Public Perception on Role of Audit Professionals is Different from the Reality

Never in the past has the role of the auditors come under so much of intense scrutiny as it has today, especially in the post IL&FS and PMC Bank Crisis. In both cases, it was alleged that the financial reporting lapses were not red-flagged by the statutory auditors, which eventually led to a systemic crisis-like situation for the Indian economy.
 

Thus, Business Standard organized Smart Business conclave in association with the Institute of Company Secretaries in India (ICSI) – Bengaluru chapter last week. Several panellists were of the view that the reality in many of these cases are different from what the public perceptions are. Shyam Ramadhyani, a veteran Statutory Auditor, and Partner of Chartered Accountants firm BK Ramadhyani & Co. LLP, said as per the Companies Act, there are certain standards that have been laid down for the auditors. “If there has to be a change in the way audits have to be done, the responsibilities are different than what it is perceived to be.”
 

V. Sreedharan, Senior Partner at V. Sreedharan & Associates, Company Secretaries, and a well-known Secretarial Auditor highlighted the need of the people in the audit fraternity to learn new skills, in the wake of applications of new technologies such as AI, machine learning, Big Data & Analytics and robotics by the government as well as the clients. Giving an example of how the Ministry (MCA, Finance Ministry) and even the regulators are now extensively using AI and Data Analytics in several of their activities, he said, those kinds of tools will make audit professionals stay much more careful in the pursuit of proper audit and proper audit process. Cost auditor and partner at PSV Associates, BR Prabhakar highlighted the major role that the cost auditors play though mostly their reports are for the consumption of the management than public.