Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Auditing »
Open DEMAT Account in 24 hrs
 NFRA issues Draft Procedure for Submission of Audit Files
 Auditors barred from putting a value on companies they are auditing
 Standard on Internal Audit (SIA) 18, Related Parties
 Standard on Internal Audit (SIA) 17, Consideration of Laws and Regulations in an Internal Audit
 Standard on Internal Audit (SIA) 16, Using the Work of an Expert
 Standard on Internal Audit (SIA) 14, Internal Audit in an Information Technology Environment
 Standard on Internal Audit (SIA) 13, Enterprise Risk Management
 Standard on Internal Audit (SIA) 12, Internal Control Evaluation
 Standard on Internal Audit (SIA) 11, Consideration of Fraud in an Internal Audit
  Standard on Internal Audit (SIA) 9, Communication with Management
  Standard on Internal Audit (SIA) 8, Terms of Internal Audit Engagement

Watchdog seeks audited a/cs every 6 months
September, 15th 2009

An expert panel of Securities and Exchange Board of India has proposed disclosure of audited balance sheet on a half-yearly basis by listed companies.

At present, a listed company discloses audited accounts once a year at the annual general meeting. This is among a slew of recommendations made by the Sebi committee on disclosure and accounting standards (Scoda).

The accounting irregularities at Satyam Computer Services reiterate the need for having greater internal checks and controls in an organisation, the Sebi committee said in a discussion paper put out on Monday inviting public comments till September 25. Sebi will take a final decision on the new disclosure norms proposed by the committee after getting public comments.

I think this is a precursor to quarterly disclosure of audited balance sheet. I think this along with the rotation of partners of an auditing firm will ensure better corporate governance, which will be beneficial to investors, said Devan Choksey of KR Choksey Securities.

Pinning the responsibility of ensuring the independence of the external auditor and its partners on the audit committee of the company, Scoda has also proposed that the partner of the audit firm of a listed firm be rotated every five years to avoid management-auditor connivance.

This is in line with what ICAI has been recommending for sometime now. Rotating audit partners brings in a new perspective apart from better compliance, said Shai-lesh Haribhakti of Haribhakti & Co.

Citing scope for improvements in accounting norms, following the Satyam Computer scam, Sebi had asked Scoda to look into the possibility of carrying out internal che-cks and balances in firms by external auditors.

However, considering the fact that internal auditors have a better knowledge about the business of the company, Scoda felt that the present practice may be continued.

Sebi panel proposals are expected to bring transparency in the corporate governance. It is expected to lift the corporate governance standards in the country. The need to upgrade standards was felt since the Satyam scam hit the market. The guideline to rotate auditors after every five years is welcomed decision. The decision to ask listed companies to report audited results twice a year may also lift investors confidence in the markets said Jagannadham Thunuguntla, head of research at SMC Capital.

Another issue, which Scoda felt may best remain unchanged is prescribing professional qualifications or financial literacy for chief executive officers and chief financial officers of companies.

While the committee felt that specifying a particular qualification for CEOs may not be appropriate as companies prefer personnel with relevant experience for such posts, it suggested that the responsibility of selecting CFOs with adequate qualification be given to the audit committees of companies.

the Scoda was of the view that the objective that the CFO has adequate financial expertise to review and certify the financial statements could be achieved by ensuring that the appointment of CFO is approved by the audit committee, which while doing so shall be required to assess the qualifications, experience and background, it said.

Further, in order to prepare India Inc to adopt International Financial Reporting Standards (IFRS) that are expected to take effect from financial year 2011, Sebi had asked the committee to look into the possibility of allowing companies to voluntarily implement the practice.

The committee had two viewpoints on this issue. It felt that those listed entities that have overseas subsidiaries contributing to a major portion, say at least 50 per cent of the total revenues of the consolidated entity should be given the option to voluntarily adopt IFRS.

However, restricting the aforesaid option to submit consolidated financial results in IFRS to only those listed entities with overseas subsidiaries may not be viewed as fair and the option may be extended to all listed entities having subsidiaries, especially if the objective of voluntary adoption is to enable entities to prepare themselves for mandatory convergence with IFRS by 2011, Scoda said.

The committee has also proposed a uniform timeline for submission of financial results by listed entities.
It has put forward that listed entities shall be required to submit their quarterly and year-to-date audited and standalone financial results or quarterly and year-to-date unaudited standalone results accompanied by limited review report of the auditor within 45 days from the end of the quarter. This is applicable to all quarters except the last one.

Listed entities with subsidiaries may, along with the quarterly and year-to-date standalone financials also submit consolidated audited quarterly and year-to-date results or unaudited results accompanied by limited review report, as the case may be, within 45 days from the end of the quarter, it said.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting