HIGH LEVEL COMMITTEE TO LOOK INTO COMPANY ACCOUNTS
AND AUDITOR-COMPANY RELATIONSHIP
The Minister for Finance & Company
Affairs has constituted a high level Committee to look into certain
issues pertaining to company accounts and auditor-company relationship.
The Committee would be headed by Shri Naresh Chandra, former Cabinet
Secretary and Ambassador to USA. The Committee would also have
other eminent citizens, representing professionals from various
disciplines like the corporate sector, accountancy, company secretaries,
financial institutions and economists.
Other members of the Committee
include Shri Ashok Chandak, Chairman, ICAI, Shri Aditya Vikram
Lodha, Chartered Accountant, Shri R. Krishnan, former President,
ICSI, Shri M.K. Sharma, Vice President(Legal), Hindustan Lever
Ltd., Smt. Kalpana Morparia, Dy.MD, ICICI, Shri Mahesh Vyas, MD,
Centre for Monitoring Indian Economy (Economic Analyst), Shri
Onkar Goswami, Economist and Shri Rajiv Mehrishi, Joint Secretary,
DCA.
The Committee would look into
the entire gamut of issues relating to auditor-company relationship
with a view to ensuring that this relationship remains professional.
It would also examine connected matters such as the independence
of auditors, restrictions on non-audit consultancy work by auditors,
rotation of auditors, proposal for random scrutiny of company
accounts, and system/or regulation of the profession of Chartered
Accountants, Cost Accountants and Company Secretaries, and also
the role of independent directors. The Committee would submit
its report to the Ministry of Finance & Company Affairs with
recommendations. Further action on the recommendations of the
Committee will be taken by the Department of Company Affairs.
The Committee
has been set up at a time when the corporate world has been troubled
by disclosures regarding accounting practices of some global corporates.
However, these issues have been of concern to us even before the
accounting irregularities had been reported. Well before these
developments, the Department of Company Affairs has been considering
reforms required in this area and has been debating
certain proposals in this respect.
In a recent speech in Parliament,
the Finance Minister said "….we are considering a host of
other measures to ensure transparency and full disclosure in corporate
accounts as also to strengthening statutory audit provisions".
The high level Committee has been set up consequent to the above
announcement by the Minister for Finance & Company Affairs.
The Committee’s recommendations will help in strengthening the
credibility of the system and protecting the interests of various
stock holders including retail investors.
