SEBI Proposes to Mandate a Separate Report on Digital Assurance of Financial Statement

Draft Consultation Paper Dated 03.02.2025

Earlier, Auditing and Assurance Standards Board (AASB) and Digital Accounting and Assurance Board (DAAB) of The Institute of Chartered Accountants of India (ICAI / institute) have jointly brought out a ‘Technical Guide on Digital Assurance’ to provide guidance to its members to adopt enhanced use of technology in audit by implementing the use of digitally available audit evidence and information.

The aforesaid Technical Guide primarily focuses on sources of external audit evidence and information available and how the same can be utilized by the members in their audit procedures. It is noted that the Technical Guide in itself does not require any separate reporting by auditors on these aspects. Further, no responsibility is cast on the management of listed entity to provide this information obtained from external data repositories to auditors or provide access to such information to auditors.

Now, SEBI has proposed to mandate a separate report on digital assurance of financial statement. The report will increase transparency, improve disclosure standards and enable better enforcement, and thereby provide greater investor protection and trust in the ecosystem.

Reporting on digital assurance shall be applicable on Top 100 listed entities by market capitalization from Financial Year 2024-25 onwards i.e. for the period ending on or after March 31, 2025.

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