Role and functions of the Quality Review Board established u/s 28A of the Chartered Accountants Act, 1949.
Government of India has, in exercise of the powers conferred under Section 28A of the Chartered Accountants Act, 1949, constituted a Quality Review Board (the ‘Board’) to perform the following functions u/s 28B of the Chartered Accountants Act, 1949:-
a) to make recommendations to the Council with regard to the quality of services provided by the members of the Institute;
b) to review the quality of services provided by the members of the Institute including audit services; and
c) to guide the members of the Institute to improve the quality of services and adherence to the various statutory and other regulatory requirements.
2. Government of India has also issued ‘Chartered Accountants (Procedures of Meetings of Quality Review Board, and Terms and Conditions of Service and Allowances of the Chairperson and Members of the Board) Rules, 2006’. In terms of its Rule 6, in the discharge of its functions, the Board may, inter alia, evaluate and review the quality of work and services provided by the members of the Institute in such manner as it may decide and also lay down the procedure of evaluation criteria to evaluate various services being provided by the members of the Institute and to select, in such manner and form as it may decide, the individuals and firms rendering such services for review. Pursuant to the Rule 6, the Board has issued the detailed ‘Procedure for Quality Review of Audit Services of Audit Firms’ (the ‘Procedure’) providing for various matters, adopting best practices, in laying down the necessary system for conducting reviews of audit firms undertaking audits of public interest entities in India. Further details can also be accessed through the website www.qrbca.in.
3. In terms of the aforesaid Procedure, the Quality Review Board has initiated a robust system of independent review of statutory audit services of the audit firms auditing accounts of public interest entities in India since August 2012 pursuant to a process comprising selection of the audit firms for review and engagement of Technical Reviewers. The Board has engaged about 85 Chartered Accountants as ‘Technical Reviewers’ based upon stringent and transparent criteria. The Board has adopted best international practices in its inspection techniques and methods with a view to achieving professional excellence in public interest.
4. Since 2012, the Quality Review Board has selected 215 Audit firms for review of the quality of audits of 261 entities also covering more than 70% market cap of the stocks listed on NSE/BSE. Of these, 195 reviews have been completed and it has been observed that 118 reviews (i.e., 60%) indicated need for improvement in diverse areas. According to the mandate provided by Parliament, the Board has made recommendations in 27 cases to the ICAI Council for taking further action and issued appropriate advisories to the concerned audit firms in another 91 cases for improving the quality of audits in specific areas.
5. Being an independent and sole statutory body mandated to review the quality of audit services provided by the Chartered Accountants in India, the Quality Review Board has also established linkages and co-operation with the other international bodies and organizations such as the International Forum of Independent Audit Regulators (IFIAR) and other prominent bodies such as Public Company Accounting Oversight Board (PCAOB) of the US and CPAAOB of Japan. IFIAR is the umbrella organization of independent audit oversight authorities of various countries. Currently, 50 countries from across the world are represented in IFIAR except India. World Bank, European Commission, Financial Stability Board, Public Interest Oversight Board, Basel Committee of Banking Supervisors, International Organisation of Securities Commission (IOSCO) and International Association of Insurance Supervisors are permanent Observers to IFIAR Meetings.
6. The Board also issues periodic Reports on Audit Quality Review Findings providing analysis and summary of observations made by the Technical Reviewers in review reports which are freely available in public domain at the website of the Quality Review Board (http://www.qrbca.in). Based on the aforesaid reviews, Key Learnings for the Audit firms have also been hosted at its website at http://www.qrbca.in/wp-
With kind regards,
Secretary, Quality Review Board
Gr. Floor, Admin. Block, ICAI Bhawan,
A-29, Sector 62, NOIDA – 201309, (U.P.)
Ph: +91 120 3045983; Telefax: +91 120 3045984,