SEBI Expands CRA Internal Audit Eligibility

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  • Last Updated on 16 May, 2025

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SEBI CRA internal audit team composition

Circular No. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2025/68; Dated: 14.05.2025

1. Background

SEBI’s Master Circular for Credit Rating Agencies (CRAs) already requires every CRA to undergo an annual internal audit that reviews compliance, rating processes, data integrity, and IT security. Until now, the audit team had to include one Chartered Accountant (ACA/FCA) and one CISA/DISA-qualified IT auditor.

2. What the 14 May 2025 Circular Changes

SEBI Circular SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2025/68 widens the talent pool so that CRAs “have a larger selection of qualified professionals for conducting internal audits.” Two key additions were made –

  1. Cost Accountants (ACMA/FCMA) can now substitute for Chartered Accountants.
  2. DISSA-certified professionals (Diploma in Information System Security Audit, issued by ICMAI) are recognised alongside CISA and DISA holders.

3. Effective Date & Transition

  • Effective immediately (14 May 2025). No phase-in grace period has been granted.
  • CRAs that have already engaged auditors for FY 2024-25 must ensure their teams satisfy the new mix before commencing the audit fieldwork.

4. Immediate Compliance Checklist for CRAs

  1. Review existing engagement letters for FY 2024-25 internal audit.
  2. Amend the team roster to include at least one Cost Accountant/CA and one CISA/DISA/DISSA professional.
  3. Update internal-audit charter and Board-approved policies to reflect the revised Para 33.1.3.
  4. Inform the Audit Committee of the change and obtain ratification.
  5. File revised auditor details with SEBI via the CRA’s monthly compliance report (if changes in key professionals).

5. Expected Benefits for the Market

  • Higher audit quality – Mix of finance and cost-control experts plus robust IT-security scrutiny.
  • Lower concentration risk – More professionals eligible, reducing over-reliance on a narrow group of CAs with dual-IT credentials.
  • Faster audit turnaround – Easier team formation, especially for mid-sized CRAs operating pan-India.
Click Here To Read The Full Circular

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied