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To enhance communication between auditors and audit committees of companies and improve audit quality, the National Financial Reporting Authority (NFRA) on Friday released the first part of the Auditor-Audit Committee Interaction Series.
This is the first time that NFRA has released a set of questions for the audit committee to ask the auditors to ensure credible and meaningful interactions.
In the course of its enforcement, review, and monitoring activities, NFRA has emphasised the importance of the auditor’s communication with those charged with governance (TCWG).
“A need has been felt through these activities to reinforce the ways and means of communication between the statutory auditors and the audit committees, in particular, drawing upon the requirements in the Companies Act, 2013, the two relevant Standards on Auditing (SA 260 (R) and SA 265), other related SAs, and the Standard on Quality Control,” NFRA stated.
The first part of the interaction series draws auditors' attention to potential questions that audit committees or boards of directors may ask regarding accounting estimates and judgements. It also includes aspects related to the audit of expected credit losses for financial assets and other items required by Ind AS 109, Financial Instruments.
“In accordance with its obligations to suggest measures for improving overall audit quality and to promote awareness of the significance of accounting and auditing standards and auditors’ responsibilities, NFRA is commencing this series of Auditor-Audit Committee Interactions,” NFRA said in a press statement.
https://nfra.gov.in/nfra-auditor-audit-committee-interaction-series-1-accounting-estimates-ecl/
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