing the transparency about management and governance of audit firms, as well as their internal policy framework to ensure high quality audits and preventing conflict of interest by maintaining independence, it added.

These ATR requirements are on the lines of the contemporary international best practices implemented by certain prominent independent audit regulators in other jurisdictions, the NFRA said.

The audit regulator plans to prescribe publication of ATR containing certain critical information about the auditor’s operational activities, management, governance and ownership structures, as well as policies and procedures necessary to deliver high-quality audits.

The information contained in the ATR will be useful to the investors, audit committees, independent directors and public at large, it said.

The NFRA said the ATR requirements are proposed to be implemented in a gradual manner for the regulated public interest entities, starting with statutory auditors of top 1,000 listed companies (by market capitalization) with effect from the financial year ending on 31 March 2023.

The ATR has to be published within three months from the end of each financial year, it noted.