Ind AS Audit Complete Guide for CA Firms: Standards, Procedures, and Automation [2026]
Indian Accounting Standards (Ind AS) are mandatory for a significant and growing segment of Indian companies:
- All listed companies on BSE/NSE
- Unlisted companies with net worth > ₹500 crore
- Unlisted companies with turnover > ₹250 crore
- Subsidiaries, associates, and joint ventures of any of the above
For CA firms auditing these entities, Ind AS brings materially different audit procedures from IGAAP. Revenue recognition requires testing the five-step model. Lease accounting requires identifying right-of-use assets and verifying lease liability calculations. Related party disclosures require independent identification and arm's length verification.
Tools built only for IGAAP (WeAudit, AssureAI) cannot serve Ind AS audit engagements. This guide covers what Ind AS audit requires and links to detailed procedure guides for each standard.
Which Companies Must Follow Ind AS?
Phase I (April 1, 2016): Listed companies and unlisted companies with net worth ≥ ₹500 crore.
Phase II (April 1, 2017): Unlisted companies with net worth ≥ ₹250 crore; companies listed/to be listed on SME exchanges.
Subsidiaries, Associates, JVs: Phase I/II companies must prepare consolidated Ind AS statements including all subsidiaries, associates, and joint ventures — even if those entities would not individually qualify.
NBFCs: Separate phase-in; most regulated NBFCs with net worth ≥ ₹500 crore are now on Ind AS.
Insurance and Banking: Separate regulatory frameworks but converging toward Ind AS.
If any of your clients fall in any of these categories, your audit must use Ind AS procedures.
The Key Ind AS Standards for Statutory Auditors
Ind AS 115 — Revenue Recognition
Why it matters: Ind AS 115 replaced AS 9 with a comprehensive five-step model. Revenue recognition is no longer based on when risk and reward transfers or when invoiced — it is based on performance obligation satisfaction.
The five-step model:
- Identify the contract with a customer
- Identify performance obligations in the contract
- Determine the transaction price
- Allocate the transaction price to performance obligations
- Recognise revenue when (or as) each performance obligation is satisfied
Audit risk: Companies may recognise revenue too early (before performance obligation satisfied), too late (conservative approach to avoid tax), or incorrectly (mixing up time-based and output-based recognition).
Resources:
- Revenue Recognition Audit (Ind AS 115): Complete Testing Framework [2026]
- IndAS 115 Revenue Recognition Audit Guide: Step-by-Step for CA Firms
Ind AS 116 — Leases
Why it matters: Ind AS 116 eliminated the operating lease vs finance lease distinction for lessees. All leases (with minor exceptions for short-term leases and low-value assets) must now be recognised on the balance sheet as:
- Right-of-Use (ROU) asset: The lessee's right to use the underlying asset
- Lease liability: The obligation to make lease payments
This is a significant balance sheet change for companies with large lease portfolios (retail chains, airlines, companies with many branch offices).
Audit risk: Leases not identified (applying practical expedients incorrectly), lease liabilities calculated with wrong discount rate, ROU amortisation using wrong useful life, lease modifications not properly accounted.
Resources:
- Lease Accounting Audit (Ind AS 116): Testing & Verification Procedures [2026]
- Lease Testing FAQs: Ind AS 116 Audit Procedures
- Lease Testing Checklist: Ind AS 116 Audit Procedures
Ind AS 24 — Related Party Disclosures
Why it matters: Ind AS 24 requires comprehensive disclosure of all related party relationships and transactions. Related parties include:
- Key Management Personnel (KMP) and their close family members
- Entities controlled by KMP or their families
- Post-employment benefit plans
- Entities over which the reporting entity exercises significant influence
- Group entities (subsidiaries, associates, JVs)
Audit risk: Undisclosed related parties (management fails to identify or disclose all relationships), transactions not at arm's length, incorrect disclosure of amounts or nature of transactions.
The independent identification requirement: Auditors should not simply rely on management's declaration of related parties. NFRA has cited this as a finding. Independent identification means using MCA filings, shareholder registers, director cross-references, and transaction pattern analysis.
Resources:
- Related Party Transaction Procedures: AI + Manual Verification [2026]
- Related Party Transactions FAQs: Ind AS 24 Procedures
- Related Party Verification Checklist: Ind AS 24 Audit Procedures
Ind AS 36 — Impairment of Assets
Why it matters: Ind AS 36 requires annual impairment testing for goodwill and intangible assets with indefinite useful lives, and indicator-based testing for other assets. Impairment testing requires:
- Identifying cash-generating units (CGUs)
- Determining recoverable amount (higher of fair value less costs to sell and value in use)
- Comparing carrying amount to recoverable amount
Audit risk: Management's impairment models may use overly optimistic assumptions. CGU identification may be inappropriate. Discount rates may be understated.
Ind AS 109 — Financial Instruments
Why it matters: Ind AS 109 introduces Expected Credit Loss (ECL) provisioning — replacing the incurred loss model with a forward-looking model based on probability of default, loss given default, and exposure at default.
Particularly relevant for: NBFCs, banks, companies with significant receivables or financial assets.
Audit risk: ECL model assumptions not supported by historical data, staging of financial assets incorrect, hedging documentation incomplete.
Ind AS vs IGAAP: Key Differences for Audit Procedures
| Area | IGAAP Audit | Ind AS Audit |
|---|---|---|
| Revenue | Check risk/reward transfer | Test five-step model |
| Leases | Classify finance vs operating | Identify all leases; test ROU/liability |
| Related parties | Verify management's list | Independent identification required |
| Provisions | Probable and measurable | Present obligation + reliable estimate |
| Financial instruments | Cost or market (AS 30/32) | Fair value or amortised cost (ECL) |
| Presentation | Schedule III (IGAAP) | Schedule III (Ind AS) |
Tools That Support Ind AS Audit
The critical constraint for firms entering Ind AS audit territory:
Tools that support Ind AS audit:
- Coraa — Ind AS 116, 24, and 115 specific procedures built in
Tools that do not support Ind AS audit:
- WeAudit — IGAAP only (confirmed)
- AssureAI — IGAAP only (confirmed in their FAQ: "presently, only IGAAP Financial Statements can be generated")
For CA firms with mixed practices (some IGAAP, some Ind AS clients), using two different tools is inefficient. A platform that handles both allows the firm to scale without tool migration.
The Audit Documentation Standard for Ind AS Audits
Ind AS audits are typically of larger entities under greater regulatory scrutiny. The documentation standard is higher:
- Every significant judgment must be documented
- KAMs (Key Audit Matters) require disclosure in the audit report
- NFRA oversight is more active for listed company audits
- EQCM review is required for significant engagements under SQM1
Automated documentation — generated from testing outputs rather than manually typed — helps meet this standard consistently.
Related Resources
- Audit Automation for Listed Companies in India: Ind AS, SEBI, and NFRA Requirements [2026]
- CORAA vs AssureAI: Which Audit Automation Tool Should Indian CAs Choose? [2026]
- Why Coraa Uses Deterministic AI — And Why That Matters for Statutory Audit
- SQM1 & EQCM Complete Guide for Indian CA Firms [2026]
About Coraa
Coraa is the only India-built audit platform with Ind AS procedures — Ind AS 116 lease testing (ROU calculation, liability verification), Ind AS 24 related party identification and arm's length testing, and Ind AS 115 revenue recognition procedures. Combined with full-population transactional scrutiny, GST/TDS reconciliations, and auto-generated NFRA-defensible working papers.
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