Under scrutiny

Auditors need to be reined in, but not through over-regulation

The Reserve Bank of India (RBI) recently announced that it was tightening rules for statutory audits of banks and that it would take action against auditors if they were found responsible for any lapses in financial statements or audit reports of banks. This is only one of several recent developments that have led to auditors in particular, and accountants in general, becoming wary about misstatements in corporate accounts. The establishment of the National Financial Reporting Authority (NFRA) was cleared by the Cabinet in March. This will be the first independent regulator to oversee the accounting profession, which has never been