Assurance Gazette – March 2025 Edition

We are thrilled to present the March, 2025 edition of the Assurance Gazette. This edition highlights the importance of auditor communication with Audit Committees, focusing on Expected Credit Losses (ECL) under Ind AS 109. Emphasizing audit quality, financial integrity, and regulatory compliance, it addresses key audit considerations, management judgments, and best practices. Introduced by NFRA in Auditor-Audit Committee Interaction Series 1, this initiative aims to enhance transparency and strengthen the audit process. This edition also highlights the second communication in the Auditor-Audit Committee Interactions Series, focusing on Deferred Tax Assets and Liabilities. Recognizing the complexities of deferred tax accounting, NFRA presents 27 key questions to support Audit Committees in strengthening oversight and ensuring compliance with accounting standards. This guidance promotes transparency, enhances audit effectiveness, and upholds financial integrity.”

NFRA’s Auditor-Audit Committee Interaction Series on Expected Credit Losses

Introduction

Expected Credit Loss, under Ind AS 109, is crucial for timely credit risk recognition, ensuring accurate financial reporting and asset valuation. By considering past data, current conditions, and future forecasts, it enhances transparency, regulatory compliance, and investor confidence, aligning with the applicable financial reporting framework. NFRA’s Auditor-Audit Committee Interaction Series 1 highlights key questions Audit Committees may raise with auditors on ECL

Nangia’s Take

National Financial Reporting Authority (NFRA) has introduced the Auditor-Audit Committee Interaction Series, emphasizing the critical role of auditor communication with Audit Committees, particularly regarding Expected Credit Losses (ECL) under Ind AS 109. This initiative presents key questions to enhance understanding of compliance, transparency, and accountability in ECL financial reporting. By strengthening Auditor-Audit Committee interaction and offering greater clarity on the measurement and recognition of ECL allowances, it ensures proper reporting to the Audit Committee, strengthening oversight of a company’s credit risk management and financial health.

NFRA: Second communication of Auditor-Audit Committee Interactions Series, focusing on Deferred Tax Assets, Liabilities

The National Financial Reporting Authority (NFRA) has released the second installment of its “Auditor-Audit Committee Interactions Series,” focusing on the audit of income taxes, particularly Deferred Tax Assets (DTAs) and Deferred Tax Liabilities (DTLs) as outlined in Ind AS 12. This follows the initial communication, which covered the assessment of Expected Credit Losses.