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N Shyamasundaran
Connect:
With dual audit, get rid of statutory audit too
Dual audit, the audit by two separate audit firms as a remedy to improve the credibility of statutory audit, is worse than a disease. It is like a Two-Bench Supreme Court Judgement, where both the Judges may disagree with each other, leading to referring the matter to a Third Judge. The effectiveness of statutory audit is in question since decades, but nothing worthwhile was done to stem the rot. Mandatory rotation of audit firms was attempted several times in the past, but thwarted by vested interests. Independence of auditors or directors cannot be inculcated, but it should be encouraged. Honesty cannot be mandated, but built into the system. Let us underline the point that if an auditor closes his eyes to management’s wrongdoings, he is seldom caught and this is a single factor that encourages dishonest auditors. This is clearly brought out to the fore in the case of Punjab National Bank’s recent fraudulent loans and other nationalised banks’ Loan frauds.
06 May 2018, 19:01 IST
With dual audit, get rid of statutory audit too
06 May 2018, 19:01 IST