Certification of Current Assets & Liabilites by Independent Auditors
Circulation has been issued by The Institute of Chartered Accountants of Nepal clarifying the provision made in the FY 2075/76 fiscal policy with regards to certification by the auditor in current assets and current liabilities schedules. According to the circulation, following auditors are not eligible for the certification work:
1) Current External Auditor, Internal Auditor or Financial Advisor of the loanee (borrower).
2) Current External Auditor and Internal Auditor of the loaner banks and financial institution.
Who was required to have the certification?
Any loanee intending to borrow or renewing their existing loan of more than NPR 25 crore provided such loans are proposed to be used as working capital.
What is the need of the circular?
To bring independence and objectivity in the certification work and expand the current market of certification.
What does it mean for the loanee?
Loanee before applying for the loan has to have their financial statements finalized, reviewed and approved by the auditor independent of their business. The cost of doing business will increase but depending on the loan amount, the cost involved might not be significant. Currently, most of these certification works were carried out by internal auditors but now they have to find someone independent.
What does it mean for auditor?
As loanee has to find new auditors independent of their current operation, chances are high that new auditors will have an opportunity for the certification. It will expand the current audit & assurance market and will be helpful in creating equal opportunity among old (renowned) and new audit firms.
Where can loanee find the list of auditors?
Loanee can consult with their current auditors or go through the website of the Insitute of Chartered Accountants of Nepal to get the complete list of auditors.
A full description of the circulation in Nepali is given below:
