The Institute of Chartered Accountants of India (ICAI) has taken a number of initiatives to converge auditing in India with global accounting standards. Amarjit Chopra, president, ICAI, in an interview with Media, shares his views on some these initiatives and the need to punish auditors and auditing firms responsible for frauds. Excerpts:
How far has the convergence of the Indian accounting standards with international financial reporting standards (IFRS) progressed?
We are going ahead with the convergence of Indian accounting standards with IFRS and we hope that the government meets the April 11 deadline. We have also started a 90-hour certificate course for our members to train them on IFRS.
Is ICAI considering making the names of auditors found guilty in scams public?
Yes, the ICAI council is considering making public the names of auditors found guilty in scams and once the council approves this, we will do it immediately.
What does ICAI plan to handle auditing firms who have been involved in a fraud?
ICAI wants the government to bring in a provision to bar tainted firms from taking up new assignments for a fixed period, in case any of its partners has been held responsible in a fraud. Currently, if a partner of any firm is held responsible in a fraud, the firm disassociates itself from him and later counts him as a consultant. The government needs to take a stand.
What is the reason behind the falling percentage of students who qualify CA exams? Why has the institute started the trend of making questions in all the subjects compulsory?
ICAI has pushed the bar higher this time around. Until May 2009, one didnt have to solve the entire paper, but now we want students to answer all the questions so that he should have complete knowledge about the course. The good part is that we now provide a holiday between CA papers, something that was not done earlier.
Is ICAI planning to initiate talks with RBI in order to provide adequate time for the auditing of PSU banks?
ICAI wants RBI to extend the number of days given to auditors for auditing PSU banks. Currently, auditors get a time of only 5-6 days to prepare the audit reports of these banks. Auditors should, at least, be given a months time to prepare the audit report, since this is a time-consuming process and it cannot be carried out in just 5-6 days.
What initiatives does ICAI plan to take to improve corporate functioning in India?
The rotation of audit firms is an issue that is being discussed in ICAI council meetings. We have urged the government to lay down guidelines for independent directors, including their terms of appointment, responsibilities and tenure in the company. We will also welcome a whistle-blower system in Indian companies and auditing firms.