Excellence is the hallmark of success in a competitive environment. Performance can be judged and enhanced to a level of excellence only by evaluation by a competent professional. The Council of the Institute, therefore, decided to introduce Peer Review for Practising Company Secretaries (PCS) to periodically evaluate the quality, sufficiency of systems, procedures and practices, so that excellence in their performance is maintained. It examines whether a Practice Unit (PU) has adequate policies and procedures in place to comply with the Technical Standards of ICSI and other legal requirements.
Peer Review is a process used for examining the work performed by one’s equals (peers) and to understand the systems, practices and procedures followed by the Practice Unit and to give suggestions, if any, for further improvement.
In simple terms, it’s a method of evaluation of a person’s work or performance by a group of people in the same occupation, profession, or industry. For continued quality improvement in an atmosphere of openness and mutual trust that contributes to enhancing transparency and comparability it is necessary that good practice is valued and mutual learning encouraged in a dynamic and motivating process, from which both the PU and Reviewer can benefit.
Practice Unit means members in practice, whether practicing individually in own name, or as a sole proprietorship, or as a partner of a firm/LLP of Company Secretaries.
In line with section 15 of the act, The Council of the Institute of Company Secretaries of India is constituted under the Company Secretaries Act, 1980 for discharging the functions assigned to the Institute under the Act.
a. To comply with the Technical Standards laid down by the Institute; and
b. To have in place proper systems (including documentation systems) for maintaining the quality of services they perform.
Applicability of the Guidelines on Peer Review
a. Whenever a peer review is mandated;
b. Whenever a peer review is requested; and
c. Whenever a peer review is conducted.
Composition of the Peer Review Board
The Board shall comprise of:
b. Vice-Chairman; and
c. 7 Members (out of this, 4 shall be members of council)
Peer Reviewer –
The Review shall focus on:
The Review would be in respect of the following services:
1. Annual Returns Certified/Signed under Companies Act, 2013
2. Certificates Issued under Regulation 40 (9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
3. Secretarial Audit Reports issued Section 204 of the Companies Act, 2013 / Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
4. Annual Secretarial Compliance Reports under SEBI (LODR) Regulations, 2015
5. Internal Audits under Section 138 of the Companies Act, 2013
6. Audit Reports issued under Clause 76 of SEBI (Depositories & Participant Regulations) 2018
7. Certificate issued under Regulation 56 of LODR Regulation 34(3) read with Schedule V, Para C, Clause (b) (i)
8. Compliance Certificates issued under Clause E, Schedule V of SEBI (LODR) Regulations, 2015
9. Internal Audit of Registrar and Share Transfer Agent (RTA) under SEBI Circular No. SEBI/HO/MIRSD/DOP1 /CIR/P/2018/73 dated 20th April, 2018 & Internal Audit of Credit Rating Agencies under SEBI Circular No. SEBI/MIRSD/CRA/Cir-01/2010
10. Issuance of Internal Audit Certificate for operations of the Depository Participants
11. Half yearly bank due diligence certificates issued
Records of how many years are subject to Peer Review by the Reviewer?
The Engagement records of immediately preceding financial Years shall be subject to peer review.
Advantages of the Peer Review to the Practice Unit (PU)
A. Enhances the Attestation quality, Audit Services and Credibility
B. Provides competitive advantage and a forum for Guidance and knowledge sharing.
Apart from this, a Peer Reviewed Unit is entitled to get additional 5 Secretarial Audits / Annual Secretarial Compliance Reports, per partner / PCS.
PEER REVIEW PROCESS
It encompasses a wide range of activities such as empanelment of peer reviewers, selection of the P.U, the Review Process, reporting, etc. A brief summary of the various steps involved is presented below:
Empanelment of peer reviewers
Selection of P.U.
The Board shall identify the P.U to be peer reviewed by a tested random selection method. If a P.U. opts for review on a voluntary basis, he is free do so. Once selected for, it is mandatory to offer themself for Peer Review.
Intimation to P.U. and Choice of Reviewer
The Board will notify the selected P.U. of the impending Peer Review. A questionnaire will be sent to him for completion and return to the Peer Reviewer, which will give an indication of the size of the P.U, professional assignments undertaken, staffing pattern and composition, etc. The P.U. is also required to furnish details of attestation services undertaken by him. The completed questionnaire will help the Peer Reviewer to plan his approach to Peer Review. The names of three Reviewers will be suggested to the P.U. and an option will be provided to the P.U. to select one of them. If the Peer Reviewer would like to have Reviewers from another State/Region and none of the reviewers as identified by the Board for the P.U. are from outside the place of business of the P.U. then the P.U. may make a special request to the Board to provide names of reviewers from outside the State/Region where the practice unit has its/his place of business. In such cases, the extra costs to be incurred by way of TA/DA shall be borne by the P.U.
Clause No. 13.1 of the Guidelines provides that the peer review of every practice unit should be mandatorily carried out at least once in a block of five years. However, if the Board so decides or if the P.U so requests, peer review can be conducted at shorter intervals.
METHODOLOGY TO BE FOLLOWED BY REVIEWER:
(a) Offsite review: Studying the information given by the PU in the Questionnaire (refer to annexure IV on icsi.edu)
(b) Onsite Review:
Cost of Peer Review:
The Practice Unit under review shall provide access to any record or document as may be asked for by the reviewer. But, Reviewer cannot take any document or record alongwith, not permitted to do so and P.U. can deny the same.
Reporting: Three stage process – Review Framework
* The reviewer shall not communicate any Report(s) unless the examination of such Report(s) & related records has been made by him or by a Qualified Assistant of his firm?
Composition of Reviewer’s Report-
The basic components of a report are scope, Reference to the quality control standards, Limitations if any, reference to the preliminary report if any, description of why modified report is required, instead of clean report. Also, reviewer can give qualifications in his/her report.
DISPUTE RESOLUTION :