The government is considering tightening of norms for auditors, including direct reporting of qualifications of accounts by auditors to the registrar of companies, strengthening of audit committees and random checks of balance sheets.
Department of company affairs (DCA) secretary V K Dhall told Business Standard the proposals were under consideration and a decision would be taken soon.
Another proposal on random checks envisages the establishment of committees at the level of the registrar of companies, which would consist of representatives from the government, auditing fraternity and industry and trade bodies to go through the balance sheets of various companies.
Dhall, however, said there was no proposal to take away the regulatory powers of the Institute of Chartered Accountants of India (ICAI) or the Institute of Company Secretaries of India (ICSI). He said the government was considering various ways to tighten the regulatory framework and enhance penalties. A decision would be taken in consultation with the ICAI and the ICSI.
On the observations of joint parliamentary committee (JPC) on stock scam that the ICAI has only penalised two of the 22 auditors indicted by the previous JPC, Dhall said the DCA has requested the ICAI to speed up the exercise.
The ICAI, on its part, maintains there are 17 cases in which it has to take disciplinary action. In the absence of the Reserve Bank of India issuing guidelines, the institute can't go ahead with the probe. It said it had disposed of over half-a-dozen cases and could find auditors committing an offences only in two cases.
