FAIS 210 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Before a forensic accountant opens a single ledger, six ICAI standards decide what the engagement is for, whether it should be accepted, who else will be involved and how the work will be planned. Getting these right protects both the professional and the client, because the output may end up before a court, a tribunal or a regulator.
This article is from the ICAI Compendium of Forensic Accounting and Investigation Standards (as on September 2025); mandatory for engagements conducted on or after 1 July 2023. ICAI may revise the standards, so check the current text on icai.org.
FAIS 210 requires the professional to understand and document the main purpose of the engagement and define its scope. FAIS 220 requires preliminary procedures, a due diligence on the engagement's own risks and a signed engagement letter before acceptance is complete. FAIS 230, 240 and 250 govern experts, agencies and communication, and FAIS 310 requires a documented planning process.
FAIS 210: engagement objectives
FAIS 210 deals with setting the objectives clearly (paragraph 1.1). It does not apply where the outcome of the work is used for testimony (paragraph 1.3). The requirements are short:
- The Professional shall understand and document the main purpose, whether forensic accounting, investigation or litigation support (paragraph 3.1).
- Scope is defined in line with the objectives, so it is clear what is included and what is excluded; the need to testify is one example of something that may be written into scope (paragraph 3.2).
- The expected outcome must match the objectives and scope, and any mismatch is raised and resolved (paragraph 3.3).
- The objective must not commit to a particular outcome, because the outcome depends on the facts and evidence gathered. Reasonable conclusions may be drawn from the evidence where the mandate includes that (paragraph 3.4).
Paragraph 4.2 adds a caution. Where the Professional is engaged to do forensic work ahead of similar work planned by others, such as law enforcement agencies, the engagement is accepted with ethical safeguards, and it may be declined, with reasons recorded, if there is concern about misuse. The standard's annexure gives illustrative service areas under the three kinds of engagement; it is a list of examples and not a limit.
FAIS 220: acceptance and appointment
Paragraph 3.1 asks for preliminary procedures before acceptance: understanding the nature and complexity of the work and assessing whether the Professional can undertake it while keeping to the Basic Principles. Paragraph 4.1 gives examples such as independence, capability with available resources, complexity of the laws involved and constraints on scope. Paragraph 3.2 adds a due diligence on the engagement's inherent risks, including the purpose and the ultimate use of the outcome. Paragraph 3.3 asks for all key stakeholders and all direct and indirect users of the report to be identified, for example law enforcement, regulators or lenders.
| Step | What the Professional does | Paragraph |
|---|---|---|
| Preliminary procedures | Assess nature, complexity, independence and capability before accepting | 3.1, 4.1 |
| Engagement due diligence | Review purpose, scope limits, stakeholders, access to systems, skills, deliverables, users, fees | 3.2, 4.2 |
| Stakeholder map | List primary stakeholders, persons covered and report users | 3.3 |
| Written terms | Signed engagement letter, or letter of appointment from a government agency | 3.4 |
| Scope limits | Decline where undue restrictions limit effective work, and say why | 4.3 |
| Later changes | Record scope changes by addendum before the deliverables are issued; withdraw if the revised terms cannot be agreed | 4.4 |
Acceptance is complete only when the appointing stakeholders have signed the engagement letter or issued a letter of appointment (paragraph 4.4). The standard's annexure shows the headings of a typical letter, including objective, scope, deliverables and intended use, stakeholder responsibilities such as access to records and people, the team, confidentiality, fees and termination. For the drafting side of such terms, see our guide to service contracts and internal audit agreements. A company that wants help scoping a review of this kind can speak to us about financial and legal due diligence.
FAIS 230: using the work of an expert
The Professional makes an independent decision to use an expert, weighing the subject's complexity and technicality, the fraud risk and the gap between the expertise needed and the expertise available (paragraph 3.1). The requirements follow the life of an expert's assignment:
- Seek authority to select and appoint the expert; where others appoint, test the expert's independence and objectivity and share concerns with the appointers (paragraph 3.2).
- Evaluate qualifications and credentials (paragraph 3.3).
- Where the expert's findings will go into the report, take part in defining scope and deliverables (paragraph 3.4).
- Evaluate whether the expert's procedures followed due process and produced relevant, reliable evidence (paragraph 3.5).
- Retain ultimate responsibility for the conclusions that are included, and state the expert's role and the reliance placed on the work in the report (paragraph 3.6).
