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For over a decade, India’s Global Capability Centres (GCCs) operated with a clearly defined value proposition: cheaper, faster, scalable. They were the engines of efficiency, delivering back-office support, technology services, and operational scale at a fraction of global costs. But that narrative has run its course. Today, India stands at a defining moment in the evolution of GCCs. Declared the GCC Capital of the World by NASSCOM in 2024, the country is no longer just an outsourcing destination - it is a strategic nerve center for global enterprises. As we move deeper into this decade, it is increasingly clear that this is India’s decade to lead the GCC transformation globally. The numbers tell a compelling story. India’s GCC market, currently valued at $82.1 billion, is projected to grow to $100–110 billion by 2030. This growth reflects more than scale—it signals a shift in perception. India has decisively transitioned from being a low-cost destination to becoming the world’s preferred hub for high-value digital, engineering, and research work. Yet, despite this progress, one fundamental truth remains: Relevance is no longer driven by cost—it is earned by creating value. The Resource Provider Trap Many organizations still fall into what can be termed the “resource provider trap”—where success is measured by headcount, utilization, and cost arbitrage rather than business outcomes. This approach is increasingly fragile. It leaves organizations exposed to automation, macroeconomic uncertainties, and the growing risk of commoditization. Even more concerning is the disconnect between perception and reality. While over 90% of GCC leaders acknowledge their expanded strategic role, performance metrics in many organizations continue to revolve around full-time equivalents (FTEs) rather than measurable impact. This gap is no longer just an operational inefficiency—it represents a strategic vulnerability. At the same time, global disruptions have highlighted another critical capability: agility and resilience. GCCs have emerged as vital anchors of business continuity. During COVID-19, India-based teams rapidly adapted to remote work models, ensuring uninterrupted operations. More broadly, in scenarios of geopolitical instability or regional disruption at headquarters, GCCs provide a distributed execution model that enables business continuity. In essence, GCCs are no longer just delivery arms—they are risk mitigators and continuity enablers. India’s Moment: Scale Meets Strategic Value India’s GCC ecosystem is not only expanding—it is deepening in capability and influence. The country today hosts over 2,100 GCCs operating across more than 3,700 units, with approximately 506 Forbes Global 2000 companies maintaining a presence in India. This reflects an unparalleled level of global enterprise integration. The growth trajectory remains strong, with projections indicating an 8.3% CAGR between 2025 and 2035. Importantly, expansion is no longer limited to metropolitan hubs. The rise of Tier II cities is reshaping the landscape. Private equity firms are playing a pivotal role in this shift, driven by a combination of supportive government policies, robust digital infrastructure, lower setup costs, and a growing preference among talent to avoid high-cost urban centers. Simultaneously, global corporations are making bold bets on India’s future. Microsoft’s planned $17.5 billion investment between 2026 and 2029 to expand cloud and AI infrastructure, along with Amazon’s $35 billion commitment by 2030, underscores the strategic importance of India in shaping the next wave of technology and innovation. The signal is unmistakable: India is no longer a participant in the global GCC ecosystem—it is leading it. The New Value Playbook The transformation of GCCs from cost centers to value creators is already underway, and investment patterns reveal this shift. Organizations are increasingly channeling resources into technology transformation (25%) and capability development (23%). Leading GCCs are distinguishing themselves through three key shifts: Owning Outcomes, Not Just Activities The traditional model of execution is giving way to ownership. GCCs are no longer evaluated on the volume of work delivered, but on the business outcomes they influence—whether in engineering innovation, financial optimization, or operational excellence. Turning AI into a Competitive Advantage The rapid adoption of generative AI is accelerating this transformation. Forward-looking GCCs are embedding AI into core business processes—not merely to improve efficiency, but to drive innovation and create differentiated value. Anchoring to Enterprise Strategy Alignment with global headquarters is no longer optional. The most successful GCCs operate as integrated extensions of enterprise strategy, playing a direct role in shaping decision-making and enabling growth. These shifts are redefining GCCs as enterprise nerve centers, rather than support functions. Leadership Transformation: From Managers to Micro-CEOs Perhaps the most significant evolution is happening at the leadership level. The role of GCC leaders is expanding beyond operational management into strategic influence. While they may not always hold final decision-making authority, they increasingly shape critical enterprise outcomes. Influence, therefore, is emerging as a key currency. This shift demands a new leadership mindset—one where GCC heads operate as “micro-CEOs”, balancing execution excellence with strategic vision, stakeholder alignment, and value creation. The Real Shift India’s GCC journey has progressed through multiple phases—from cost efficiency to scale, from scale to co-creation. Today, it is entering its most critical phase yet: value leadership. However, there is an important caveat. If organizations continue to anchor their GCC strategy solely in cost savings and talent availability, they risk relegating these centers to processing units rather than strategic enablers. The opportunity is far greater. GCCs have the potential to evolve into innovation engines, decision hubs, and growth catalysts—but only if organizations fully embrace the shift from cost-centric thinking to value-driven execution. Conclusion This transformation is not merely a shift in geography—it is a shift in identity. From resources to revenue drivers, From execution to influence, From support functions to strategic partners. India is not just keeping pace with this shift—it is setting the direction. As the GCC ecosystem continues to evolve, one thing is clear: The future will not belong to the most cost-efficient centers—it will belong to the most value-driven ones. Author - Sanchit Gupta (Partner - COO & Assurance Leader)

