ICAI: Revision in Peer Review Mandate

The Council at its 407thMeeting held from 7th– 9thJanuary 2022 decided to mandate the Peer Review process for coverage of more firms under Peer Review process. An Announcement dated 12.02.2022 in this regard was hosted on the website at https://www.icai.org/post/peer-review-mandate-roll-out

Certain aspects required revision to bring in more clarity e.g. the time limit for compliance of the mandate, qualifications of reviewer of listed entity auditors, etc. The same have been addressed by the Council at its 410th Meeting held on 24th– 25th March 2022. It was clarified that holding a valid Peer Review certificate by Practice Units (referred to as ‘firms’ in the Announcement dated 12.02.2022) should be a pre requisite for undertaking audit of all entities falling under phase I; II; III and IV of the mandate.

It may be re iterated that the first phase to be implemented from 1st April 2022 for Practice Units there is a pre-requisite of having Peer Review Certificate for undertaking audit of Statutory Audit of enterprises whose equity or debt securities are listed in India or abroad as defined under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Practice Units falling under this phase were required to submit a declaration form hosted at https://forms.office.com/r/AA5Zpgdsrr by March 31, 2022.

Further, phase II, to be implemented from 1st April 2023 for Practice Units there is a pre-requisite of having Peer Review Certificate for undertaking Statutory Audit of unlisted public companies having paid-up capital of not less than rupees five hundred crores or having annual turnover of not less than rupees one thousand crores or having, in aggregate, outstanding loans, debentures and deposits of not less than rupees five hundred crores as on the 31st March of immediately preceding financial year. For Practice Units rendering attestation services and having 5 or more partners there is a requirement of having Peer Review Certificate before undertaking any Statutory Audit.

Phase III to be implemented from 1st April 2024 for Practice Units there is a pre-requisite of having Peer Review Certificate for undertaking the Statutory Audit of entities which have raised funds from public or banks or financial institutions of over Fifty Crores rupees during the period under review or of any body corporate including trusts which are covered under public interest entities. For Practice Units rendering attestation services and having 4 or more partners there is a requirement of having Peer Review Certificate before undertaking any Statutory Audit.

Phase IV to be implemented from 1st April 2025 for Practice Units there is a pre-requisite of having Peer Review Certificate for undertaking audits of branches of Public Sector banks. For Practice Units rendering attestation services and having 3 or more partners there is a requirement of having Peer Review Certificate before undertaking any Statutory Audit.

In respect of Peer Reviewer of auditors/Practice Units auditing listed entities, a reviewer who has carried out audit of listed entity and also one who has undergone training and test for this purpose in addition to normal training and test, is also qualified to conduct peer review.

Guidelines for issuance of Peer Review Certificate to newly established firms (i.e. firms in existence for less than 12 months) will shortly be issued by the Peer Review Board.

An Announcement regarding Revised Peer Review Mandate will shortly be hosted on the website.

Chairman,
Peer Review Board

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