The Securities and Exchange Board of India (SEBI) is seeking public comments on a proposing that listed companies file a separate report on digital assurance of financial statements.
This proposal, which is in addition to the existing listing obligations and disclosure requirements, aims to provide better investor protection and trust in financial disclosures by listed companies. The SEBI also aims to improve transparency and disclosure standards, leading to better enforcement.
The proposed changes have been introduced after consultation with the primary market advisory committee.
The technical guide on digital assurance is a set of guidelines to help Institute of Chartered Accountants of India members adopt technology for audit evidence and information. As per the proposed rules, the audit will now require a compliance report based on the technical guide.
The report will include two key components – the management statement and auditor’s/independent practitioner’s report.
Company management will be responsible for preparing the statement, which must include all supporting documentation and maintenance of documents. The management will:
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- Provide auditor access to external data repositories;
- Ensure information is complete and accurate, and the report complies with all the requirements of the law; and
- Maintain all accounting and other records.
The auditor/independent practitioner will examine the statement and supporting documentation to see if the information is as per the requirements of the law.
The top 100 listed companies based on market capitalisation from the financial year of 2024-2025 will be required to provide the digital assurance report to the stock exchange by 31 July 2025. After this, for each financial year, the report must be filed on 31 July and any delay will incur a fine.