The latest edition of ESG Perspective explores how the global sustainability agenda is increasingly moving from policy ambition to implementation and accountability. Across jurisdictions, regulators, standard setters, and market participants are introducing frameworks that translate climate and sustainability commitments into measurable action. This edition covers key developments across climate and energy policy, carbon markets, ESG disclosure frameworks, circular economy regulations, water governance, and biodiversity conservation, providing businesses with insights into the regulatory and market shifts shaping the next phase of sustainability. Key insights include: Climate policy developments across the EU, Germany, the UK, and New York, reflecting efforts to balance environmental objectives with economic and implementation realities. Continued evolution of carbon markets through new crediting methodologies, accounting standards, compensation mechanisms, and international capacity-building initiatives. A growing shift from ESG target-setting to implementation, highlighted by new sustainability certification programmes and evolving corporate climate strategies. Strengthened circular economy and waste management frameworks, including extended producer responsibility requirements, digital waste tracking systems, and simplified compliance obligations. Enhanced focus on water resilience and biodiversity protection through updated pollutant monitoring standards, streamlined permitting guidance, and species conservation initiatives. This edition also features Pierag Perspective by Dipesh Khushalani, Director – Technology Risk Advisory, who explores the growing intersection of ESG and technology governance, highlighting the risks of "cyber washing" and the importance of robust systems, controls, and data integrity in building credible sustainability reporting.

CBAM: Europe’s Carbon Price at the Border The European Union’s Carbon Border Adjustment Mechanism (CBAM) is no longer a distant policy experiment. From 1 January 2026, it became a binding financial obligation for exporters of carbon‑intensive products such as iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity. The EU’s goal is simple but ambitious: prevent carbon leakage, where companies shift production to countries with weaker climate rules, undermining global climate progress. This mechanism is not just about Europe. The EU is the world’s largest single market, and by attaching a carbon price to imports, it is effectively exporting its climate standards worldwide. Any exporter who wants access to Europe must either prove low‑carbon production or pay the difference. The First Price Signal On 7 April 2026, the European Commission published the first official CBAM certificate price: €75.36 per tonne of CO₂ equivalent Uniform across all sectors Based on the average EU ETS auction clearing prices for Q1 2026 This number is only the starting point. What matters more is the carbon intensity of each product. Steel, for example, is far more carbon‑intensive than aluminium, meaning the same certificate price translates into vastly different burdens. India’s Early Exposure  The impact is already visible even before financial obligations began. During the reporting phase alone: Steel and aluminium exports to the EU fell 24.4% from $7.71 billion in FY24 to $5.82 billion in FY25. Iron and steel exports also saw a sharp contraction during the reporting phase, reflecting the compliance burden and uncertainty faced by EU buyers. This contraction reflects the compliance burden of reporting requirements and the uncertainty EU buyers face when suppliers cannot provide verified emissions data. The financial phase will only amplify this pressure.  The Preparedness Gap  Most Indian manufacturers understand CBAM in theory. Far fewer are prepared in practice. True preparedness requires: Verified plant‑level emissions data aligned with EU standards. GHG accounting systems that meet EU methodology, often requiring 40 to 80 staff hours annually. Without verified data, exporters are forced to rely on EU default values. These are deliberately conservative, often higher than actual emissions, designed to push companies toward verification. Relying on them is not neutral; it inflates costs, weakens negotiations, and erodes competitiveness.  The Investment Reality One misconception needs to be addressed: international carbon credits, offsets, or green certificates do not reduce CBAM liability. The mechanism only recognizes documented reductions at source or domestic carbon pricing formally accepted by the EU. That leaves exporters with two options: Decarbonisation at source: requiring significant capital investment. Absorbing the cost: which erodes already thin margins in price‑sensitive markets. Neither path is easy, but waiting is not an option.  The Expanding Scope  CBAM is not stopping at bulk industrial sectors. From January 2028, the EU plans to extend coverage to nearly 180 additional products, including: Fabricated metal products Auto components Machinery parts Plastics and polymers Chemicals For downstream manufacturers, this is not “someone else’s problem.” It is a ticking clock.  The Signal, Not the Endpoint  CBAM is more than a compliance mechanism. It is a signal that carbon intensity is now a trade variable. Key milestones ahead include: Q2 price publication: July 2026 First declaration deadline: September 2027 Scope expansion: January 2028 The companies that act today by building data infrastructure, verifying emissions, and modelling carbon costs will manage this transition on their own terms. Those that wait will be managed by it. Author - Anshit Dhawan (Senior)

