The government is working to improve the regulations for auditors and corporate professionals as it looks to strengthen the “fabric of corporate governance” in the country, Union Minister P P Chaudhary said.
Some auditing entities have come under the scanner of the Corporate Affairs Ministry following various complaints. Besides, the ministry is also examining recent instances of auditors resigning from companies on various grounds, reported PTI.
He reportedly said the ministry is working closely with professional regulatory bodies under it to “improve the regulations for the auditors and corporate professionals”.
According to him, the ministry is looking to improve the fabric of corporate governance in the country.
The notification for setting up the National Financial Reporting Authority (NFRA) has already been issued and it would act as an independent regulator for the auditing profession, the report said.
“The NFRA can investigate chartered accountants and their firms, and its powers extend to listed companies and large unlisted public companies… recruitment of chairperson/ members for the NFRA has already begun,” the Minister of State for Corporate Affairs reportedly said.
Earlier this month, a senior official had said the ministry was inquiring into around 10-15 complaints related to auditors.
About instances of auditors resigning from companies citing lack of access to financial information and other issues, Chaudhary said the ministry is examining such recent cases of resignation.
“However, this is a regular practice and too much should not be read into such cases,” he was quoted as saying.
In recent months, scores of auditors have left audit work of companies, mostly listed ones, citing various reasons, reported PTI.
The Companies Act, 2013, contains elaborate provisions regarding liability of statutory auditors in case an auditor has contravened the provisions knowingly or willfully with the intention to deceive the company or its shareholders or creditors or tax authorities, the report said.