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April 2009

Multiple auditors may make entry in India Inc books

By Raman Jokhakar, Tarunkumar Singhal, Chartered Accountants
Reading Time 2 mins

New Page 27. Multiple
auditors may make entry in India Inc books

Companies may soon have to get
their financial statements vetted by more than one auditor. The Institute of
Chartered Accountants of India (ICAI), the country’s accounting and auditing
rule-maker, is considering a proposal to make it mandatory for companies to get
their books audited by more than one auditor, so that each of the audit firms
could observe the practices followed by the other. The regulator believes the
move will ensure that auditors do not enter into a cosy arrangement with the
company management.

Joint auditing of financial
statements is a common practice within public sector undertakings (PSUs), due to
the huge volume of data auditors are required to go through. Even as PSUs engage
joint auditors for the reason of a judicious division of their audit work,
private companies are not always in favour of engaging more than one auditor.
Audit in India can be done by CAs whose names are registered with the ICAI.
Auditors of PSUs are selected from a list of chartered accountants whose names
are cleared by the office of the Comptroller and Auditor General of India (CAG).

(Source : The Economic Times,
9-3-2009)

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