Auditing norms in the country are set for a comprehensive overhaul as regulators, government and corporations launch major initiatives to raise standards in wake of the alleged Rs 7,000-crore fraud at Satyam Computer Services.
The Quality Review Board (QRB), an independent body set up by the government under the Ministry of Company Affairs to look into the standards and norms of audit and chartered accountancy firms, is set to redefine new stringent norms for audit firms in the country.
It may push the Securities and Exchange Board of India (SEBI) and the government to mandate the listed companies to rotate their auditors, a practice currently being followed by public sector enterprises.
“To ensure that Satyam-type frauds do not recur, it is important to rotate the auditors, as is the norm in public sector undertakings,” BC Jain, member, QRB, told Hindustan Times. The issue may be taken up for consideration at other forums.
The role of auditors have come under scrutiny in the wake of Satyam Computers’ disgraced chairman B Ramalinga Raju’s confessions that the technology firm’s books were doctored for several years.
Members of the board said that once the full board is in place, it would look into the norms that guide the auditing firms in the wake of the Satyam fiasco.
Ved Jain, president, Institute of Chartered Accountants of India said the board must start its operations. “We have provided the required funds and infrastructure to the board and it can start functioning on an immediate basis, once the chairman is appointed.”
The QRB, mandated to lay down the standards, is currently functioning without a chairman.