Policy for Empanelment of CA Firms office and Selection of Auditors of PSUs

Empanelment of CA firms

Chartered Accountant firms in India with at least one full time FCA (Partner/Sole Proprietor) can apply for empanelment with this office for allotment of audit of Public Sector Undertakings during January-February as notified every year.

The criteria for empanelment and selection of statutory auditors have been arrived at after due consultation with the Institute of Chartered Accountants of India.

Selection of CA firms for appointment as statutory auditors of PSUs whose audit fees are up to Rs 1.50 lakh

The selection is made by correlating the point score earned by each firm of Chartered Accountants towards empanelment with the size of the audit fee. The point score is based upon the experience of the firm, number of partners and their association with the firm, number of Chartered Accountant employees, as detailed below:

Experience of the firm 0.5 point for every year-Maximum 15.
Full Time FCA Partners 5 points each for first 5 partners and 2.5 points each for 6th partner onwards.
Full Time ACA Partners 3 points each for first 5 partners (including FCA partners) and 1.5 points each for 6th partner onwards.
Points for long association with the same firm 3 points for each partner above 15 years.
2 points for each partner below 15 years and above 10 Years.
1 point for each partner below 10 Years and above 5 Years.
Full Time CA Employees 1 point each for first 20 C.A Employees and 0.5 point each for 21st C.A Employee onwards.
CISA/ISA Qualified Partners 3 points for Ist partner, 2 points each for 2nd and 3rd partners-maximum 7 points for 3 partners.
CISA/ISA Qualified Employees 1 point each – Maximum 3 points for 3 employees.

Selection of CA firms for appointment as statutory auditors of PSUs where audit fee is above Rs 1.50 lakh (Major Audits)

(a)          Criteria for short-listing eligible firms of CAs for allotment of Major Audits are as under:

(i)                The firm should have at least 6 CAs (out of which 5 should be partners and one could be a full time paid CA employee), which is indicative of capacity to handle big audits.

(ii)             At least one partner should have an association of 10 years or more with the firm and at least 3 partners of the firm should have an association of 5 years or more with the firm and the remaining two should have an association of one year or more with the firm, to demonstrate stability over time.

(iii)           The firm itself should have been in existence for 10 years or more, to prove that it is a well established firm.

(b)                          Allotment of major audits is based not only on the size of the firm considering the number of partners, and their association with the firm, number of Chartered Accountant employees, and the Zone in which the firms’ head office is located but also on the basis of factors such as sectoral experience, capability of handling big audits, past performance, eligibility of the firm to conduct a particular audit, location of the firm’s branch offices etc.

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Tags : chartered accountants (542) Empanelment (485) ICAI (2200) Statutory Audit (108)

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