NFRA Releases Series 4: Strengthening Auditor-Audit Committee Dialogue on Asset Impairment
The National Financial Reporting Authority (NFRA) has released the Auditor-Audit Committee Interactions Series 4, titled “Audit of Accounting Estimates and Judgements-Impairment of Non-financial Assets-Ind AS 36, SA 540, etc.”
From its reviews and monitoring work, NFRA noticed that communication between statutory auditors and audit committees/boards needs to be stronger. Clear discussions are important, especially on complex topics like impairment of non-financial assets. This is also required under the Companies Act, 2013, the Standards on Auditing (SA 260R, SA 265, SA 540, etc.), and the Standard on Quality Control (SQC).
The role of NFRA is to recommend ways to improve overall audit quality, spread awareness about accounting and auditing standards, remind auditors about their responsibilities, and protect investors and the public interest. Hence, keeping in mind the aim of NFRA to protect public interest and investors, NFRA continues with its series of Auditor-Audit Committee Interactions, which are being issued on significant areas of accounting and auditing from time to time.
This NFRA’s new Auditor-Audit Committee Interactions Series 4 attracts the concentration of auditors to the types of questions the Audit Committees/Board of Directors may ask them regarding impairment of non-financial assets. It includes aspects belonging to the audit of impairment of non-financial assets as required by Ind AS 36, Impairment of Assets, and SA 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures.
