Page 115 - Quick Insights Book 2022

Ann. 1 – Policy of Empanelment of CA Firms/LLPs and Selection of Auditors

S. Criteria Points
No.
4. Points for full time CA Employees One point each for 5 full time CA employees and half point each
for remaining 15 full time CA Employees
(Only 20 full time CA employees will be
awarded points)
5. Points for Qualifications of the full time CA
Employees (Maximum five points)
5(a) 1. DISA certification from ICAI 1 point each One full time CA Employee will be awarded
points for one qualification only. Maximum 5
2. CISA certification from ISACA, USA
full time CA employees will be awarded points
5(b) 1. Certification in IND AS from ICAI 0.5 point each
2. Certification in Forensic Accounting and
Fraud Prevention from ICAI
6. Turnover of the firm/LLP from Audit Services Maximum 5 points
only (as distinct from other activities e.g.
consultancy)

Deduction of points
i. Refusal of Audit
The point score of the firm/LLP, will be reduced by 10 percent, in case, in the immediate preceding year, the firm/
LLP had refused the audit assigned to it by this office, for reasons other than being disqualified to act as auditor of
the assigned audit under the provisions of any Act /statute or conditions issued by this office etc. In case, the firm
refuses the allotted audit for the second time, the firm would not be empanelled from the subsequent year.
ii. Professional Misconduct

The point score of the firm/LLP will be reduced by 10 percent each for sole-proprietor, partner/s and employee/s who
is/are held guilty of professional misconduct during the previous year under the Chartered Accountants Act 1949.
Apart from deduction of points, the firm/LLP would not be given any credit for the said Chartered Accountant/s.
iii. Unsatisfactory performance

The point score will be reduced by 10 percent, in case the performance of the firm/LLP was found unsatisfactory
and the firm/LLP was issued an advisory by this office to be more careful in future in the immediate preceding year.

B. Allotment of Audits

• Selection of firms/LLPs for appointment as auditors where audit fee is up to Rs 1.50 lakh

The selection is made by correlating the point score earned by each firm/LLP of Chartered Accountants towards
empanelment with the size of the audit fee.

• Selection of firms/LLPs for appointment as auditors where audit fee is more than Rs.1.50 lakh (Major Audits)
(a) Criteria for short-listing eligible firms/LLPs of CAs for allotment of Major Audits are as under:

(i) The firm/LLP should have at least 6 full time CAs (out of which 5 should be full time partners and one could
be a full time paid CA employee), which is indicative of capacity to handle big audits .

(ii) At least one full time CA partner should have an association of 10 years or more with the firm/LLP and at least
3 full time CA partners of the firm/LLP should have an association of 5 years or more with the firm/LLP and
the remaining two full time CA partners should have an association of one year or more with the firm/LLP, to
demonstrate stability over time.

(iii) The firm/LLP itself should have been in existence for 10 years or more, to prove that it is a well established
firm/LLP.

102 Quick Insights on Professional Opportunities for Chartered Accountants