ICAI seeks more powers to prevent frauds

Stung by the sensational revelations of financial irregularities in Satyam Computers, Institute of Chartered Accountants of India has sought more powers to prevent such frauds by making auditors more accountable.

Stung by the sensational revelations of financial irregularities in Satyam Computers, Institute of Chartered Accountants of India (ICAI) has sought more powers to prevent such frauds by making auditors more accountable.

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“The regulatory framework must be altered to give more teeth to ICAI and ensure that high accounting standards are maintained,” Uttam Prakash Agarwal, who took over as the new president of the body, said.

The role of auditors has come under the scanner after Satyam’s disgraced founder-chairman confessed to

doctoring of accounts for several years.

Agarwal said that action would be taken against any chartered accountant registered with the institute if found guilty. “We will take up the issue (of giving more teeth to ICAI) with the ministry of corporate affairs,” he said.

Auditors have received a lot of flak after the alleged fraud at Satyam Computers came to light and Agarwal said there was need to change this perception.

“The institute will set up an effective monitoring system by strengthening the institutional framework,” he said.

He also underlined the need to strengthen the Financial Review Reporting Board (FRRB) that is mandated to randomly review the records and procedures of auditors.

Besides, plans are afoot to introduce joint audit system and rotation of auditors through a stringent mechanism.