Unfazed by the onerous responsibility cast on the auditing community, the chartered accountants’ institute is hopeful that its concerns over the Companies Bill 2012 will get remedied at the time of framing of the rules.
The Companies Bill 2012, passed by Parliament on Thursday, is awaiting the Presidential assent.
The biggest concern for the Institute of Chartered Accountants of India (ICAI) is that the new law would dilute its regulatory hold over its members.
The Companies Bill 2012 proposes the setting up of a National Financial Reporting Authority as an “overarching body” to not only bring in work transparency, but also instil confidence in the Indian economy among investors.
“We have to accept the new Companies Bill in the form passed by Parliament. All efforts will now be made to build capacity amongst our members in the coming months to effectively implement the law. We are hopeful that the subordinate legislation (rules) will address our concerns,” Subodh Agrawal, ICAI President, told Business Line.
Meanwhile, the auditing community is keen that the proposed rules provide enough protection for statutory auditors.
“In the proposed Rules for Companies Act, the auditors must be protected from frauds perpetrated by promoters and that cannot be easily revealed in normal statutory audits,” G. Ramaswamy, former President of the CA institute said.
Promoters often conceal crucial information and it would not be fair to always lay the blame at the door of the statutory auditor, Ramaswamy said.