ICAI Panel Proposed Setting Up Separate Regulatory Framework
April, 03rd 2010
Institute of Chartered Accountants of India (ICAI) panel formed by the apex body of accountants to study the fallout of the scam at Satyam Computer Services Ltd proposed to set up a separate regulatory framework. The separate regulatory is being recommended in order to oversee foreign entities providing a range of management consultancy, auditing and other services to Indian clients.
The recommendation is contained in a report the committee submitted on 4 February to the central council of the Institute of Chartered Accountants of India (ICAI), which regulates Indian auditors and accountants.
The high-powered panel was headed by former ICAI president Uttam Prakash Agarwal.
Further, the report suggest that the council may consider recommending to the government to bring all the entities that are providing a range of management consultancy and other services in competition with members of the institute under a regulatory mechanism.
Satyam Hyderabad - based has been at the centre of Indias biggest corporate fraud inquiry after founder B. Ramalinga Raju confessed in January 2009 to having misstated accounts to the tune of Rs7,136 crore, over a period of several years.
The government asked ICAI, one of several agencies investigating the fraud, to look into auditing lapses at Satyam.
Satyam auditor Price Waterhouse Bangalore, an Indian partner of PricewaterhouseCoop ers Llp, one of the worlds big four auditing firms, also came under scrutiny following the scam, with two partners being arrested in connection with the fraud.
Presently, as per sources, ICAI committee, in its recommendations, said that the council may consider action needed to be taken against the audit firms that had not yet provided the information it had sought from them.
However, according to the report, information has been sought from 94 accounting firms, which were perceived to have affiliations with international entities on their tie-ups.