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Audit delays due to Covid-19? e- Signatures to the rescue!

Covid-19 has affected countries across the world in various ways. One of the many challenges Companies are facing in the current circumstances that has confined people to their homes is getting their annual accounts finalised. Even if companies are able to complete the draft their accounts on time, those that are required to complete an audit by external auditors have to also find ways to get the signature of their auditors.

Bearing these challenges in mind, the Institute of Chartered Accountants of India has been quick to react and introduced policy changes through which they have authorised the use of electronic  signatures for e-signing of audit reports, all reports issued pursuant to any attestation engagement and certificates.

What is an e-Signature?

Electronic signature refers to the authentication of any electronic record by a subscriber means of electronic techniques identified and specified in Schedules released by the ICAI including digital signature.

The e-Signature has been approved under the provisions of the Information Technology Act, 2000 enacted on 17th May 2000 to provide legal recognition for electronic transactions.

Objectives of the Information Technology Act, 2000 :

  • Grant legal recognition to E-Transactions
  • Provide legal recognition to Digital Signatures for authentication
  • Facilitate E-Filing of data and information
  • Allow electronic storage of data
  • Grant recognition to the maintenance of books of accounts in electronic form.

The board of ICAI has mentioned that while members of ICAI may use an e-signature for signing audit reports, they must ensure compliance with all the requirements relating to signature including the requirement to mention UDIN.

What is UDIN?

A UDIN, Unique Document Identification Number, is  an 18 digit system generated unique number for every document certified or attested by Practicing Chartered Accountants.

To curb the malpractices in attestations by third persons misrepresenting themselves as CAs and misleading Authorities and Stakeholders, the Committee of ICAI has implemented the innovative concept of UDIN also known as Unique Document Identification Number in a phased manner. It is intended to secure certificates attested by practicing CAs and enable regulators or banks or relevant third parties verify the authenticity of attested documents.

The stakeholders are supposed to note that the requirement to mention UDIN is applicable both for manually and digitally signed reports/certificates including certificates uploaded online.

It is up to companies to now take advantage of this facility to ensure they do not face last minute pressure in getting their audit reports finalised and signed.

 

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