Explanatory Memorandum on Applicability of Audit Quality Maturity Model – Version 1.0 (AQMM v1.0)
The Audit Quality Maturity Model -Version 1.0 (AQMM v1.0) is a capacity building measure initiated by ICAI and the objective of this Evaluation Matrix is for sole proprietors and Audit firms to be able to self-evaluate their current level of Audit Maturity, identify areas where competencies are good or lacking and then develop a road map for upgrading to a higher level of maturity.
In the Council meeting held on January 9, 2021 it was decided that the both the Peer Review Board and the Centre for Audit Quality (CAQ) would need to develop the ecosystem which is acceptable to both and such collaborative approach would have the advantage of the CAQ developing the quality standards and Peer Review Board testing the said standards.
Using the above-mentioned collaborative approach, the AQMM v1.0 would be recommendatory initially and after 1 year the Council will review the date from which it would become mandatory.
Firms auditing following entities are covered in AQMM v1.0:
(a) A listed entity; or
(b) Banks other than co-operative banks (except multi-state co-operative banks); or
(c) Insurance Companies
However, firms doing only branch audits are not covered.
The AQMM v.1.0 status should however not be publicized or mentioned by sole proprietors and Audit firms on the public domain e.g. on professional documents, visiting cards, letterheads, or signboards, etc. as it may amount to solicitation in view of the provisions of Chartered Accountants Act, 1949. It should not be disclosed even on a website. It may, however, be made available to anyone on the specific pull basis i.e. where he wishes to see the said status, it may be provided to him.
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