Revised Eligibility Criteria for Appointment of Statutory Central Auditors (SCAs)/ Statutory Auditors (SAs) from FY 2021-22 and onwards
RBI has revised the Guidelines for Appointment of Statutory Central Auditors (SCAs)/ Statutory Auditors (SAs) of banks etc. The circular inter alia provides for the eligibility criteria for appointment.
Eligibility Criteria for Appointment of Statutory Central Auditors (SCAs)/ Statutory Auditors (SAs)
As per the revised Guidelines, the eligibility Criteria for Appointment as SCA/SA is as under:
(a) Basic Eligibility
|Asset Size of Entity as on 31st March of Previous Year||
Minimum No. of Full-Time partners (FTPs) associated with the firm for a period of at least three (3) years
|Out of total FTPs, Minimum No. of FCA Partners associated with the firm for a period of at least three (3) years||
Minimum No. of Full Time Partners/ Paid CAs with CISA/ISA Qualification
|Minimum No. of years of Audit Experience of the firm Note-3||Minimum No. of Professional staff Note-4|
|Above ₹15,000 crore||5||4||2||15||18|
|Above ₹ 1,000 crore and Up to ₹15,000 crore||3||2||1||8||12|
|Up to ₹1,000 crore||2||1||1||6||8|
For UCBs and NBFCs with asset size upto ₹ 1,000 crore, there is no minimum requirement in this regard. However, such Entities may give priority to firms with full time partners or full time CAs having CISA/ISA qualification. There should be at least one-year continuous association of Paid CAs with CISA/ISA qualification with the firm as on the date of empanelment (for PSBs)/ shortlisting (for other Entities) for considering them as Paid CAs with CISA/ISA qualification for the purpose.
Professional staff includes audit and article clerks with knowledge of book-keeping and accountancy and who are engaged in on-site audits but excludes typists/stenos/computer operators/ secretaries/subordinate staff, etc. There should be at least one-year continuous association of professional staff with the firm as on the date of empanelment (for PSBs)/ shortlisting (for other Entities) for considering them as professional staff for the purpose.
B. Additional Consideration
C. Continued Compliance with basic eligibility criteria
For the purpose of this circular, Group entities shall mean two or more entities related to each other through any of the following relationships, viz. Subsidiary – parent (defined in terms of AS 21), Joint venture (defined in terms of AS 27), Associate (defined in terms of AS 23), Promoter-promotee [as provided in the SEBI (Acquisition of Shares and Takeover) Regulations, 1997] for listed companies, a related party (defined in terms of AS 18), Common brand name, and investment in equity shares of 20% and above.
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