News Karnataka
Monday, February 26 2024
Business

ICAI to issue 8 new forensic audit standards

ICAI to issue 8 new forensic audit standards MAIN 13
Photo Credit :

ICAI to issue 8 new forensic audit standards MAINNew Delhi: The Digital Accounting and Assurance Board (DAAB) of the Institute of Chartered Accountants of India (ICAI) has proposed eight new Forensic Accounting and Investigation Standards (FAIS), which will be placed for final approval on August 13.

The ICAI had earlier issued 13 FAIS.

The new accounting standards prescribe strict measures to be followed by the forensic auditors while conducting forensic audit.

The new standards will render the existing forensic audits untenable, especially where the lenders have used ambiguous and inconclusive reports to classify borrower loan accounts as fraud.

The FAIS prescribes that the forensic auditor shall issue a precise and unambiguous report.

The report is also required to be backed by reliable evidence and relevant documents collected by the auditor, in line with the requirements of FAIS to support its conclusions.

The FAIS further prescribes that the report shall not express an opinion or pass any judgement on guilt or innocence.

The FAIS categorically mandates that the principles of natural justice needs to be met by conducting a discussion of the observations with the subject party and their views need to be suitably incorporated in the report.

It is to be noted that currently, there are no standards or guidelines prescribed by any regulator or authority to monitor or regulate the functions of forensic audit.

In the absence of such regulations, any and every self-acclaimed forensic audit expert/firm was appointed by the lenders to conduct forensic audit as per their own rules and procedures and present reports based on their own judgements.

In most such cases, the reports used to be inconclusive, ambiguous and devoid of reliable evidence. There was no review or appeal mechanism against any erroneous or wrong forensic audit findings, and the same were not even shared with the concerned party.

These new forensic audit standards are likely to render several existing forensic audit reports untenable — especially where lenders have used ambiguous and inconclusive reports to classify borrower loan accounts as ‘fraud’, or where the principles of natural justice have not been met during the process of forensic audit.

Share this:
MANY DROPS MAKE AN OCEAN
Support NewsKarnataka's quality independent journalism with a small contribution.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Find the best odds at 10Cric and IPL Betting 2023! Signup today and get up to a 100% deposit bonus.

To get the latest news on WhatsApp