Talk to an expert

Tell us what you need and we will call you back the same day.

🇮🇳 +91
    100% Secure No Spam Quick Response

    CA CertificationGuide

    ICAI Guidelines for CA Certificates

    When a practising chartered accountant signs a certificate for a bank, a regulator, a consulate or a court, the main ICAI guidance behind that signature is the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016). Around it sit the UDIN mandate, the Institute's Code of Ethics, the rules on keeping the working file, and peer review. This guide explains what each one asks of the member and what it means for the person relying on the certificate.

    Written by Subham JhunjhunwalaReviewed by CA Sundram Gupta
    • First published
    • Updated
    • Last reviewed

    What sits behind a signature

    Five things the member works to, and what each means for the person relying on the certificate.

    1. The Guidance Note (Revised 2016)Reports or certificates for a specific user, such as a lender, a regulator or a consulate.
    2. The UDIN mandateOne number per document, so the paper can be traced back to the member who signed it.
    3. The Code of EthicsA member should not certify where their independence is, or would appear to be, compromised.
    4. The working fileThe evidence examined, the representations obtained and the reasoning behind any valuation basis.
    5. Peer reviewWhether a practice's procedures actually produce the quality its certificates claim.
    For the reader. A certificate that says exactly what the evidence supports, and what it rests on, is the one that holds up when it is checked.
    What each one asks of the member.Start reading
    A chartered accountant's seal and ink pad on the desk while the CA reviews a file behind

    A certificate is not the same thing as a report

    The first distinction the guidance draws is between a report and a certificate.

    A reportCarries the member's opinionWith whatever qualifications that opinion needs.
    A certificateStates a fact the member has verified against recordsAnd usually leaves less room for qualification.

    That is why a certificate's wording is short, and why a member is careful about exactly what it covers and what it does not.

    The ICAI document that governs this work Guidance Note on Reports or Certificates for Special Purposes (Revised 2016)
    Applies whenA member reports or certifies something for a specific userSuch as a lender, a regulator or a consulate, rather than auditing a full set of financial statements.
    CoversThe work expected before signingAnd what the document should disclose about its own basis.
    Searching for an ICAI guidance note on net worth certificates?

    No separate ICAI guidance written only for net worth certificates has been found. A net worth certificate is one kind of special-purpose certificate, and it follows the same Guidance Note.

    The assurance the member is actually giving

    Every certificate gives the reader some level of assurance, and the Guidance Note expects the member to be clear about which.

    Enough has been examined to state the fact positivelyThe work is a reasonable assurance engagement
    The evidence supports only a narrower statementThe wording has to say less

    The practical result is that the certificate is limited to what the evidence supports. If the records support only part of what has been asked for, the certificate covers that part and no more.

    This is also why members decline work more often than clients expect

    A request to certify a figure the records do not carry is a request for assurance nobody can give. The professional answer is to fix the records first.

    UDIN, and why every certificate carries one

    A Unique Document Identification Number (UDIN) is the number a practising member generates on the ICAI portal for one document, so anyone holding the paper can trace it back to the member who signed it.

    The ICAI made UDIN mandatory in three steps:

    1. 1 February 2019CertificatesSigned by practising members.
    2. 1 April 2019GST and income-tax audit reportsThe second step.
    3. 1 July 2019All other audit and assurance workThe third step.
    When the member may generate the number
    15 daysthe earlier limit
    Up to 60 daysfrom the date of signing, at the time of signing or later. The ICAI Council extended that window from 15 days to 60 days in September 2021.
    For the reader, the number is the starting point of any check

    A bank or consulate holding a certificate can search the number on the ICAI's UDIN portal and see whether it resolves to the member and firm named on the paper. That makes a forged certificate harder to pass, and it is the first thing a careful recipient checks, before reading a single figure.

    Independence: who a member may not certify

    A practising member works under a certificate of practice issued by the Institute and is bound by the ICAI Code of Ethics.

    The principle that matters here is objectivity

    A member should not certify where their independence is, or would reasonably appear to be, compromised.

    Wording, recipient formats and what cannot be signed

    Banks, consulates and authorities often supply their own format. A member may complete a recipient's format, but not at the cost of certifying something untrue.

