On 9 May 2018, the Securities and Exchange Board of India (SEBI) amended its Listing Regulations and specified that the statutory auditor (principal auditor) of the listed entities would be required to undertake a limited review of the audit of all the entities/companies whose accounts are to be consolidated with the listed entity as per Accounting Standard (AS) 21, Consolidated Financial Statements. This said provisions are applicable from 1 April 2019. However, the term ‘limited review of the audit’ has been a subject of multiple interpretations as there was lack of clarity on the level of procedures to be performed by the principal auditor in the case of a group audit. Additionally, it was unclear on how this requirement was aligned to the existing guidance for auditors included in SA 600, using the work of another Auditor and the principles set out in the Guidance Note on Audit of Consolidated Financial Statements(Revised 2016) issued by the Institute of Chartered Accountants of India’s (ICAI).
Now, SEBI through its circular dated 29 March 2019 prescribed the procedure and formats for limited review report and audit report of the listed entity and its components. The revised procedure and formats would be required to be followed by the statutory auditors of such entities. These procedures are applicable from 1st April 2019.
To access the text of the SEBI circular, please click here.