Compliance management today requires visibility and proactive planning. With numerous regulatory deadlines across Income Tax, GST, FEMA, MCA, SEZ, and STPI, staying organized is essential for businesses to operate smoothly. We have put together the Compliance Calendar for FY 2026–27, designed to help organizations track key due dates and integrate reminders directly into Outlook calendars for better compliance management. Sharing this resource with the hope that it helps teams stay ahead of deadlines and focused on what matters most, building resilient and responsible businesses.

The Shift from Mitigation to Adaptation In the last decade, the main concern of corporate climate strategies has been the reduction of greenhouse emissions and the achievement of the target of net-zero emissions. Although the prevention of global warming is the key, the increasing effects of climate change have made climate adaptation an important concern. The severe weather changes, increase in temperature, water scarcity, and sea level rise are now being witnessed globally, which are negatively affecting supply chains, infrastructure, and commercial operations globally. Businesses are realizing that cutting carbon emission reduction is not enough. In spite of all the mitigation efforts, there are some unavoidable effects of climate change, and enterprises need to start preparing for the new risks. Climate adaptation is shifting from a niche sustainability issue to a critical part of an enterprise’s overall ESG strategy. This shift is illustrated by the financial investment required to address the issue of climate resilience. The Adaptation Gap Report 2024 by the United Nations Environment Programme indicated that developing countries will require between $215 billion and $387 billion annually starting from 2030 to address the issue of climate change. The financial impact of the issue is already apparent. In 2024, the financial losses due to natural disasters across the globe are estimated at $320 billion. Therefore, the financial impact of the issue is already apparent. In this case, adapting to the issue of climate change is no longer only a matter of environmental protection but is becoming a matter of strategic business, as companies must now consider the financial implications of climate-related disruptions on their operations and long-term viability. Understanding Physical Climate Risks for Businesses Physical climate risks, as the name suggests, refer to the direct impacts of climate change on assets, operations, and supply chains. These risks are generally categorized as acute and chronic. Extreme weather events, floods, hurricanes, wildfires, and heatwaves are examples of acute risks that can cause problems with operations. On the other hand, chronic risks involve longer-term climate shifts and may include changes in sea levels, droughts, and increased temperatures. With the rising cases of weather-related disasters, the importance of adaptation to these changes cannot be overemphasized. From 1985 to 2025, losses of around US $7.2 trillion are observed from natural disasters. This, therefore, highlights the rising risk to businesses as a result of these changes. These dangers are not exclusive to any certain industry. Manufacturing facilities situated in flood-prone regions may be compelled to cease operations, while agricultural endeavors may see diminished productivity as a result of climatic alterations. These alterations may be experienced across multiple sectors, including energy and retail. Financial institutions and investors are progressively evaluating physical climate concerns. Financial institutions, including lenders and insurance providers, are evaluating companies' vulnerability to climate-related risks. This has compelled businesses to incorporate risk analysis into their strategy planning. Why Climate Adaptation Is Becoming a Business Priority The importance of putting more emphasis on climate adaptation in corporate ESG agendas has been heightened by multiple factors, including the growing frequency and severity of climate-related disasters and ongoing real-world financial consequences for businesses such as supply chain disruptions, damage to physical infrastructure, and operational delays. There is also greater expectation from regulators and global frameworks regarding the disclosure of climate risk. The Task Force on Climate-related Financial Disclosures suggests that companies should identify both transitional and physical risks and disclose how their strategies will remain resilient to the risks they may face based on the different climate scenarios. There is increasing demand for more transparency from investors about how businesses will manage long-term climate risk. Climate resilience is being viewed by institutional investors as an important indicator of a company’s financial stability. Companies unprepared for the effects of climate may experience more expensive insurance coverage, decreased asset valuation, and/or limited access to funding sources. The case for the economics of adaptation is beginning to come into view as well. As a 2024 analysis by the Boston Consulting Group revealed, there was more than $1 trillion of worldwide climate damage between 2020 and 2024, and so the financial impact of extreme weather events is rising. As a result, climate adaptation is being seen as the new frontier for ESG leadership. Climate-Resilient Business Strategies To address physical climate risks, proactive approaches to adapting to the situation have to be developed. Organizations have to conduct exhaustive assessments of the risks that might be caused by the climatic conditions. In this case, the impact that the climatic conditions might have on the business is analyzed. This is where the use of scenario analysis is important. Another key aspect that has to be addressed is the issue of infrastructure. In this case, the business might have to invest in the construction of facilities that are able to protect the business from the effects of extreme climatic conditions. In this case, the business might have to invest in the construction of facilities that protect the business from floods. In addition, the business might have to invest in the installation of technologies that help to conserve water. In this case, the business might have to invest in the installation of air conditioning units. However, corporate preparedness remains low despite acknowledging the risks that may be caused by climatic conditions. Research done on more than 1,000 publicly listed firms revealed that only 23% of these firms have put in place mechanisms to address this problem. Therefore, investments in infrastructure that is resistant to climate change, sustainable water management, and natural solutions can help to mitigate risks to operation in the long term as well as environmental objectives. This may require collaboration with other actors because risks are often beyond an organization. Governance and ESG Integration Effective climate adaptation practices require robust climate adaptation governance practices and oversight by the board of directors. Climate risk management is an essential part of enterprise risk management practices, ensuring that adaptation practices are consistent with overall corporate governance practices. The board plays an essential part in overseeing the assessment of climate risks, developing resilience goals, and monitoring progress. The transparent communication of risks and adaptation techniques is becoming increasingly expected by various stakeholders and regulatory bodies in firms. The importance of ESG reporting frameworks in prioritizing resilience in overall sustainability reporting is becoming prominent. The transparent communication of adaptation techniques by firms is likely to increase investor trust and readiness for the long-term effects of climate change. Next Step: Climate Resilience in Corporate Strategy As much as the climate risks are rising, adaptation is turning out to be a key component of the sustainability strategy for many firms. Companies that focus only on cutting down emissions and ignore the physical climate dangers may face a shock that threatens their sustainability. According to the World Meteorological Organization, the period between 2015 and 2024 has been the warmest decade on record. This implies that extreme weather occurrences and climate upsets might worsen in the coming future. As a way of countering the effects of climate change, many organizations are going a step further than their net-zero targets and attempting to make their operations more climate-resilient. Companies can better prepare for environmental shocks and keep their operations going by including climate adaptation in their governance structures, risk management frameworks, and investment decisions. In this context, it can be said that the question is no longer whether businesses should prepare for climate impacts but how effectively they can adapt. Companies that treat climate resilience as a strategic priority will be better positioned to navigate climate uncertainty while creating sustainable long-term value. Author - Ayushika Saraswat (Consultant)

The risks that organizations once monitored from a distance are now actively reshaping business models, capital decisions, and strategic priorities. Below are the five risks that every leader should focus on: 1. Cybersecurity – Cyber incidents are no longer just an IT problem. They disrupt operations, delay customer interactions, and attract regulatory scrutiny. 2. Digital Disruption & AI – AI adoption is accelerating faster than governance frameworks can keep up. The question is no longer whether to adopt, it's who is accountable when things go wrong. 3. Business Resilience – Resilience today isn't about recovering after a disruption. It's about sustaining performance while disruption is still underway. 4. Geopolitical Uncertainty – Trade disputes, policy shifts, and regulatory changes are happening without warning. Organizations must embed these into strategic planning, not treat them as external noise. 5. Human Capital – 40% of organizations worldwide identify talent as a key risk. Having a strategy means little without the people ready to execute it. What makes these risks truly complex is how deeply interconnected they are. A cyber incident amplifies operational fragility. Geopolitical shifts strain already-stretched supply chains. Talent gaps slow down an organization's ability to respond to any of it. In this environment, Internal Audit is shifting from process reviewer to risk interpreter. Download & Read our full Point of View below.

