Under Clause (xli) of the revised Code of Corporate Governance (CCG) 2012, the external auditor is now required to highlight all non-compliances with the CCG requirements in the Review Report. This created a requirement to revise the existing Review Report format on Statement of Compliance (SOC) issued via ICAP circular No.9/2009 dated January 19, 2009.
- Where management has accepted and disclosed the non-compliances in the Statement of Compliance; the auditor would only have to reiterate what management has already accepted by highlighting the material non-compliances in the Review Report. Clean Review Report would be issued in this case.
- In case of clean report the non-compliances will be highlighted along with the note reference of the Statement of Compliance after the opinion paragraph in the Review Report.
- Where the non-compliance is on the part of the Company but management is neither accepting nor disclosing the fact, the auditor would issue Modified Review Report (similar to the earlier practice).
- In case of modified report, the auditor would report instances of non-compliances, on the basis of which report is modified, before the opinion paragraph in the Review Report.
- It may not be possible to highlight all non-compliances; hence it would be at discretion of the auditor to highlight the material non-compliances in the Review Report.
The Council of the Institute has approved the enclosed revised review report in its 250th meeting held on January 25, 2014.
Members are advised to take note of the above.
Revised Review Report – CCG 2012 (Download the pdf)