The National Financial Reporting Authority (NFRA) on Wednesday issued a consultation paper on statutory audit and auditing standards for micro, small and medium companies.
In a release, the watchdog said it was appropriate to revisit the requirement of compulsory statutory audit for all companies irrespective of their size and/or public interest.
The deadline for submitting comments on the consultation paper on statutory audit and auditing standards for Micro, Small and Medium Companies (MSMCs) is November 10.
According to a preliminary analysis done by the regulator on the key financial parameters of the companies, the fees paid to auditors by a large majority of MSMCs are way below what an audit, when performed in compliance with the letter and spirit of the standards of auditing, would require.
"Major economies of the world require statutory audit for small companies only in case some minimum criteria of public interest are satisfied.
"Even in India, income tax audit is now not compulsory where the turnover is Rs 10 crore or less provided not more than 5 per cent of the transactions are in cash. GST audit has also been completely done away with," the release said.
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Published 29 September 2021, 18:58 IST