In accounting fraud cases such as Global Trust Bank (GTB) and Satyam Computers Services Ltd (SCSL), only partners are being punished, while the firms, in whose name and brand equity the services are sold, are seldom held accountable.

However, experts feel some mechanism should be put in place where the audit firms could also be made more accountable.

Investors gain confidence in the accounts of the company based on the stature of the audit firm, and not on the partner. Even the partner who will audit the company is not known when the AGM ( annual general meeting) appoints a CA. The firm should be held equally responsible, said A. P. Bakliwal, chairman of The Bombay Shareholders Association.

Asked how the Institute of Chartered Accountants of India (ICAI), which is not empowered to handle CA firms directly, can handle such cases, Bakliwal, who is also a chartered accountant, said, If law does not provide for such action, then it calls for a change of law.

The top four accounting firms KPMG, PricewaterhouseCoopers (PwC), Deloitte Touche and Ernst & Young (E&Y) hold out to the companies that they are part of the Big Four audit and accounting firms globally and charge in multiples of that charged by Indian firms.

Responding to a query on the CA firms responsibility, Rajendra Chitale, managing partner, MP Chitale & Associates, said, It may be advisable to evolve an appropriate framework that would render audit firms more accountable for the responsibility they take, in the minds of the investors and regulators.

The Chartered Accountants Act and ICAI regulations recognise only individuals as members and do not treat a partnership firm ( of its members) as culpable for professional misconduct of one of its partners.

S. M. Khinvesra, partner, Chhajed & Doshi said, The firm is responsible for the civil action to third parties ( stakeholders of companies such as shareholders, suppliers, customers creditors, employees etc), who rely on the accounts signed by the partner on behalf of the firm, since every partner is an agent of the firm as per Section 18 of the Indian Partnership Act, 1922.

When contacted, Uttam Prakash Agarwal, president of ICAI asked, Did any agency probing Satyam Computer put any misdeed on record so far? Let it come on record first. Chitale also said that the market regulator Securities and Exchange Board of India (Sebi) should be empowered to maintain a negative list of audit firms that cannot be appointed as statutory auditors, and mandate it through the listing agreement of stock exchanges.

Initially, this list could include names of CA firms, if any, that are proscribed by other regulators such as Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (IRDA) or the Comptroller and Auditor General (CAG), Chitale added. Thereafter, any audit firm, which is determined by Sebi to be unfit or improper based on criteria laid down in consultation with ICAI, could be added to the list, Chitale said.

In India it is difficult to pull up accounting firms through court, but the class action suits in the US will bring out the real depth of the issue, said a leading corporate advocate.

A class action suit is a legal initiative taken by group of investors or other affected parties where the fee payment will become due only after the case is won.

In class action suits filed in the US, cases were filed against the global parent, regional and national (Indian) units of PwC in Satyam Computer case.