Legal experts frame the secretarial policies. There is a long-held need to involve industry experts in policymaking. Apart from the legal aspect, the administration creates operational challenges. ICSI had decided to induct members and non-members into the secretarial and auditing standards board. The amendments will bring change in corporate standards and the industrial environment. Industry experts have exposure to the industrial environment. They make the environment a healthy environment. The ICSI want to initiate operations of the academic board. The members of the Academic board will take care of Academic requirements. The legal policies should reflect the professional challenges and sectoral administration challenges. The placement of industry experts in the committee makes the policies workable. The blog intrigue the readers with the functioning of auditing and the Academic board.
Secretarial and auditing standards board:
The auditing standards are applicable after 1st April 2021. CSAS one standard is about audit standards on the audit engagement. Number two deals with auditing standards on the audit process and documentation. CSAS three deals with auditing standards on farming of opinion. Four is about auditing standards on secretarial audits. Guidance notes and standards are explained in this act by ICSI.
Guidance note on Audit engagement:
The law comes into effect from 2021. The guidance notes explain the appointment, agreement, and responsibilities. The practising company secretaries undertake the auditing job as per the SEBI Act companies Act, or any other law operating in India. The law is not suitable for voluntary audits. If the appointment and engagement of the auditor are by the direction of the regulatory body, court or tribunal, the applicability of auditing standards is up to a certain extent. The various audits and auditee under the companies act is by the company, a secretarial audit under SEBI is by the listed entities, an internal audit by the companies act is by the company, audit of depository participants by the SEBI is conducted by the sole proprietorship, LLP company and partnership firm, internal audit of stock brokers by the SEBI act is operated by the sole proprietorship, partnership, HUF, LLP and company, internal audit of investment advisors by SEBI is handled by the sole proprietorship, LLP and partnership company, internal audit of investment advisors by SEBI is conducted by sole proprietorship, LLP, and partnership, internal audit of portfolio managers by SEBI is by the body corporate, internal audit of credit rating agencies by SEBI is conducted by the public financial institution, foreign bank operating in India, commercial bank, credit rating agency, and internal audit of research analysis by SEBI is suitable for the partnership firm, LLP, and sole proprietorship. The auditor should produce the engagement letter for the period of audit. The auditee should educate the terms and revised terms. If there is a change in the terms of auditing in the middle of the auditing process, the auditor should obtain a letter of revised engagement from the auditee. Management refers to the board of directors or auditee. The senior management team comprises the chief financial officer, company secretary, and members not included in the board of directors. The audit engagement letter consists of the following details:
• The objective of the audit
• The details of the agreement and responsibilities by the auditee and auditor.
• The details of the previous auditor. And other written representations.
• The details of the period of the audit and the reports concerning the audit process are in the audit engagement.
• The audit engagement has the details of audit fees and reimbursement for the other auditing expenses incurred out of pocket.
• Challenges with the audit.
Auditing standard on audit process and documentation:
The auditee does risk management considering the role and structure of the organisation and compliance process. The auditor checks the internal system, constitutional documents, rules, regulations, applicable laws, standards, prudence, compliances, transparency, and probity. The assessment of risk consists of the following checklist; policy initiatives of the government, legislative committee report, changes in the laws, geographical location, finance and accounts calculations, past audit findings, court orders, audit committee recommendations, details of the notices received, media reports, expenditure and receipt trends, value and volume of the related party transactions, and contingent liability details.
The audit evidence and documentation consist of the audit findings, planning process, work process, and proof that the audit is for the given period, and the audit should not have a connection with the previous findings. The evidence of the audit comes from different sources. The techniques used for the audit evidence are as follows: sampling, physical inspection, document scrutiny, observation, confirmation, questionnaires, and analytical procedures.
Auditing standard on farming of opinion:
The auditor follows three principles when dealing with the written report with opinions. The following principles imply the materiality of the auditor report: the principle of completeness, the principle of objectivity, the principles of contradiction and the principle of timeliness. The principles thrust the auditor to check the relevant evidence, apply a professional brain, take the right time, check facts and collect the responses from the concerned parties.
Auditing standard on secretarial audit:
As a part of the secretarial audit, the auditor checks the board processes, board compositions, compliances, events, corporate actions, and detection of fraud. The company secretary produces the secretarial audit report after checking the events and actions that contribute to the affairs of the auditee.
Academic Board:
President Manish Gupta said that the academic board would monitor the academic activities, syllabus, training requirements, mode of education, examination system and evaluation procedures. The academic board would have fourteen members. The purpose of forming the board is to have a streamlined process of growth. The Academic board would analyse the dynamic aspects of the company secretaryship profession. The changes in the profession because of regulatory, economic and technological changes are a matter of discussion in this board. Every five years, the syllabus of the professional courses changes. The board review the syllabus beyond boundaries. The board representatives are regulators, academicians, legal professionals, university professors, industry experts, IT professionals, and human resource professionals.
Final words:
ICSI formed these boards to check the changes then and there. The board will have meetings every six months or as needed. The board connects the ICSI’s vision to the policy frameworks and syllabus changes.
