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The Solicitor General of India, in an opinion provided to the National Financial Reporting Authority (NFRA), said the Institute of Chartered Accountant of India (ICAI) does not have the power to issue any binding standards or guidelines for audit, according to people in the know.
It can also not take action against any audit firm but only Chartered Accountants, sources said.
The authority to issue any standards regarding audit and accounting vests only with the government and in this case the Ministry of Corporate Affairs (MCA). “Neither NFRA nor ICAI have the power to issue binding standards of audit.
According to the opinion, the ICAI can only make recommendations, which are subject to government approval. It further stated that ICAI cannot take direct action against audit firms, limiting its jurisdiction to Chartered Accountants (CAs) alone. This interpretation comes amidst ongoing discussions surrounding proposed revisions to auditing standards, including Standards on Auditing (SAs) 600 and 299, which pertain to group and joint audits, respectively.
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