ICAI’s Quality Review Board Issues Guidance on Observed Non-Compliance

Review of the quality of audit services performed by audit firms is an important mechanism to improve audit quality. In this regard, the role performed by the Quality Review Board (QRB) over the years is significant. The quality reviews conducted by QRB bring out instances of various non-compliance regarding:

a. Auditing requirements e.g. Standards on Quality Control, Standards on Auditing, audit reports, CARO, and

b. Accounting requirements e.g. Accounting Standards, Indian Accounting Standards, Schedule VI of Companies Act, 1956/ Schedule III of Companies Act, 2013

The Quality Review Board of ICAI has issued guidance on non-compliance (Volume 2) in which instances of various non-compliances regarding Standards on Quality Control, Standards on Auditing, Audit Reports, Internal financial controls and CARO, 2020 are covered. The guidance note is classified into 2 parts, Part 1 contains the observations related to Engagement and Quality Control Standards. Part 2 contains the observations related to CARO and internal financial controls.

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