Tushar J. Shah & Parag R. Raval 
Hon. Secretaries                         

PEER REVIEW – SOME INFORMATION

The Council of the Institute decided in 1998 that there must be a system of review of work of we professionals. While doing so the Council felt that this review system would increase the confidence of the society at large in quality of work of Chartered Accountants. "Peer Review" is examination and review of system and procedures to determine whether they have been put in place by the practising member of the Institute for ensuring quality of services and to ensure the compliance of technical standards laid down by the Institute. Peer Review is directed towards maintenance as well as enhancement of quality of attenstation services and to guide members to improve their performance and adhere to various statutory and other regulatory requirements.  

The scope of Peer Review is limited to auditing & verification of financial transactions and does not at all include management consultancy, representation before authorities, preparation of tax returns, compilation of accounts, giving expert opinion etc. The review shall focus on compliance with various statement and standards issued by the Institute, compliance of statutes and regulations, quality of reporting office systems and procedures and training of staff including appropriate infrastructure.

The 'Reviewer' for the purpose of Peer Review shall be the Chartered Accountant in active practice with atleast 15 years experience of audit.

Peer Review shall be introduced in three stages and the practice unit (C.A. firm of which review is to be done) shall be selected on random sample basis. In first stage w.e.f. 1.4.2003 Central Statutory Auditors of Banks, PSUs, Central Co.Operative Societies, Insurance Companies, auditors of companies having paid up capital of over five crores and turnover over Rs. Fifty Crores, auditors of Asset Management Companies and Mutual Fund Schemes shall be subject to review. In second stage w.e.f. 1.4.2004 branch auditors of Banks, auditors of NBFCs, auditors of companies having paid up capital of less than five crores and such turnover as may be decided, auditors of concerns which have raised funds of over Rs. One Crore from public/financial institutions during the year and concerns who have shown readiness to raise funds of above amount or more as evidenced by their filling of prospectus shall be subject to review. In third stage w.e.f. 1-4-2005 it shall be extended to all other practice units.

The review in first stage shall be mandatorily carried out atleast once in block of three years. The reviewer shall have access to all the records and documents of last three years and persons to whom he deem fit. However in no case records etc. for period prior to 1-4-2002 can be requestioned by reviewer.

The cost of review i.e. honorarium and TA/DA shall be borne by practice unit.  

The Institute shall provide training facilities for reviewers from time to time.

The method of peer review shall be that first of all the Peer Review Board of the Institute will send an intimation to practice unit regarding impending peer review with a questionaire and names of three suggested reviewers. The practice unit shall choose one of the three suggested names within 15 days and complete the questionaire within one month. There after on sight review shall be carried out and records of practice unit shall be seen by reviewer. On completion of on sight review, the reviewer shall communicate a preliminary report to practice unit, the practice unit within 21 days of the preliminary report make representations to reviewer in writing. If the reviewer is satisfied with reply he shall submit his report to Peer Review Board (of ICAI). In case of non-satisfaction of reviewer an interim report shall be submitted by him to Peer Review Board. In that case Peer Review Board (PRB) may instruct reviewer to again carry out review after six months to verify that systems and procedures have been streamlined. Based on the report of subsequent review if the PRB is of the opinion that Technical Standards are not followed it will issue necessary instructions to reviewer to carry out further peer review specifying the matters as regards to which the review is to be carried out (which shall not commence earlier than 6 months after the date on which instructions are issued) The PRB will also make recommendation to practice unit for maintenance f/adherence to Technical Standards where improvements are required. In case reviewer is not satisfied even at subsequent review he shall submit his report to PRB stating reasons for dissatisfaction. The final Report of reviewer shall be examined by the Board and necessary recommendations shall be issued to practice unit wherever necessary and reviewer shall be asked in such case to perform follow up action. Then PRB shall issue a Peer Review certificate to practice unit.

In Peer Review immunity is provided from any liability under code of Ethics to practice units which make available records and documents to reviewer.

Entire review process shall be done under strict confidentiality and non-compliance of secrecy provision shall amount to professional misconduct.

As on today the Peer Review Board has been constituted as under :

Members of the Council

1.         Mr. Sunil Bhargava - Chairman

2.         Mr. T. N. Manoharan - Vice Chairman

3.         Mr. N. V. Iyer

4.         Mr. Pankaj Jain

5.         Mr. Vinod Jain

6.         Mr. Manoj Fadnis

Representatives of Outside Bodies

7.       Shri Aditya Prakash   - Director Department of Company Affairs

8.       Shri R. S. Mathuram  - Principal Director Comptroller & Audit General of India

9.       Shri Aditya V. Lodha, FCA, Kolkata - Federation of Indian Chamber of Commerce & Industry

10.               -          Reserve Bank of India

11.              -            Security Exchange Board of India

[ Top ]

ARCHIVES

• For the month of June 2002
• For the month of April  2002