FAIS 240: engaging with agencies
Where the engagement involves an agency, the Professional agrees objectives, scope and planned procedures with it in a suitable form (paragraph 3.1), understands the laws that govern the agency and the legal implications of the work (paragraph 3.2), and puts special weight on independence, integrity, objectivity and confidentiality (paragraph 3.3). The explanatory comments add that the engagement may run for long and that evidence and documents must be secured so they remain suitable before the competent authority (paragraph 4.3.2). If the agency later asks for explanations of the work, the terms of engagement should already cover sharing information with agencies (paragraph 4.4).
FAIS 250: communication with stakeholders
Communication follows a laid-down process and a pre-agreed protocol, including direct communication with primary stakeholders (paragraph 3.1). Contact with other stakeholders is pre-defined, and contact with government authorities may be protracted and may need to be part of the terms (paragraph 3.2). Messages are clear, objective, open-minded and mindful of law, confidentiality and natural justice (paragraph 3.3). Paragraph 3.6 bars disclosure of engagement information without the express permission of primary stakeholders, unless a law requires it, and asks the Professional to stay away from the media unless expressly authorised and, if needed, advised by counsel. The standard also separates "essential matters", needed to execute the engagement, from "significant matters" (paragraphs 3.4 and 3.5).
FAIS 310: planning the assignment
Planning follows a laid-down process and its outcome is documented (paragraph 3.1). Paragraph 3.2 names five key elements: knowledge of the business and environment, risk considerations, discussion with stakeholders, technology deployment and resource allocation. Paragraph 3.3 requires the work methodology, including any hypotheses, and the depth and nature of procedures to be set and documented. Elements of the plan relevant to execution are shared with stakeholders on a need-to-know basis before procedures begin (paragraph 3.4). Paragraph 4.3 says the plan reflects the fraud risk understanding under FAIS 120 and the engagement due diligence done under FAIS 220; see our article on fraud risk and red flags.
Illustrative example
Illustrative: the audit committee of Meridian Polymers Ltd suspects that advances to a trading firm were routed back to a director's relatives. It asks a chartered accountant to look into it. The accountant first records the purpose as an investigation, defines scope as the advance ledgers and related bank accounts for two years, and notes that testimony is outside scope unless added by addendum. Due diligence finds that the finance head, one of the key stakeholders, is a relative of the director concerned; the accountant asks that reporting go directly to the audit committee chair and records this in the engagement letter. Because the bank records need specialist recovery of deleted files, the accountant evaluates a data specialist's credentials and independence before appointing. The plan sets hypotheses, tools, staffing and a need-to-know circulation list.
Common lapses
- Accepting on a phone call and writing the letter later.
- Scope that silently grows after acceptance, with no addendum.
- Appointing an expert chosen and paid by the party under review without testing independence.
- Briefing the press, a lender or a regulator without the primary stakeholders' permission.
- A plan that omits hypotheses or technology and privacy considerations.
Need help with the scope of a forensic assignment?
If your board is weighing an investigation or a fact-finding review, we can walk through objectives, scope limits and stakeholders with you under financial and legal due diligence before anything is signed.
Key takeaways
- Objectives and scope are written down before work starts, and no outcome is promised (FAIS 210, paragraphs 3.1 to 3.4).
- Acceptance follows preliminary procedures and an engagement due diligence, and is complete only on a signed engagement letter or letter of appointment (FAIS 220).
- The Professional keeps responsibility for expert conclusions used in the report (FAIS 230, paragraph 3.6).
- Communication with agencies and other stakeholders follows a pre-agreed protocol, and nothing is disclosed without permission or legal need (FAIS 240, 250).
- Planning is documented and includes hypotheses, technology, resources and risk (FAIS 310).
Read next
- Forensic Accounting and Investigation Standards: framework and basic principles
- FAIS 320 to 360 and 510: evidence, procedures, interviews, review and the report
- Service contracts and internal audit agreements: fifteen clauses each
Disclaimer: Based on the Standards on Auditing, the review, assurance and related services standards, the Compendium of Standards on Internal Audit (as on 1 October 2022) and the Compendium of Forensic Accounting and Investigation Standards (as on September 2025) issued by the Institute of Chartered Accountants of India, in the versions named in the article, as consulted on 4 October 2026. ICAI revises standards from time to time; check the current text and effective dates on icai.org and the Companies Act provisions referred to. This article is general information, not legal advice; check the official text before acting.