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INTERNAL AUDIT OF CREDIT RATING AGENCY

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An internal audit should be undertaken on a half – yearly basis which is envisaged under Regulation 22 of the SEBI (Credit Rating) Regulations, 1999 by:

(a) Company Secretaries;
(b) Chartered Accountants;
(c) Cost and Management Accountants. 

The time schedule for the internal audit shall be as under:

(a) The CRA shall receive the report of the internal audit within 2 months from the end of the half – year.

(b) Board of Directors of the CRA shall consider the report and take steps to rectify the deficiencies, if any and an Action Taken Report should be sent to SEBI within next 2 months. 

The internal audit covers all aspects of Credit Rating Agencies relating to operations and procedures, including investor grievance Redressal mechanism etc. The report will have to state the methodology adopted, deficiencies observed and consideration of response of the management on the deficiencies. 

Apart from the summary of operations and this audit also covers the size of operations, number of transactions audited and the number of instances where deviations/violations were observed during audit period, will also have to be stated.

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