To ensure information is disseminated to investors on time, Sebi has revised the disclosure requirements for companies with respect to impact of "qualifications" made by auditors on their reports.
The changes will further streamline the whole process and also ensure the impact of audit qualifications is disseminated to investors without any delay.
Now, listed entities will be required to disclose the cumulative impact of all audit qualifications on relevant financial items in a separate form called 'Statement on Impact of Audit Qualifications' instead of the present form.
Such disclosures will have to be made in a tabular form, along with annual audited financial results filed in terms of listing regulations.
The new mechanism will be applicable from April 2016, Securities and Exchange Board of India (Sebi) said in a notification dated May 25.
The notification comes after Sebi board had approved the new norms in March. The same was incorporated in the Sebi (Listing and Other Disclosure Requirements) Regulations.
In case there are no audit qualifications, companies will not have to file a particular form as required now.
The management will have the right to give its views on the audit qualification in the new form and the existing requirement of adjustment in the books of accounts of the subsequent year will not be necessary.
Already, the regulator has a mechanism to review the audit qualifications in the audit report.
