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UDIN – Everything a CA needs to know

UDIN or unique Document Identification Number is a 15-digits unique no. introduced and developed by Professional Development Committee of the Institute of Chartered Accountants of India which would be generated by the system for every document certified and attested by a practicing Chartered Accountant. UDIN system was implemented by ICAI on a re commendatory basis on 1st July 2018 but in view of the increasing instances of fraud and forgery involving the stamp and signature of Chartered Accountants, ICAI has made it mandatory for all the practicing Chartered Accountants with effect from 1st January 2019, to quote UDIN on all the certificates issued.

What you need to know

Hence, every CA in practice who would be certifying or attesting any document would have to sign up on the UDIN portal to register it and generate a UDIN. Especially, when the Chartered Accountants are supposed to certify that the Financial Information or related contents are true and fair, the use of UDIN is mandatory and the users or stakeholders can verify the same. This move was necessary to curb the malicious practices and also to bring more transparency into the system. 

UDIN once generated can be withdrawn or canceled anytime with narration. There is no restriction on the number of UDINs to be generated online by a CA. UDIN that have been generated would be displayed as watermarked on documents else the UDIN can be mentioned on the documents using a pen. The 15 digits of UDIN comprises of the Membership Number of the Member who is attesting the document or certificate, date when the certificate is issued and a document serial number that is allotted by the system.

UDIN can also be generated in the specific area of certificates like Goods & Service Tax Act, Companies Act, Income-tax Act, public finance and government accounting, etc. To register the certificate for generation of UDIN, the members have to compulsorily provide some important values, which are found in the attested document or certificate generated such as Turnover, Net profit, Import amount, Export amount, Input tax credit, Loan amount, Net loss, Total capital investment, etc. But all the details shall be provided very carefully as the data once submitted in the application cannot be modified by the members.

How to generate UDIN?

To generate a UDIN, the member needs to log in on the UDIN portal and enter the required details such as Document Issued, Document Description, Date of Document, Key Values etc. Now, enter the OTP received on the mobile and email id registered with the ICAI and click on “Preview” to check the details provided for generating the UDIN. Click on “Submit”. A UDIN will be generated and the member can use that UDIN on the document for which it has been generated.

UDIN will help the banks or third parties to check the authenticity of certificates or documents uploaded as these documents are relied upon and trusted by the end users and also to trace forged documents that are prepared or uploaded by any person other than Chartered Accountants.

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NFRA – National Financing Reporting Authorities and its Powers

National Financing Reporting Authority was approved by the Central Government this year to ensure better regulation in the financial audit of the large companies. NFRA is an independent regulator that supervises the auditing professions. Central Government took the decision to approve this regulatory authority post the report of Standing Committee on Finance in its 21st report.

In addition to that, the Cabinet has also approved various posts within the regulator. These posts would be of a Chairman, one secretary and three full-time members.

Reasons behind Creation

Although, the recommendation of NFRA came in few years back, there has been delay ever since in its creation.However, after the recent unearthed bank scams, specifically that of Rs 12, 636 crore Punjab National Bank fraud, the Government rushed to create the body. It was Institute of Chartered Accountants of India that exhibited their discontent with the creation of NFRA initially. However, the Government stated that the roles of ICAI and NFRA would not clash. Under NFRA, all listed companies and large unlisted companies would be covered. Small Unlisted companies would be covered by ICAI like before. Further, the Center might also refer some organizations for the investigation in case the need arises.

Also, the Quality Review Board would continue with its quality audit for the limited companies, public unlisted companies less than the prescribed threshold and also with respect to audit the companies that are delegated to QRB by NFRA. Also, ICAI would not be stripped of its advisory role in regard to accounting and auditing standards and policies by making its recommendations to NFRA.

New Rules Notified

Just recently, the new rules have been notified for NFRA under which the regulatory body would have the power to supervise and enforce compliance with accounting standards and auditing standards. Also NFRA has the power to monitor the quality of service and continue investigation of the auditors of listed entities, unlisted entities with paid up capital of minimum 500 crore or annual turnover of more than Rs1,000 crore. The authority also stretches to the companies who have aggregate loans,debentures or deposits of minimum Rs 500 crore as on March 31 of the previous financial year.

In addition, NFRA would also have the authority to supervise auditors of Banks, electricity firms, insurers and all corporate bodies as asked by the Centre. Other responsibilities include:

  • Maintaining the details of Auditors appointed by the Companies
  • Suggest Accounting and Auditing Standards for the approval of the Central Government
  • Supervise and implement the compliance with accounting standards and auditing standards
  • Keep check on Quality of Service provided by the professionals and professions.
  • Work in tandem with the National and International Organizations of Independent audit regulators. This would help to ensure and supervise the compliance to accounting standards and auditing standards.
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