This blog talks about the laws and regulations that have provisions for the use of electronic signatures for signing audit reports and certificates.

1. Electronic Signatures: Streamlining Audit Processes | DrySign
Embracing Digital Transformation: Electronic Signatures
for Audit Reports and Certificates
In response to the novel Coronavirus outbreak, governments worldwide implemented
various measures such as lockdowns, self-quarantine, travel restrictions, and social
distancing protocols to prevent the virus from spreading further. These measures
significantly impacted businesses worldwide, and it was no different for accounting
professionals. However, while these precautions were essential, they presented auditors
with difficulties accessing client premises to gather the necessary audit evidence, which is
crucial for conducting audits effectively.
Can CAs use electronic signatures?
In order to support chartered accountants in conducting high-quality audits while ensuring
compliance with auditing standards, the Institute of Chartered Accountants of India (ICAI)
implemented several measures to facilitate their seamless performance of duties and
responsibilities.
The primary pursuit of an audit is to provide an unbiased assessment of the financial
statements of the audited entity. By ensuring the integrity and accuracy of audited financial
statements, they become reliable sources of information for various stakeholders.
In light of this, in 2020, the ICAI allowed the use of Electronic Signatures for Signing Audit
Reports and Certificates. As a result, chartered accountants across the country can now
utilize their electronic signatures for signing audit reports and certificates. This progressive
step aims to streamline the audit completion process and facilitate the signing of certificates
by Chartered Accountants, promoting ease and efficiency in their professional
responsibilities.

2. Electronic Signatures: Streamlining Audit Processes | DrySign
Dive in to learn more about these provisions in India for using electronic signatures in signing
audit reports and certificates.
Provisions Concerning the Use of Electronic Signature for Authentication of Electronic
Documents as per the IT Act, 2000
Definition of Electronic Signature
Under the provisions outlined in section 2(a), the term "electronic signature" denotes the
verification of electronic documents by the individual subscribing to them through an
electronic method, as detailed in the Second Schedule, which encompasses the utilization of
an online digital signature.
Section 3(A): Electronic Signature
The user is permitted to verify electronic documents through an electronic signature or
electronic authentication method solely under the following conditions:
 It possesses credibility.(Reliable)
 It is explicitly mentioned in the Second Schedule.
For the Electronic Signature or Electronic Authentication Techniques to be considered
reliable, certain conditions must be met:
 The signature creation or authentication data must be associated with the individual
signing or authenticating rather than any other person.
 The signatory or authenticator must have control over the signature creation data or
authentication data at the time of signing without involvement from any other
individual.
 Any modifications to the electronic signature after its application to electronic records
should be identifiable.
 Any alterations to the information after its authentication through an electronic
signature should be detectable.
 Moreover, it is necessary for such a signature to fulfill the requirements stipulated by
the law.
The authority of the Central Government includes the ability to incorporate or exclude any
electronic signature or electronic authentication method, along with the procedure for
applying such signatures to documents, through an official gazette notification.
Section 4: Legal Recognition of Electronic Documents

3. Electronic Signatures: Streamlining Audit Processes | DrySign
In specific situations, it may be required by law that certain information or content be
presented in written, typewritten, or printed form. If such a requirement exists, it can be
fulfilled by ensuring that the information or content:
 Is provided in an electronic format
 Is easily accessible for future reference
Section 5: Legal Recognition of Electronic Signatures
In certain situations, it is necessary to authenticate information or other relevant material
according to legal requirements. This authentication can be accomplished by obtaining the
signature or endorsement of an individual. If the specified electronic signature approved by
the Central Government is used to authenticate the information or material, it would be
considered compliant with the respective law.
Also Read: Electronic Signatures: Simplifying Workflows for Law Firms
Provisions Concerning the Use of Electronic Signature for Authentication of Electronic
Documents as per the Indian Evidence Act, 1872
Section 3: Interpretation Clause
According to this section, evidence is defined as follows:
 Oral evidence refers to all statements witnesses make concerning the matters being
investigated, as permitted or required by the court
 Documentary evidence refers to all documents and electronic records submitted to
the court for examination.
Section 47(A): Opinion with Regards to Digital Signature Where Relevant
In specific scenarios, the court may be required to provide a judgment regarding the validity
of an individual's electronic signature. When faced with such circumstances, the court
considers the opinion of the Certified Authority responsible for issuing the electronic
signature certificate as a crucial piece of evidence.
Section 67(A): Proof as To Electronic Signature
In situations where an individual's electronic signature is applied to electronic records, it is
necessary to establish proof that the signature belongs to that individual. However, this
prerequisite does not apply when the e-signature used is secure. Therefore, based on the
regulations outlined in the Acts as mentioned above, it can be determined that auditors have
been granted permission to utilize electronic signatures to authenticate different documents.
Thus, ICAI members can employ an electronic signature for signing:

4. Electronic Signatures: Streamlining Audit Processes | DrySign
 Audit reports
 Reports issued under any attestation engagement
 Certificates
It should be acknowledged that adherence to the regulations outlined in the law, auditing
standards, and pertinent notifications issued by ICAI regarding electronic signatures is
required by auditors, subject to a condition. This condition necessitates the inclusion of the
Unique Document Identification Number (UDIN) in both manually and digitally signed
reports, as well as in certificates that are uploaded online.
 Financial Audit Report
 Net worth/ Turnover Certificates
 Search Status Reports
 Valuation Report
 Tax Audit Report
 GST Audit Report
 Statutory Audit Report
 Internal Audit Report
 Current Account Opening Introduction Form.
 Projected Statements/Reports
 Financial Statements Certification
 Working Capital/Cash Flow Statements Certification.
 Engagement/Retirement Forms.
 Exam Forms/Membership Forms for ICAI.
Furthermore, like any other organization, a CA firm must execute various documents such as
appointment letters, engagement letters, non-disclosure agreements (NDAs), and service
agreements.
What documents cannot be signed using electronic signatures?
In order to ensure legal enforceability, certain documents cannot be signed electronically and
require traditional "wet" signatures. These include:
 Negotiable Instruments:
Examples: Promissory notes or bills of exchange, excluding cheques.
 Powers of Attorney:
Documents granting someone the authority to act on behalf of another person.

5. Electronic Signatures: Streamlining Audit Processes | DrySign
 Trust Deeds:
Legal documents that establish a trust and outline its terms and conditions.
 Wills and Testamentary Dispositions:
Last will, along with any other documents of the distribution of assets after one's passing.
 Real Estate Contracts:
Leases or sale agreements related to properties.
It is important to note that this list is not exhaustive, and it is always advisable to consult with
legal professionals to determine the appropriate signing method for specific documents to
ensure compliance with applicable laws and regulations.
Conclusion
The use of electronic signatures has proven to be revolutionary for businesses. From cutting
unnecessary costs to reducing time spent on redundant tasks, elevating business functions,
and streamlining business operations, online digital signatures can benefit organizations in
many ways. And the same goes for auditing professionals. Now that there are enough
provisions for the use of electronic signatures, we must encourage their use.
With DrySign, you can sign any document securely and legally within minutes. In addition,
DrySign provides a vast range of features to provide a more elevated signing experience. You
can choose from our different plans according to your specific business requirements. Or
even try DrySign for free! So, what are you waiting for…
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DISCLAIMER: The information on this site is for general information purposes only and is
not intended to serve as legal advice. Laws governing the subject matter may change quickly,
and Exela cannot guarantee that all the information on this site is current or correct. Should
you have specific legal questions about any of the information on this site, you should
consult with a licensed attorney in your area.
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