The Institute of Chartered Accountants of India (ICAI) will submit its report against unethical practices by big four auditing and consulting firms — Ernst & Young, KPMG, Price Waterhouse Coopers and Deloitte Sells and Heskins — to the Ministry of Corporate Affairs in ten days.
These multinationals entered India as consulting firms, but later started auditing work as well. This report also highlights how these practices can be controlled. Amarjit Chopra, president ICAI, said that the ICAI was not after these firms, but were ensuring that laws were followed.
“The Satyam fraud, followed by the IPL scam had brought to light how these firms were into surrogate practice of auditing. To unearth irregularities and ensure that such practices are not repeated, we have suggested certain measures to the Ministry of Corporate Affairs,” he said.
Chopra also added that ICAI has also advised these firms not to engage in “shopping for small but strong local auditing firms, as this is not desirable”. “Deloitte has already agreed to this and we are advising the others that they can do hand-holding, but should stay away from taking over small firms,” he added.
“The emphasis in ICAI has been in bringing greater accountability in the profession and to uphold the values. In case of the chartered accountant firms having audited the records of the IPL teams, too, we have decided to proceed and take action against those ICAI members who did not follow the prescribed norms of auditing. We have questioned the auditors and franchisees of six IPL teams, and in case of two franchisees, we have found that the auditors did not follow the accounting standards and best practices,” he said.