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NOTICES
Notice No.   20211029-41   Notice Date   29 Oct 2021
Category   Compliance   Segment   General
Subject   Submission of Internal Audit Report for half year ended September 30, 2021
Attachments   Annexure II.xls ; Annexure IV.doc ; Annexure III.docx ; Annexure-I.docx ;
Content

This is to inform that all Trading / Clearing members are required to carry out complete internal audit for the half year ended September 30, 2021 and submit the report electronically through the BEFS (BSE Electronic Filing System) member portal. The audit shall be conducted only by independent qualified Chartered Accountants or Company Secretaries or Cost and Management Accountants who are in practice and do not have any conflict of interest in or relation with the member other than the internal audit assignment.

 

The current half yearly internal audit is required to be carried out for the period from April 01, 2021 to September 30, 2021 and the same is required to be submitted on or before November 30, 2021 only in electronic form through BEFS. No documents are to be submitted in physical form.

 

To simplify the submission process and ensure uniform formats across Exchanges for respective segments, the format for Internal Audit Report submissions has been standardized in consultation with all Exchanges as communicated vide Exchange notice no. 20210809-54 dated August 09, 2021, and the uniform format applicable for half year ended September 30, 2021, has been enclosed with this notice. Pursuant to implementation of uniform format, auditors are advised to refer to Column ‘K’ of Annexure II for applicability of respective checklist item.

 

Further, Internal Auditors are advised to take note of below changes while carrying out the Audit:

 

  1. There are certain changes in the sampling criterion and methodology for sample selection compared to previous half year submission. Auditors are advised to refer Annexure III carefully before initiating the audit.
  1. For each “Not complied” observation, wherever applicable the auditor shall mandatorily provide the “no. of instances verified”, “% of instances where non-compliance is observed” and “Amount/value involved where non-compliance is observed” while submitting the Audit report.

Please find enclosed herewith the following Annexures applicable for the Inter Audit report for half year ended September 30, 2021

 

Ø  Internal Audit Certificate – Annexure I

Ø  Format for Internal Audit Report – Annexure II

Ø  Guidelines on Sample selection & other points to be noted – Annexure III

Ø  List of Indicative Processes & references of SEBI/Exchange circulars – Annexure IV

 

Further, Members are advised to adhere to the norms prescribed under clause 4.2 of SEBI circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016, w.r.t Appointment and Rotation of Internal auditors. Accordingly, members shall not appoint or re-appoint the internal auditor who has completed its term as specified under clause 4.2.1.2 (a) and 4.2.1.2 (b) of aforesaid circular.

 

As per Exchange notice no. 20191004-46 dated October 04, 2019, all Internal Audit Certificate shall mandatorily contain Unique Document Identification Number (UDIN).

 

The quality of internal audit reports received from members shall be monitored and appropriate steps shall be taken if the reports do not meet minimum expected quality levels. In case where internal audit report submitted is incomplete and not as per the guidelines like sample size not given, only certificate submitted without report or management comments not given etc., same would be treated as non-submission of internal audit report. Stock brokers are strictly advised to submit the report in the format prescribed by the Exchange.

 

Auditors are requested to mandatorily adhere to the sample selection guidelines specified therein (Annexure-III) and mention the sample size selected along with details of the instances of non-compliance (if any) against each of the checklist points. All working papers and records with respect to the audit should be retained by the auditors for verification by the Exchange as and when required.

 

The actions for late/non-submission of the Internal Audit report shall be applicable as per the Exchange notice no. 20180214-31 dated February 14, 2018.

 

Please be informed that a separate notice shall be issued shortly regarding availability of BEFS for submission of Internal Audit Report for half year ended September 30, 2021. Once BEFS is activated for submission, submission of Internal Audit Report shall be considered complete only after Member submits the report to the Exchange and receives an acknowledgment email. Saved reports/reports submitted by auditor will not be considered as submission.

 

In case of any queries/clarifications, you may reach us on the following contact details.

Purpose

Contact Nos.

Email ID

IAR Process related

2272 8435/5785

bse.reports@bseindia.com

IAR Technical queries

30594000

bsehelp@bseindia.com

IAR XBRL related issues

18002330445

bse.auditreport@bseindia.com

 

For and on behalf of BSE Ltd.  

 

 

 

Hiteshkumar Desai                                           Kiran Sawant

Addtnl. Gen. Manager                                     Asst. Gen. Manager

Brokers’ Supervision                                       Brokers’ Supervision