The Securities and Exchange Board of India (“SEBI”) has issued a Draft Circular on Management Statement and Auditor’s/Independent Practitioner’s Report on Digital Assurance, inviting public comments by 24^th February 2025. The circular proposes mandatory digital assurance reporting by the Top 100 listed entities by market capitalization from FY 2024-25 i.e., for the period ending on or after 31^st March 2025. The listed entities must submit management statement and auditor’s report on digital assurance to stock exchanges report by 31^st July each year.

Key Proposals:

1. Mandatory Digital Assurance Report for Listed Companies:
   • Listed entities must submit a separate digital assurance report along with financial statements.
   • Report to be based on data obtained from external regulatory repositories (e.g., GST Portal, Income Tax e-portal).
2. Responsibilities of Management:
   • Provide auditors access to external data repositories.
   • Maintain and furnish complete and accurate financial information.
   • Ensure compliance with SEBI’s LODR regulations and disclosure norms.
3. Auditor’s/Independent Practitioner’s Responsibility:
   • Verify financial data against external regulatory sources.
   • Conduct audits as per ICAI’s Technical Guide on Digital Assurance.
   • Submit a report verifying financial accuracy and compliance.
4. Standardization and Format of Reporting:
   • Management Statement and Auditor’s Report to be prepared as per Annexure I.
   • The report must reconcile financials with external data sources and explain discrepancies.
5. Scope of External Data Verification:
   • Cross-checking financial statements with records from GST, TRACES (TDS data), EPFO, and other regulatory portals.
   • Ensuring compliance with taxation, provident fund, and other statutory obligations.

The comments/suggestions may be provided through the following modes:

1. Online Submission: Comments can be submitted through SEBI’s web-based public comments form: Click here to provide comments.
2. Email Submission: If facing technical issues, comments can be emailed with the subject “Public comments on Draft Circular – Digital Assurance in Financial Reporting” to consultationcfd@sebi.gov.in.

The Consultation paper is linked below, for your ease of reference.

Source: Securities and Exchange Board of India

Share this: