1. BACKGROUND
The certification/attestation of documents by a Chartered Accountant is of immense value since it signifies that the Chartered Accountant, in his professional capacity, has ensured that there is no misrepresentation of facts in the document certified or attested and such documents are relied upon by the investors, shareholders, bankers and other stakeholders.
Malpractices of forged signatures on certificates and documents have been noticed and these should be curbed. In lieu of the demand from various Regulators and others, the Professional Development Committee of ICAI has come out with an innovative concept of Unique Document Identification Number (UDIN) for securing the documents issued by a Chartered Accountant.
UDIN is a system generated unique number (on UDIN portal) for every document certified/attested by a Practicing Chartered Accountant who’ve registered themselves on the portal.
The concept of UDIN being new, is being implemented in a phased manner. Since 1st February, 2019 all certificates issued by Chartered Accountants have been made mandatory.
- All certificates generated by Practising Chartered Accountants w.e.f. 1st February 2019.
- All GST & Tax Audit Reports w.e.f. 1st April 2019.
- All other attest functions w.e.f. 1st July 2019.
State Bank of India vide circular no. CCO/CPPD-ADV/136/2018 – 19 dated 18th December 2018 has mandated all managers of its branches to verify authenticity of Financial documents/ Certificates issued/Certified by Chartered Accountants (CAs) under ICAI’s Unique Document Identification Number (UDIN).
Through this UDIN the Regulators/Banks/third parties can check the authenticity of the document.
2. MEANING
UDIN is 18 digits number which comprises of 6-digit Membership no., 6-digit date of signing the document and 6-digit document serial number. Generating UDIN makes the certificate/document secure.
3. REGISTRATION AND REVOCATION
All practicing Chartered Accountants having full time Certificate of Practice (COP) can only register on the UDIN Portal to generate UDIN.
While registering any certificate key values like financial figures (turnover/net worth/export amount) has to be mentioned. To generate UDIN, date of signing the document and type of document is mandatory.
The generated UDIN can be revoked or cancelled only after giving the appropriate narration. UDIN number should be generated within 15 days of the date of signing the documents. UDIN number cannot be generated offline. UDIN number cannot be generated in advance it is to be generated for all Certificates that are signed on or after 1st February 2019.
UDIN can be revoked for a valid reason, there is no prescribed time limit for revocation. An alert message will be sent about the revocation of the UDIN, if any user had searched that UDIN before revocation.
4. APPLICABILITY
ICAI has mandated that all practicing CAs should w.e.f 1st February 2019 obtain UDIN for all certificates (certified true copy) where financial information is included. UDIN will be applicable for manual as well as digitally signed certificates / uploaded online.
Certificates to be registered at UDIN Portal
- Certificates issued on the basis of Financial books of accounts and annual financial statements-Capital Contribution Certificate/net worth certificate/Turnover Certificate/working Capital Certificate
- Certificates issued on the basis of Statutory records being maintained under Indian Companies Act, 2013 and applicable provisions
- Certification of Fair Values of Shares of Company for the scope of merger / de-merger, Buy Back, allotment of further shares and transfer of shares from resident to non-resident.
- Certificates for Foreign Remittance outside India in form 15CB.
- Net worth Certificates for Bank finances/Guarantee
- Certificate in respect of Liquid Asset under Section 45-IB of RBI Act, 1945
- Certification of arm’s length price u/s 92 of the income Tax Act, 1961
- Certificates for funds/ Grants utilization for NGO’s/ Statutory Authority
- Certificate issued Under RERA/FERA/FEMA/income tax laws for deductions/other Laws
- Certification under Exchange Control legislation for imports, remittances, ECB, DGFT, EOU, etc
- Certificates in relation to initial Public Issue/compliances under ICDR and LODR
- Certificate issued for KYC purpose to banks confirming sole proprietorship
- Certificates issued under LLP Act
- RBI Statutory Auditor Certificate for NBFCs
Certificates not to be registered at UDIN Portal
- Auditor’s Opinion/Reports issued by the Practicing Chartered Accountant under any Statute w.r.t. any entity or any person (e.g.: Tax Audit, Transfer Price Audit, VAT Audit, GST Audit, Company Audit, Trust Audit, Society Audit, etc.
- Valuation Reports,
- Quarterly Review Reports,
- Limited Review Report
- Information System Audit,
- Borrower Monitoring Assignments,
- Any report of whatsoever nature issued including Transfer Price Study Report, Diligence Report, Due Diligence Report, Management Report, etc.
5. CONSEQUENCES OF NON-GENERATION OF UDIN
UDIN generation is being made mandatory as per the Council Decision of ICAI, hence not generating UDIN for mandatory documents will amount to non-adherence of the Council’s Decision and may attract disciplinary proceedings.
6. BENEFITS OF UDIN
- Improved transparency and lesser scope for forgery.
- Curb on malpractices related to the certification/attestation thereby leading more reliability of documents for investors and other stakeholders.
- No back dating of certificates/document where UDIN is generated as the UDIN number will reflect the date of signing the document.
- Security of the documents as it can only be viewed only by the Member and/ or the Regulators / other Stakeholders who are having the UDIN.
IMPLICATIONS OF UDIN IMPLEMENTATION ON COMPANY SECRETARIES
Company Secretaries require certificates from Chartered Accountants in relation to various Corporate Events like Buy Back, Mergers etc., It would be essential to plan the activities well in advance by collaborating and working with co-professionals so that the compliance are done as per law and timely.
| S. No. | Certificates under Companies Act to be registered at UDIN Portal |
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Certification of Fair Values of Shares of Company for the scope of merger / de-merger, Buy Back, allotment of further shares and transfer of shares from resident to non-resident. |
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Net worth/Turnover Certificate |
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RBI Statutory Auditor Certificate for NBFCs |
ICAI is spreading awareness about mandatory applicability of UDIN to all regulators like RBI, SEBI, CBDT, MCA, IBA so that they can use UDIN verification facility. All the stakeholders who are a part of the ecosystem should be educated and made aware of UDIN.
Article contributed by:
Deepika Gupta, R&A Associates Team.