ICAI releases revised edition of Technical Guide on Audit of NBFC

The Institute of Chartered Accountants of India(ICAI) has released revised edition of Technical Guide on Audit of NBFC.

In 2010, the AASB of ICAI issued the “Technical Guide on Audit of Non-Banking Financial Companies” to provide detailed guidance to the members regarding audit of NBFCs. The Technical Guide was last revised in 2016. Happy to note that the AASB has now brought out this Revised 2023 Edition of the “Technical Guide on Audit of Non-Banking Financial Companies” which is quite comprehensive in its coverage, dealing with various aspects of audit of NBFCs.

In light of these developments, the Auditing and Assurance Standards Board decided to revise the Technical Guide.

The Technical Guide deals with various aspects of audit of NBFCs such as introduction of NBFCs, points for consideration in audit of NBFCs, financial reporting framework, auditing framework, areas of audit concern, operations of NBFCs, governance etc. For the benefit of the members, the Appendices to the Technical Guide contain illustrative templates of audit report / certificate, illustrative audit checklist, illustrative list of master directions, circulars, RBI notifications, illustrative disclosure norms for NBFCs, illustrative list of returns to be submitted by NBFCs etc.

Non-banking financial companies (NBFCs) are playing an important role in the Indian financial sector. Due to their importance in the Indian financial sector, NBFCs are recognized as being complementary to the banking sector. However, there are several instances of misuse of public funds, irregularities in functioning, bankruptcies etc. in NBFCs. Therefore, the role of statutory audit of NBFCs is very important to bring discipline in functioning of NBFCs.

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