Clearwater Audit Associates IFSC LLP, a professional services firm registered at GIFT City, was engaged by Kuwai Capital Fund IFSC, an IFSCA-regulated fund, to provide a suite of financial services. The engagement letter

Considering the importance of professional and other service providers for the development of financial products, financial services and financial institutions in IFSC, a framework for enabling ancillary services has been provided by IFSCA. Ancillary services shall mean those services which directly or indirectly aid, help, assist or strengthen or are attendant upon or connected with the services. Accounting and Auditing services Financial auditing services: Examination of the accounting records and other supporting evidence of an organization for the purpose of expressing an opinion as to whether financial statements of the organisation present its financial and operational position fairly on a given date, in accordance with accepted accounting principles. Accounting review services: Reviewing services of annual and interim financial statements and accounting information. The scope of a review is less than that of an audit and therefore, the level of assurance provided is lower. Compilation of financial statements services: This includes compilation of financial statements from information provided by the client. No assurances regarding the accuracy of the resulting statements are provided. This service shall also include the preparation services of business tax returns, when provided as a bundle with the preparation of financial statements for a single fee. Other accounting services: Other accounting services such as attestations, valuations, preparation services of pro forma statements, etc. Bookkeeping services, except tax returns: Bookkeeping services consisting of classifying and recording business transactions in terms of money or some unit of measurement in the books of account. In the given case, Nalini Desai's regulatory apprehension regarding the bundled arrangement is not legally founded. Under the IFSCA framework for Ancillary Services, the 'Compilation of Financial Statements' specifically includes the preparation of business tax returns when provided as a bundle for a single fee. Furthermore, all four assignments undertaken by Clearwater i.e Auditing, Reviewing, Compilation, and Bookkeeping fall squarely within the permissible scope of 'Accounting and Auditing' or 'Bookkeeping' services. The engagement is fully compliant with the regulatory framework.