    Where a supplied format asks for a statement the evidence does not support, the member changes the wording or attaches a note setting out the actual basis, rather than signing it as printed. The commonest examples:

    1. A format asking the member to certifyThe futureSuch as a promise that a position will be maintained. A certificate speaks to a position on a date; it cannot vouch for what has not happened.
    2. A format asking forA figure the records do not carrySuch as a market value nobody has assessed.
    3. A format asking the member to confirmA fact outside what was examinedThe certificate covers what was examined and no more.

    Every certificate should also state its own scope:

    ScopeWhat was examined
    BasisThe basis of any valuation
    DateThe date the position relates to

    A certificate that leaves out its basis is weaker for the client, because the reader cannot tell what it rests on.

    The file behind the signature

    Behind every certificate sits a working file:

    The evidence examinedThe records behind each figure.
    The representations the member obtainedFrom the client, in writing.
    The reasoning behind any valuation basisWhy that basis, and not another.

    The ICAI expects that file to be kept for a set period after the certificate is issued.

    The file is what makes a certificate defensible when it is questioned long after it was issued

    Which is common in lending and litigation. A member who cannot produce the file is in a much weaker position than one who can, whether or not the original figure was right.

    Peer review, and why it reaches certification work

    Peer review is the Institute's system for examining whether a practice's procedures actually produce the quality its reports and certificates claim. It looks at documentation, not just at conclusions.

    For certification work the reviewer's question is simple and awkward For this certificate, what evidence was on file, and does it support what was signed?
    That is why the discipline described above is more than good practice

    A firm issuing certificates without a traceable file will not fail because one figure was wrong. It will fail because nobody can show how the figure was reached. The certificate and the file behind it are treated as one thing.

    For someone choosing who signs, this is the practical point of asking whether a firm has been peer reviewed.

    It says nothing aboutAny single certificate
    It says a good deal aboutWhether the firm keeps the records that make its certificates hold up later

    What happens when a certificate is challenged

    Challenges usually come from one of three directions:

    1. A lenderRe-examining a file after a default.
    2. An opposing partyIn litigation.
    3. A regulatorReviewing an application.

    In each case the certificate is read alongside something else, and the question is whether the two agree.

    The member's position then rests on what was documented at the time.

    A valuation basis named on the face of the certificateIs defensibleEven if another valuer would reach a different figure, because the reader was told what they were being given.
    An unnamed basisIs not defensibleBecause there is nothing to measure the challenge against.

    Where someone believes a member has certified something false or acted improperly, the route is a complaint to the Institute, which examines the member's conduct through its own disciplinary process. The outcome depends on that process and on the facts; this guide does not predict it.

    This is the concrete reason certificates are written narrowly. A member who certifies exactly what the evidence supports, and says what it rests on, is in a sound position when the document is tested. Wider wording buys the client nothing and costs the member the ability to defend it. Clients who need a certificate that will stand up to that test are looking for certificates issued by practising chartered accountants who work to these rules.

    Before the certificate is signed

    Need a certificate that will hold up when it is checked? Talk to a CA about what the recipient has asked for and what the records can support.

    Call +91 945 945 6700, Monday to Saturday, 9 AM to 6 PM.

    Read next

    Where to go from here

    How a chartered accountant actually prepares a net worth certificate under these rules, which net worth figures are actually prescribed, and the same certificate read by a bank issuing a guarantee.

    Sources

    Where the rules are published

    1. ICAI, Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) (section 1).
    2. ICAI, UDIN mandatory dates (section 3).
    3. ICAI, time limit for generating UDIN aligned from 15 days to 60 days (section 3).

    This guide describes what each rule asks of the member; it does not offer a certificate format.

    Ask a Chartered Accountant

    Talk to a Chartered Accountant

    Have a question about your own certificate? Tell us who asked for it and what it is for, and a Chartered Accountant from our team will call you back.

    Request a call back

    A chartered accountant calls you back.

    🇮🇳 +91

      Our team will get back to you shortly. No spam.

      100% Secure No Spam Quick Response