The National Financial Reporting Authority (NFRA), supported by the Reserve Bank of India
(RBI) and the Securities and Exchange Board of India (SEBI), is advocating for a significant
update to SA 600 – Special Considerations for Group Audits.
This initiative aims to align India’s auditing practices with the revised global standards set
by the International Auditing and Assurance Standards Board (IAASB). The move is not
just a procedural update—it addresses critical gaps that came to light in major financial
cases such as Reliance Capital and IL&FS, where group-level auditing complexities played
a pivotal role.
Why is this important?
- Enhancing Accountability: Group audits often involve multiple components audited by different teams. Updated standards ensure better coordination and oversight by the principal auditor.
- Global Alignment: Indian markets are increasingly interconnected with global financial systems. Harmonizing standards builds investor trust and facilitates cross-border investments.
- Prevention of Financial Mismanagement: By addressing past loopholes, such updates aim to preempt financial irregularities and systemic risks.