The Reserve Bank of India should ask all commercial banks to send their confirmation letters of bank account balances only to the statutory auditors and not to the company concerned. This recommendation forms part of the second report of the ICAI’s High Power Committee on Satyam fraud, the CA Institute President, Mr Amarjit Chopra, told Business Line here.
The second report was submitted to the Corporate Affairs Ministry a few days ago. The audit community has come in for some criticism on the audit failure in detection of falsification of current account balances in the Satyam Computer Services case.
It is being claimed that a procedure of directly sending the confirmation letters to statutory auditors could reduce the scope for falsification of bank account balances.
Meanwhile, in the second report, the High Powered Committee has also suggested that the regulatory framework on credit rating agencies, valuation companies and financial analysts should be further strengthened.