PEER REVIEW BY CS KP DUTT. WHAT IS PEER REVIEW  “Peer” means a person of similar standing (one’s equals). “Review” means general survey or assessment

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NEED FOR PEER REVIEW Expectation of service Receiver to receive quality service Gap between minimum quality of service and actual service rendered. Reassuring stakeholders & society at large that the profession is conscious of its responsibilities and strives its best to ensure that highest standards are observed by all practising members rendering secretarial audit & attestation services to corporates. Peer Review process is an endeavor to enhance quality of services rendered by members of ICSI in practice as it helps in: Maintenance and enhancement of quality of attestation services provided by members Assisting members in identifying areas of improvement and receiving guidance from peer members Sharing of good practices/experience and mutual learning among peer members

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PEER REVIEW BY CS KP DUTT WHAT IS PEER REVIEW Peer means a person of similar standing (ones equals). Review means general survey or assessment of a subject or thing. Peer Review means review of work done by a professional, by another professional of similar standing. Peer review is a process of self-regulation by a profession or a process of evaluation involving qualified individuals within the relevant field. Peer review methods are employed to maintain standards, improve performance and provide credibility. Some people call it Auditing the Auditors. NEED FOR PEER REVIEW Expectation of service Receiver to receive quality service Gap between minimum quality of service and actual service rendered. Reassuring stakeholders & society at large that the profession is conscious of its responsibilities and strives its best to ensure that highest standards are observed by all practising members rendering secretarial audit & attestation services to corporates. Peer Review process is an endeavor to enhance quality of services rendered by members of ICSI in practice as it helps in: Maintenance and enhancement of quality of attestation services provided by members Assisting members in identifying areas of improvement and receiving guidance from peer members Sharing of good practices/experience and mutual learning among peer members Global Scenario-Public Accountancy Started 1930 in France. Independent Regulator in certain countries. Existence in most of the developed Countries- About 50. In some countries disciplinary action if deficiency in services of Auditor is found. In US, public accountancy firms are required to enrol in an approved Practice Monitoring Programme in order to be admitted to or retain membership in AICPA (professional body in the US). Further, under Sec 104 of the Sarbanes-Oxley Act, 2002 they are additionally liable to be inspected by PCAOB (Public Companies Accounting Oversight Board), to assess the degree to which each firm and associated persons comply with the Act, PCAOB and SEC rules, professional & reporting standards. Global Scenario- UK Audit Inspection Unit (AIU), part of Professional Oversight Board (POB), is responsible for monitoring of audits of all listed and other major public interest entities. AIU was set up following Governments post-Enron review of the regulation of the UK accountancy profession which reported in January Review teams report recommended enhancing monitoring of audits of listed and other major public interest entities through a new independent inspection unit (AIU) reporting to POB within an integrated independent regulator (FRC). Professional accountancy bodies continue to register firms to conduct audit work with their regulatory activities being overseen by the POB. Audit registration committees of accountancy bodies receive formal reports from AIU on its monitoring work, with POB overseeing action taken by them in response to AIUs recommendations. The Companies (Audit, Investigations and Community Enterprises) Act 2004 implemented statutory changes necessary to give effect to these arrangements. INDIA ICAI Statement on Peer Review was released in 2002 which lays down the framework for conduct of Peer reviews by setting up Peer Review Board in April 2002 which is operational from Peer Review mechanism covers all Practice Units or Chartered Accountants Firms / Members Practicing in Individual name in three stages with different types of practice units being included at each stage. Peer Review is a mechanism to proactively pursue, upgrade and maintain audit quality standards in India. It aims to maintains and enhance quality of attestation services and to enhance quality of professional work and has no relationship whatsoever with any disciplinary or any other regulatory mechanism. Major differences between India and some developed countries In some other countries, findings of peer review can lead to disciplinary proceedings but not in India However, in India, system of peer review is intended to be educative and is aimed at enhancing quality of attestation services rendered by members of Institute who are in public practice. Further, findings of peer review shall not result in any disciplinary proceedings against any member PEER REVIEW AND QUALITY REVIEW DIFFERENCE PEER REVIEW BOARDQUALITY REVIEW BOARD (QRB) Supervisor within ICSI. Constituted by the Council. Consist of maximum 7 members. Peer Reviewers are Individual Members of Institute Covers only members in practice. Only Attestation services. No disciplinary action even if there is deficiency in service. Constituted by Central Govt. Consist of Chairperson & 4 other members to be appointed from amongst persons of eminence in law, economics, business, finance, accountancy. 