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DAAB (Digital Accounting and Assurance Board) constituted by ICAI to find a solution of all the issues arising regarding the valuation and internal audit in the digital world. So, the board came up with a proposal to issue some standard rules to codify the practices in the domain of forensics and investigation. The standard rules proposed are named as Forensic Accounting and Investigation Standard (FAIS).
In this article we will study all about Forensic Accounting and Investigation Standard (FAIS).
ICAI stands for Institute of Chartered Accountants of India. It is a statutory body set up under the Chartered Accountants Act, 1949[1] to regulate and monitor the CAs (Chartered Accountants) in India.
ICAI has always actively supported the government towards the better governance. ICAI constituted DAAB (Digital Accounting and Assurance Board) that promotes the policy of digital accounting and assurance. DAAB highlights the issues in accounting and assurance in the digital world. The issues included are valuation and internal audit.
DAAB issues a set of Forensic Accounting and Investigation Standard (FAIS) in the country to resolve the issues related to accounting and assurance in digital world.
The ICAI also realised that there is a need to standardize the rules, which will be helpful for the law enforcement agencies, banks, corporate, and other stakeholders to understand the common and standard practices for conducting forensic accounting and investigation standard.
Finally DAAB issued exposure drafts of Forensic Accounting and Investigation Standard (FAIS) and invited comments of public to finalise this.
With the rise in accounting, financial and loan variations, there was a need of Forensic Accounting and Investigation Standard in India to conduct their assignments in effective, qualitative and prudent ways. This will also help in collecting evidences which may be on scrutiny in a court of law.
The benefits of Forensic Accounting and Investigation Standard are:
The ICAI accepted the proposal of DAAB to develop and issue set of Forensic Accounting and Investigation Standards (FAIS) in India. This will result in standardizing the process across India.
The President of ICAI, CA Atul Kumar Gupta said that the Forensic Accounting and Investigation Standards (FAIS) is the result of ICAI in order to overcome the issues of accounting and assurance in the digital world. He also said that FAIS are being prepared and drafted by ICAI and will be helpful in the Forensic Accounting and Investigation profession.
The proposed objectives of set of Forensic Accounting and Investigation Standards (FAIS) are:
DAAB has issued a set of FAIS (Forensic Accounting and Investigation Standards).
Comments have been invited on the following drafts of FAIS (Forensic Accounting and Investigation Standards) by ICAI. The drafts are:
FAIS No.
TITLE
BASIC SCOPE
INTRODUCTION TO THE FAI STANDARDS
1
Preface to FAIS
Introduction, Overview and Process
2
Framework Governing FAIS
The FAIS Structure, components, elements
3
Basic Principles of FAI Services
Attribute and Performance Principles
100
STANDARDS ON KEY CONCEPTS (100 SERIES)
200
STANDARDS ON PRACTICE MANAGEMENT (200 SERIES)
300
STANDARDS ON THE EXECUTING ASSIGNMENTS (300 – 400 SERIES)
500
STANDARDS ON SPECIALISED AREAS (500 SERIES)
600
STANDARDS ON QUALITY CONTROL (700 SERIES)
700
DEFINITIONS AND TERMS
Each standard will have a 6- Para template. This is as follows:
There was no standard procedure for forensic accounting and investigation and thus results in issues related to accounting and assurance in the digital world.
Thus, the ICAI accepted the proposal of DAAB to develop and issue set of Forensic Accounting and Investigation Standards (FAIS) in India. This will result in standardizing the process across India.
Read our article:A Brief on Forensic Accounting and Investigation Standards
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