The CA Institute’s second and final report on the Satyam scam and the role of the company’s statutory auditor in that accounting fraud was submitted to the Corporate Affairs Ministry on Monday.While ICAI officials were tight-lipped about the contents of this report, indications are that the audit profession regulator has recommended strict punishment including imprisonment to auditors who are found to be associated with any accounting frauds.
The Central Council had, recently, approved the second report, sources in the CA institute said. The ICAI’s High Powered Committee, set up at the Government’s behest soon after the Satyam scam came to light had submitted its first report to the Ministry of Corporate Affairs on July 17 last year.
Meanwhile, the ICAI is likely to make recommendations in the coming weeks to the Government for further amendments to the CA regulations. Indications are that the audit profession regulator would recommend changes in regulations to empower the CA institute to punish not only the concerned audit partner, but also the audit firm in situations of audit or accounting frauds.
Under the current regulations, the CA institute or its disciplinary committee cannot take penal action against any audit firm for involvement of a partner in any accounting fraud.
What are the basis of this report. The second report have submitted to Government many months ago. Now its a turn of recomendations of the council over the issue. Probably Its the recomendations that has been sent to government.I also failed to appreciate this report as it is talking about recommendation of strict punishment including imprisonment to auditors who are found to be associated with any accounting frauds.Through out the recomendations , the same is not there. Rather ICAI has suggested that auditors be not put to imprisonment with the lodging of a FIR of any fraud. Auditors shall be subject to any legal action as and when found guilty.Moreover report of Second part has nothing to do any recomendation. Its just on the Multinational firms opereport rating in India.The first part of HYC is just cut , copy paste of the Chargesheet of CBI, SFIO etc.
There is not much in the reports.
The icai only making laws , they are not keen to punish members,the code of ethics does not provide the stricter action against the member of icai. I appreciate the effort of icai by suggesting government about impressionist of auditors.there are so many scam like satyam in India but not yet come to the light.i hope future of this auditing profession will get secured.
It is an indicator of “change” in the culture and working of the ICAI that it “has recommended strict punishment including imprisonment to auditors who are found to be associated with any accounting frauds”. This change is a certain and definite proof of the darkness prevailing at the top levels of the Institute until the new president took over. There must be an enquiry into the complicity of the immediate past councils to go deeper into the filth still obtaining. Younger members who keep away from its affairs and are discouraged by the sheer money power employed in its elections must now be encouraged to take active interest to break the vested interest of certain people who in one or the other capacity are permanent fixtures of the institute’s power structure for two decades.