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Issue no. 37 | August 2019

Issue no. 37 | August 2019

The new requirement of communicating Key Audit Matters (KAMs) in the auditor’s report has been made applicable for audit of financial statements...

The new requirement of communicating Key Audit Matters (KAMs) in the auditor’s report...

The new requirement of communicating Key Audit Matters (KAMs) in the auditor’s report has been made applicable for audit of financial statements of listed companies in India from the period ended 31 March 2019. The requirement aims to provide greater transparency about the audit and enhance the communicative value of the auditor’s report to the users of the financial statements by highlighting those matters that are subject to the highest level of management judgement and require significant auditor attention during the course of audit. In this edition of Accounting and Auditing Update (AAU), we have included an analysis of the KAMs reported by the statutory auditors of Nifty 50 listed companies in their audit reports on the consolidated financial statements for the year ended 31 March 2019. Our article highlights top 10 financial reporting areas where KAMs have been reported by Nifty 50 listed companies along with sector wise break up of KAMs.

Recently, the Supreme Court (SC) of India has issued a judgement which clarifies the treatment of various allowances such as travel allowance, canteen allowance, special allowance, management allowance and conveyance allowance, etc. paid by an establishment to its employees for the purpose of computation of provident fund. Our article on the topic aims to discuss the significant challenges posed by the SC judgement.

Insider trading is an undesirable practice which tends to distort the market by creating unfair advantage in favour of those who profit on the basis of Unpublished Price Sensitive Information (UPSI). To ensure investor protection through fair market practices, the Securities and Exchange Board of India (SEBI) formulated the SEBI (Prohibition of Insider Trading) Regulations (SEBI PIT Regulations). The SEBI PIT Regulations prescribe various norms to ensure confidentiality of UPSI by a listed company and thus, can curb the practice of insider trading. Our article on the topic provides an overview of the key requirements of the SEBI PIT Regulations and compliances applicable to listed companies.

As is the case each month, we have also included a regular round-up of some recent regulatory updates.

 

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