Will we see a company audited by two audit firms at the same time? That looks a possibility from what the Union Minister of State for Corporate Affairs and Minority Affairs, Mr Salman Khurshid, said on 29.03.2009 while Addressing a meeting of the Confederation of Indian Industry (CII), Mr Khurshid said, in the context of making the audit function effective, that there had emerged an idea of dual audit so that there are two companies (firms) in a sense keeping a check on each other.
Although leading auditors that Business Line spoke to seem to think that Mr Khurshid was referring to “joint audit” — where two firms split the work between themselves — the Minister was clearly referring to two audit firms duplicating the work so as to keep a “check on each other.”
Mr Khurshid said that if the Government and the industry approached the issue with an open mind “innovative solutions can be found” to meet the aspirations of the people.
He did say in his speech that the Government was not “overly concerned about one or two major cases going wrong” — an allusion to the Satyam episode. However, later in a chat with journalists, he said that the Government was giving the Satyam investigations “high priority, so that the world knows that we are not only back on our feet quickly after a knock but we also make people accountable (for their wrong doings).”
Clearly, the Satyam episode is influencing the thinking on the role of auditors. The Minister seems to have meant as much when he said that the Government had looked at countries that have mandatory rotation of auditors.
In India, there are two views about it, he said. While there is a consensus that there should be rotation of partners of a firm in auditing an entity, there is opposition to the rotation of firms themselves.
In another context in the speech, he named nominations, remunerations and audit as the three areas where there has to be “transparent, independent and objective assessments made within a company.”