ESG Perspective – March 2026 Edition presents a curated overview of key global developments shaping the evolving ESG and sustainability landscape. The edition highlights important regulatory updates, emerging global standards, and market trends across areas such as carbon markets, sustainability reporting and disclosure frameworks, climate policy, circular economy regulations, and sustainable finance. As governments, regulators, and investors continue to strengthen expectations around transparency, accountability, and climate action, businesses are increasingly required to navigate a complex and rapidly evolving ESG environment. This edition distills significant policy announcements, regulatory reforms, and standard-setting initiatives from across jurisdictions into clear, decision-relevant insights. By bringing together these developments in one place, the report aims to help organizations stay informed, anticipate regulatory shifts, and better prepare for the transition toward more sustainable and responsible business practices. Read the full edition for a deeper look at the latest global ESG developments and regulatory insights.

Standard Setters’ Updates – H2 2025 This edition provides a concise and practical overview of the most significant accounting, regulatory, and sustainability reporting developments from the second half of 2025, helping organizations prepare for upcoming changes in 2026 and beyond. Key Highlights: Major Accounting Standards Updates (ASUs) issued in H2 2025, covering credit losses, internal-use software, derivatives and hedging, purchased loans, government grants, interim reporting, and codification improvements. Simplification and consistency initiatives by FASB, aimed at reducing complexity, improving comparability, and better aligning accounting outcomes with economic substance. Snapshot of FASB current projects, including debt exchanges, environmental credit programs, crypto asset transfers, equity method improvements, and cash flow statement refinements. Regulatory developments from the SEC, including leadership changes, crypto asset guidance, AI and fraud task forces, financial reporting manual updates, and implications of major U.S. fiscal legislation. Sustainability reporting developments, highlighting ISSB exposure drafts and significant simplification of European Sustainability Reporting Standards (ESRS), with reduced reporting burden and enhanced interoperability. Practical effective-date guidance, with appendices outlining ASUs effective in 2025 and 2026 to support timely implementation planning.

India’s IT landscape has experienced a dramatic shift over recent decades, moving away from traditional, paper-dependent bookkeeping methods to a vibrant, tech-powered ecosystem. Today, organizations depend on — ranging from enterprise resource planning (ERP) tools to cloud platforms — not only to boost efficiency but also to safeguard compliance, security, and data accuracy of financial reporting. This change entails additional responsibility since keeping thorough records helps to prove financial integrity and responsibility. An audit trail acts as the "black box" of an organization—a kind of financial journal that captures every activity. It records who did what, when, and how within the financial system. This creates a straightforward way to verify the accuracy and accountability of financial records. Think of it as holding a backstage pass that lets you peek behind the curtain—offering complete visibility into every transaction for transparency, tracking access to sensitive data to bolster security, and capturing system changes to ensure compliance. With their growing importance, audit trails are now a legal must-have in India, following regulatory mandates that came into effect on April 1, 2023. The push for audit trail comes straight from the Companies (Accounts) Rules, 2014, where Rule 3(1) says any organization using accounting software—whether it's ERP systems or even web portals—must have a permanent audit trail that can't be turned off. It’s got to automatically track every change, stamp it with a timestamp, and keep those records on hand for audits. Meanwhile, auditors, under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, must double-check that this feature was running all year, and wasn't tampered with. This rule isn't just for large organizations—it applies to every Indian organization. Whether it's nonprofits under Section 8 or foreign entities, it covers everything from standalone to consolidated financial statements.

Welcome to our Standard Setters' Updates of FASB & SEC. In this publication, we present a concise overview of the latest developments in financial reporting and highlight key considerations as we move through 2025. The Accounting Updates summarize FASB's new guidance issued in the first half of the current year and highlight the accounting standards that are effective in 2025. The FASB Current Projects section provides an overview and status of the items that FASB is actively working on. The Regulatory Updates section brings you noteworthy updates from the SEC. The Sustainability Reporting Developments section outlines the changes to ISSB’s Disclosure and European Union’s Reporting requirements. The Financial Accounting Standards Board (FASB), in November 2024, issued ASU 2024-03 which requires public business entities to disaggregate expenses in the income statement into specific categories and reconcile those to the totals reported in the financial statements. Subsequently, the Board realized a clarification was needed to avoid confusion regarding when the standard applies, particularly in interim periods. Therefore, the Board issued ASU 2025-01 clarifying the effective date to be the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. In 2022, the Securities and Exchange Commission (SEC) published interpretive guidance as Staff Accounting Bulletin (SAB) No. 121 on Topic 5.FF, Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users. SAB No. 121 required entities safeguarding crypto-assets to record a liability and a corresponding asset at fair value. However, this guidance created practical challenges and accounting complexities. To address these concerns, the SEC later issued SAB No. 122, rescinding the interpretive guidance published as SAB No. 121. The amendment removes the obligation to recognize a safeguarding liability and corresponding asset, instead directing entities to apply traditional loss contingency guidance under ASC 450-20: Loss Contingencies when accounting for obligations to safeguard crypto-assets. Therefore, the Board issued ASU 2025-02 to inform about SAB No. 122 rescinding the interpretive guidance in SAB No. 121. Entities should apply the rescission of Topic 5.FF on a fully retrospective basis in annual periods beginning after December 15, 2024.

