The Satyam fiasco threw up several questions relating to the country’s accounting system. According to John Mellows, partner, Mazars Asia-Pacific, joint auditing must be made mandatory to break the cartel of Big Four — KPMG, E&Y, PwC and Deloitte. He also said that the joint auditing system would improve internal discipline and internal control.
The Big Four dominates the accounting landscape, which was expected to change after the Satyam episode. Why has that not happened?
The landscape here is dominated by the Big Four, which is also the case world over. There needs to be a joint auditing system that will not only open up the market but also provide a stronger framework.
Why are countries not looking at making joint accounting mandatory?
This will not happen voluntarily, there needs to be a market intervention. We have this system in France. Apart from France, I do not know any other country, which follows the joint auditing system. However, here, public sector banks are mandated to follow the joint accounting system and the result is clear as India has a very solid banking system.
Do you think rotation of auditors would help?
Rotation of auditors is not effective as it is cost intensive and would require wholesale change, which is hugely disruptive for any organisation. This is not always feasible.
How do you think your firm can make an impact and become an important player in the market?
We want to become a strong player in certain services especially in the area of statutory audit. We are also looking at increasing our headcount significantly in the next five years. Also the bar would automatically be raised once there are a larger number of listed companies in the country.