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NEW DELHI, April 2

THE Institute of Chartered Accountants of India (ICAI) has come out with a "statement on peer review" which seeks to aid the professional firms in their quest for enhancement of the quality of work.

The main objective of peer review was to ensure that in carrying out their professional audit assignments, the ICAI members complied with the technical standards laid down by the institute and had in place proper system (including documentation systems) for maintaining the quality of the audit work they performed, the ICAI President, Mr Ashok Chandak, said.

Explaining further, he said that peer review did not seek to redefine the scope and authority of the technical standards specified by the council, but sough to enforce them within the parameters prescribed by the technical standards. Technical standards include accounting standards, statements on standard accounting practices, other authoritative pronouncements of the institute as well as notifications and directions that are given by the council to the members of the institute.

The Minister for Law, Justice and Company Affairs, Mr Arun Jaitley, formally released the statement finalised by the council of ICAI here.

ICAI has set up a Peer Review Board comprising 11 members, of whom six would be from the council and one member each from the Department of Company Affairs (DCA), Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Comptroller and Auditor General (C&AG), trade and commerce organisations which will have complete authority to get peer review conducted.

The board will be independent and will have its independent secretariat. The Peer Review Board is to be headed by Mr Sunil Bhargava, Chartered Accountant.

Further, the actual conduct of a peer review will be done by a reviewer (who will be a practising chartered accountant appointed by the board from a panel maintained by it for the purpose. The board on the receipt of the final report of the reviewer will decide whether or not to issue a certificate of peer review.

Even though peer review will be mandatory for all firms, the implementation will be staggered given the large number of audit firms all over the country. The first phase of implementation will begin on April 1, 2003.

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