In a dynamic and fast-paced global environment, organizations are navigating ever-increasing challenges driven by technological advancements, environmental demands, and changing societal expectations. These changes blur traditional risk boundaries and create a complex, interconnected risk landscape. As a result, it has become imperative for internal audit functions and organizations as a whole to develop the ability to identify, understand, and mitigate risks, enabling them to achieve resilient and sustainable growth. These emerging threats also provide internal audit teams with an opportunity to demonstrate agility, prudence, and strategic insights, thereby reinforcing their role in enhancing organizational resilience and long-term value creation. Business continuity risks are probable disruptions that hinder an organization's ability to operate effectively and deliver essential services. The disruptions may arise from multiple sources such as natural calamities, technological disruption, cybersecurity incidents, geopolitical conflicts, and supply chain disruptions. The COVID-19 pandemic or Suez Canal blockage were recent and powerful examples of how such risks can severely impact global operations. Continuity risks are highly interconnected and interdependent. A minor disruption in one part of the chain can trigger a domino effect, leading to operational and financial consequences globally. Thus, strengthening operational resilience is essential for maintaining stakeholder trust and sustaining long-term value delivery. Human capital risk is the vulnerability organizations encounter in attracting, retaining, and developing their talent. Employees are the most valuable assets and vital pillars of any organization. Failure to manage talent effectively can significantly impact business continuity, innovation, and competitive edge.

The importance of transparent financial reporting cannot be overstated in today's complex business environment. Investors, lenders, and other capital providers rely heavily on financial statements to evaluate an entity's performance, assess its prospects for future cash flows, and benchmark it against peers. A critical component of this evaluation is understanding the composition of expenses, as they often reveal key insights into cost structures, operational efficiencies, and long-term sustainability. Historically, U.S. GAAP has not required consistent disaggregation of income statement expenses, leading to diversity in reporting practices. This lack of standardization has posed challenges for users in comparing financial results across entities and industries. Recognizing this gap, the Financial Accounting Standards Board (FASB) introduced the proposed Accounting Standards Update (ASU) Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses in July 2023. After gathering extensive feedback through public comments and roundtable discussions, the FASB finalized the amendments in November 2024. These changes aim to enhance the decision-usefulness of financial reporting by requiring disaggregated expense disclosures within the footnotes of financial statements. In January 2025, FASB issued Accounting Standard Updates No. 2025-01, Income Statement-Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The updates apply to all public business entities and shall be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Securities and Exchange Board of India (SEBI) has introduced a new Industry Standard on "Minimum Information to be Provided for Review by the Audit Committee and Shareholders for Approval of Related Party Transactions (RPTs)." This standard, effective from April 1, 2025, applies to all listed entities in India and aims to standardize reporting and disclosure requirements, thereby elevating governance, transparency, and oversight of related party transactions (RPTs). The key requirements include ensuring accurate identification of all related parties as per Regulation 2(1)(zb) of SEBI’s LODR Regulations, 2015. Transactions must be classified based on materiality, distinguishing between material RPTs, transactions involving promoters or promoter groups exceeding prescribed thresholds, and residual RPTs outside the above categories. Internal auditors must verify that adequate documentation is maintained for each related party transaction (RPT), capturing all relevant details as applicable. This includes basic details of the related party, relationship and ownership of the related party, financial performance of the related party, details of previous transactions with the related party, amount of the proposed transactions, and basic details of the proposed transaction. Additional details must also be maintained for proposed transactions relating to the sale, purchase, or supply of goods or services, or any other similar business transaction; loans, inter-corporate deposits, or advances given by the listed entity or its subsidiary; investments made by the listed entity or its subsidiary; and guarantee (excluding performance guarantee), surety, indemnity, or comfort letter made or given by the listed entity or its subsidiary.

Explore how audits empower healthcare providers to tackle AI risks, policy shifts, and pricing reforms with confidence.