Background:
On November 22, 2023, the Institute of Chartered Accountants of India (ICAI) proposes the Exposure Draft of Standards on Auditing for Limited Liability Partnerships (LLPs). This development aligns with Section 34A of the Limited Liability Partnership Act, 2008, empowering the Central Government, in consultation with the National Financial Reporting Authority (NFRA), to prescribe auditing standards for LLP as recommended by ICAI for class or classes of LLPs.
Key Features of the proposed SAs
1-The proposed draft of SA for LLP gives a wide range of auditing procedures, covering all aspects of the audit process from planning to communication of finding to the users of financial statement
2-This proposed standard provides a structural framework for auditor to ensure that LLPs audit conduct with due care
Significance of the proposed SAs
1-Enhanced Transparency- LLPs will be subjected to same audit standard as companies, enhanced greater
transparency in their financial reporting.
2-Consistent Accounting Practices: By applying the same auditing standard across the companies and LLP, it ensures uniformity and consistency in auditing practices.
Comprehensive overview of Key SAs Applicable
1-SA 200- Overall Objective of the Independent Auditor and the conduct of audit in accordance with standard on auditing
2-SA 210- Agreeing the terms of audit engagements
3-SA 220- Quality Control for an Audit of financial statement
4-SA 230- Audit Documentation
5-SA 240- The Auditors responsibilities related to fraud in an audit of financial statements
5-SA 250- Consideration of law and Regulation in an Audit of Financial Statement
6-SA 260- Communication with those charged with Governance
7-SA 265- Communication Deficiencies in internal control to those charged with governance and management
8-SA 280- The Auditors Responsibilities for sampling in an audit of financial statement
9-SA345- Audit Procedures in response to risks
10-SA 365- Auditing Group Financial Statements
11-SA 410- Audit of Related Party Transactions
12-SA 500- Audit Evidence
SW Point of View:
The adoption of proposed Sas will significantly enhance the consistency in auditing practices for LLPs and ICAI has invited comments on this exposure draft by Jan 6, 2023.
