A consultation paper to examine the existing provisions of law and make suitable amendments therein to enhance audit independence and accountability has been placed and need suggestions/comments.
- Whether to reduce the number of audits per one audit firm/ auditor?
- Whether to reduce or set the number of partners under one audit firm?
- How can those Big-4’s burden be reduced? Which other audit firms are in a position to compete with them and reduce the workload of Big4?
- Whether the auditors in listed companies to be appointed from a separate auditors ‘ panel to be repaired by NFRA?
- Whether non-audit services can be included in the list u/s 144?
- Whether the Joint Audit for bigger companies should be made compulsory?
- What should be the threshold for the bigger companies?
Economic Concentration of audit [Big 4] – Positive & Negative effects on the economy
Most of the large global corporations use the Big Four accounting companies to audit their financial statements.This audit industry concentration of listed companies is characterized by an oligopoly of “Big Four” audit firms and in large-company audits would result in inadequate levels of competition.
Finding a new auditor would be more complicated because
- Less competition in many geographic markets where some of these companies do not have a significant presence.
- The lack of sufficient auditing experience by the remaining companies, in particular industries.
- Many other businesses are not independent because of the provision of non-audit services
The Companies Act, 2013 provides mandatory audit firm rotation and non-audit services In order to tackle this economic concentration of audit. The main purpose of this provision is to increase the number of audit firms capable of carrying out the most complex audits.
Non-audit services not to be taken by auditors
It has been noted that some of the audit firms are observing self-regulation and are making decisions not to participate in non-attested work such as consultancy and transaction advisory services from listed companies that they are auditing. Such a move that comes in the midst of auditors who are facing heat in high-profile corporate scandals seems a welcome change. Deloitte announced recently that it will not underatake any non- audit services in public domain.i.e. listed entities with Banks & Insurance Companies in particular.
To know more Click here
Latest Updates
- Creating a Strategy for Tax Savings in FY25 with ELSS Mutual FundsCreating a Strategy for Tax Savings in FY25 with ELSS Mutual Funds Are you still adhering to the old tax regime? Considering tax savings under Section 80C? With the commencement of a new financial year, it’s an ideal moment to strategize tax-saving endeavors. Many financial advisors advocate for early tax planning […]
- 7 Essential Documents for Filing ITR AY 2024-257 Essential Documents for Filing ITR AY 2024-25 Filing income tax returns (ITR) is obligatory for every taxpayer annually. For the Assessment Year (A.Y.) 2024-25, the CBDT has updated all ITR forms 1 to 6, effective from April 1, 2024. These revisions aim to enhance ease of filing and assist taxpayers. The deadline […]
- Find the Suitable Income Tax Return Form for Filing Your Returns HereFind the Suitable Income Tax Return Form for Filing Your Returns Here Income Tax Department Enables All Return Filing Forms and Releases ITR-6 Excel Utility for AY 2024-25 The Income Tax Department has activated all return filing forms, including ITR-1, ITR-2, ITR-4, and ITR-6, on the e-filing portal for the purpose of filing […]
- Income tax compliance calendar for May 2024Income tax compliance calendar for May 2024 May 7 The deadline for paying April 2024’s TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) liabilities May 15 1. Date by which TDS certificates must be issued for taxes deducted in March 2024 under sections 194-IA, 194-IB, 194M, and 194S. 2. The […]
- Save TDS on interest income: Form 15G & Form 15HSave TDS on interest income: Form 15G & Form 15H Form 15G and Form 15H are self-declaration forms used by individual taxpayers to request tax deductors, such as banks and financial institutions, not to deduct TDS if their estimated tax liability for the relevant financial year is Nil. Under Section 194A […]