ICAI’s Guidance Note on Audit of Consolidated Financial Statements (Revised 2016)

Guidance Note of ICAI on Audit of Consolidated Financial Statements (Revised 2016)

Auditing and Assurance Standards Board of the ICAI has issued the Revised Edition 2016 of the Guidance Note on audit of Consolidated Financial Statements which also covers the procedures for preparation and presentation of consolidated financial statements under AS/ Ind AS.

This Guidance Note was originally issued in 2003 to provide guidance to the members undertaking audits of consolidated financial statements. Since the issuance of this Guidance Note, a number of developments have taken place like notification of the Companies (Accounting Standards) Rules, 2006, replacement of the Companies Act, 1956 by the Companies Act, 2013, issuance of the Indian Accounting Standards (Ind AS) by ICAI, notification of the Companies (Indian Accounting Standards) Rules, 2015. These developments necessitated the revision of the Guidance Note.

Further, the ICAI had issued Accounting Standard (AS) 21 on ‘Consolidated Financial Statements’ which was subsequently notified as a part of the Companies (Accounting Standards) Rules, 2006 by Ministry of Corporate Affairs and subsequently amended vide the Companies (Accounting Standards) Amendment Rules, 2016. Also Ind AS 110, ‘Consolidated Financial Statements’ has been issued as a part of the Companies (Indian Accounting Standards) Rules, 2015 by Ministry of Corporate Affairs. Accounting Standard 21 and Ind AS 110 lay down principles and procedures for preparation and presentation of consolidated financial statements under AS and Ind AS respectively.

Revised edition 2016 of the ‘Guidance Note on Audit of Consolidated Financial Statements’ incorporates the impact of the above referred developments in appropriate manner. The Guidance Note covers aspects such as introduction, definitions, responsibility of the parent, responsibility of the auditor of consolidated financial statements, audit considerations, auditing the consolidation, special considerations, management representations, reporting, etc. For the benefit of the members, the Appendices to the Guidance Note include the illustrative formats of auditor’s report on consolidated financial statements.

ICAI’s Guidance Note on Audit of Consolidated Financial Statements (Revised 2016)


Guidance Note on Consolidated Financial Statements: ICAI invites comments on Exposure Draft (dt. 11 Aug. 2016)

The Auditing and Assurance Standards Board of the ICAI has issued the Exposure Draft of the Guidance Note on Consolidated Financial Statements, inviting comments on any aspect of this Exposure Draft by 10 Sept. 2016.

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