2 members to be nominated by Council & other 2 members by Central Govt. Covers all members in practice & employment Covers all services provided by members both attestation & non attestation. Disciplinary action if there is a deficiency in service. Member guilty of professional misconduct, if he doesnt supply information called or doesnt comply with requirements asked by QRB. ICSI PEER REVIEW - A TOOL FOR PROFESSIONAL EXECLLENCE The Council of ICSI issued Guidelines for Peer Review of Attestation Services by Practising Company Secretaries vide notification dated Applicable from Main objective is to ensure that in carrying out their attestation services and professional assignments, the PCS- complies with the Technical Standards laid down by the Institute & have in place proper systems (including documentation systems) for maintaining the quality of the attestation services work they perform. ICSI Peer Review Means examination & review of systems, procedures & practices to determine whether they have been put in place by the practice unit for ensuring the quality of attestation services as envisaged and implied/ mandated by the Technical Standards & whether these were effective or not during the period under review Directed towards maintenance as well as enhancement of quality of attestation services, Through review of attestation services engagement records, peer review identifies areas where a member may require guidance in improving the quality of his performance, provides guidance to members to improve-their performance and adhere to Technical Standards and various statutory/regulatory requirements. Advantages of Peer Review to Practice Unit: enhance the quality of attestation services/professional competence. provides reassurance that the systems and procedures followed by him match the desired standards of the Institute adds value to its image and enhance credibility in the eyes of corporate sector and provide competitive advantage. provide a forum for Guidance and knowledge sharing Important Definitions Practice Unit means members in practice, whether practicing individually or as firm. Attestation Services means services involving secretarial audit issuing of various certificates, but excluding: Management consulting Engagement; Representing a client before the Authorities; Testifying as expert witness; & Providing expert opinion on points of principle, such as secretarial standards or the applicability of certain laws, on the basis of facts provided by the client, The phrase Attestation Services is used in guidelines interchangeably with secretarial or compliance audit Services, Attestation Functions & secretarial audit functions. Important Definitions contd.. Technical Standards means & include: Secretarial Standards issued by ICSI, wherever mandatory; Guidance Notes on Secretarial Standards issued by ICSI; Compliance of the Guidance Notes issued by ICSI; Notifications/Directions issued by the Council of ICSI; Compliance of the provisions of various relevant Statutes and/or Regulations, which are applicable in the context of specific engagements being reviewed PEER REVIEW BOARD Established by the Council. To consist of maximum 7 members to be appointed by the Council, of whom at least 4 to be from amongst Members of the Council. Balance members shall be from amongst prominent members of high integrity and reputation, including but not limited to former public officials, regulatory authorities etc. At least one-half of Council Members on the Board shall hold Certificate of Practice. DUTIES OF PEER REVIEW BOARD Call for information from practice units; Maintain a panel of Reviewers; Define terms of appointment of reviewers; To send Panel of at least 3 reviewers to practice unit & allow practice unit to choose any one reviewer from panel; To examine aspects of basis of selection of records pertaining to attestation services in terms of Technical Standards; Arrange training programs for reviewers; Prescribe the system, practice & procedure to be observed in relation to peer reviews; On considering report of reviewer to issue recommendations to Practice unit and/or to order further peer review; After considering report of reviewer & compliance of recommendations by Practice Unit, to issue Peer Review Certificate. To guide members on best practices REVIEWER MEANING AND QUALIFICATION Reviewer means any member of ICSI engaged to carry out peer review of practice unit from panel of reviewers. Qualification of Reviewer: He shall:- Be a member; Possess at least 10 years experience; & Be currently in practice as Company Secretary in Practice. He shall submit preliminary/interim/final report to Peer Review Board. Peer Reviewer shall maintain strict secrecy and confidentiality while carrying out Peer Review and file a confidentiality statement before commencement of Peer Review. Breach of these conditions may lead to Professional Misconduct under CS Act, Peer Review Board may examine quality of report of reviewer & shall have powers to remove him from panel of reviewers in case quality of review/report fails to match desired standards. Scope, Focus &am