Capital market regulator SEBI is in the process of strictly complying with regulations for auditors and other valuers appointed by companies listed for auditing of financial results. In this direction, SEBI has proposed amendments to tighten the rules. Within 30 days of the draft, the opinions of the relevant parties have been sought.
Due to the flaws in auditing, many forgeries do not come under knowledge for many years. The scam of Rs 14,000 crore in Punjab National Bank (PNB), the country's second largest lender, could not even come under knowledge for many years due to lack in auditing. Considering the above facts, the responsibilities of the regulatory auditors as well as of Reserve Bank is being setting out.
SEBI has recommended for the authority to the Board of Directors (BoD) of the company to enable them to take appropriate action after investigating against the violation of any law, false certificate or report issued by auditor or auditing company. Merchant bankers, credit rating agencies, custodians, etc. are registered in SEBI. All these units are bound by SEBI rules. It will be mandatory for auditors to ensure that the certificates or reports issued by them are correct from every point of view. Auditors will be responsible to contact with the company's audit committee or compliance officer to report it in writing about the violation.
(Also read: ICAI introduces Unique Document Identification No. (UDIN) for CAs in Practice)
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