The Satyam fiasco should be seen more as an audit process failure and not as an accounting issue, Mr T.V. Mohandas Pai, Member of the Infosys Board and Trustee of the IASC Foundation, said.

It is a failure of the auditing process. The auditing process says very clearly that you must ask for an independent confirmation of bank balances from the banks. To me it looks as if it has not been done.

As auditors, you write to the banks and ask for a confirmation directly. You do not go by the records of the company that is how it has to be done as per the standards, Mr Pai told reporters here.

Mr Pai was in the Capital to attend the first ever meeting in India of the trustees of the IASC Foundation. The IASC Foundation governs the International Accounting Standards Board (IASB), which is standard-setter and the body behind International Financial Reporting Standards (IFRS), which is emerging as a gold standard for accounting.

What happened in Satyam was more to do with the failure of the auditing process, failure of corporate governance process. India has good auditing standards, India follows global auditing standards and it has done well.

But the key thing is that someone played a fraud we should not blame auditing or accounting for this. What we should say is that the process has failed, Mr Pai said, when asked to comment on financial irregularities at Satyam.

Meanwhile, Mr Pai said that India should reaffirm its commitment on full convergence with IFRS from April 1, 2011.

Full IFRS adoption will enable Indian companies to access capital globally at lower cost. It will increase credibility of foreign investors in balance sheets of Indian companies, which is very essential today. It will also make sure over a period of time that companies in India can tap into global pool of capital. Mr Pai said that trustees of the IASC Foundation would at their meeting later in the day with the Corporate Affairs Minister, Mr P.C. Gupta, and the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, underscore the need for full IFRS convergence by 2011.

We will possibly ask them to request large Indian companies to move to IFRS a year before the committed timeline, he said, highlighting that Infosys had already from this financial year (last two quarters) started filing documents with US regulators under IFRS.

Asia and countries in Oceania are going to form an important part of the global accounting and financial architecture community. India is complying 85-90 per cent IFRS. There are some non-compliance issues because the legislation is behind the curve. Our Companies Act needs to be modern.