The Institute of Chartered Accountants of India (ICAI), which has sent its recommendation to the government seeking more teeth and regulatory power, has said that it should be allowed to take action against any audit firm in case discrepancy or doctoring of records. The issue has come to light after the Satyam fraud.
At present, individual chartered accountants are held responsible for any accountancy fraud but there is no accountability linked to audit firms.
In the Satyam case, its audit was handled by Price Waterhouse a member firm of PricewarterhouseCoooper International since 2000-2001 and the balance sheet as of March 31, 2008 was signed off by Srinivas Talluri, a partner of Price Waterhouse in Hyderabad.
"We have said that it is important to be able to take action against the accountancy firm in case of negligence or discrepancy. At Present, the ICAI is authorised to take action only against the chartered accountant and not against the firms," Amarjit Chopra, president, ICAI told HT.
Besides, the accountancy regulator has asked for more power to be able to seek information and ask questions to managements if and when required, Chopra said. "Until now, chartered accountants have been dealing and assessing the authenticity of data and records that are provided to them but in cases where accountants feel that they need more information, they should be able to ask managements to furnish them."
The Ministry of Corporate Affairs had expressed keenness to arm the accountancy regulator with more power to ensure that the image of corporate India was not tarnished by auditing discrepancies in future.