New Delhi, Feb. 10: The Institute of Chartered Accountants of India (ICAI), which will start operationalisation of the peer review board from April 1, has drawn up a jumbo panel of 150-member as potential reviewers.
“We have already drawn up a 150-member panel of reviewers. This will be trimmed to about 50 reviewers,” R. Bupathy, the newly-appointed ICAI president, told The Telegraph.
Apart from being a member of ICAI, a reviewer needs to possess at least 15 years of audit experience and must also be active in the practice of accounting and auditing. A panel of at least three members will be sent to the unit to be reviewed, allowing it to choose any one reviewer from the panel.
“The dictum that the peer reviewers will go by is the idea of improvement in the professional standards in the chartered accountancy profession. The idea is not to pin down the erring members of ICAI, but to help them improve wherever required,” said Bupathy.
Dwelling on the way the board is set to function, Bupathy said, “To avoid subjectivity, a structured questionnaire will be formulated to be given to the CA firm whose review will be done by members form the panel of the reviewers.”
The draft of the peer review manual is currently being finalised. A manual on quality control standards for compliance with the statement on peer review has also been prepared and is under consideration of the board. The peer review board has so far held two meetings.
In March last year, a peer review board was constituted by ICAI. It had representations from the department of company affairs (DCA), Comptroller and Auditor General of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi) and Federation of Indian Chambers of Commerce and Industry (Ficci).
The main objective of peer review is to ensure that in carrying out their professional attestation services assignments, the members of ICAI comply with the technical standards laid down by the regulatory body for chartered accountants. It will also ensure proper systems for maintaining quality of attestation services.
Interestingly, the Naresh Chandra committee report on auditing and corporate governance has suggested a composition of peer review board which is different from the one envisaged by ICAI. Apart from enhancing the importance of DCA -- the administrative ministry of ICAI, it has also suggested that the chairman of peer review board should not belong to the ICAI council.
ICAI maintains that if the Naresh Chandra committee recommendations are implemented, it will ‘harmonise’ it with its own framework. ICAI plans seek to introduce peer review in three stages with different types of practice being included in each stage.