Saying Indian auditing practices are largely compliant with international practices, the Institute of Chartered Accountants of India (Icai) has recommended that India adapt to international auditing standards rather than adopt them in totality.
The institute also said that India needs to bring clarity to its existing auditing standards so that they can be easily understood by international auditors, banks and other relevant professionals.
With Indian companies engaged in many more overseas mergers and acquisitions; listing themselves on international exchanges; and raising funds outside the country, it is important, say some analysts, that Indian auditing practices are clearly reflected in audit reports of such companies.
James M. Sylph, executive director of professional standards at the International Federation of Accountants (Ifac), a global accountancy organization, is currently in India and pushing for domestic auditing standards to comply with international standards. More than 100 countries are using or are adopting international standards on auditing issued by the International Auditing and Assurance Standards Board set up by Ifac, into their national standards and the federation hopes that Indian standards also fully converge with the standards stipulated by Ifac by 2008, said Sylph.
“To effect that, we are in the process of introducing a tool kit which will help bring clarity in defining concepts and terms used in Indian auditing standards,” said Sunil Talati, president of Icai.
There are 35 auditing standards, 12 guidance notes in India and 39 international standards. According to Harinderjit Singh, member, central council, ICAI, there is little deviation from international norms in India. “Those are mostly to satisfy country-specific requirements and practices.”