News Details- (Get Professional Updates on Whatsapp, Msg on 8285393786) More News

Audit reports of banks signed by deceased Chartered Accountants - Regulators

Posted Date : 11-Dec-2013 , 08:49:27 am | Posted By CASANSAAR print Print

Regulators suspect the audits of several banks to be out of this world— not because of their high quality but because they are signed by deceased accountants.

The authorities, who claim they are gravely concerned, will discuss the problem at the next meeting of the Financial Stability Development Council, an umbrella body of financial sector regulators. 

The authorities, who claim they are gravely concerned, will discuss the problem at the next meeting of the Financial Stability Development Council, an umbrella body of financial sector regulators.

The FSDC is chaired by the finance minister and has representation from the market regulator Sebi, the Reserve Bank of India and commodity markets regulator FMC, among others. 

"There are allegations that audit reports have been signed in the name of dead auditors. If at all there are any discrepancies found, the strictest action will be taken," a senior government official told ETon condition of anonymity.

The issue was initially unearthed by the finance ministry and the Reserve Bank has been made aware of it, said two people with knowledge of the developments. 

"There were some informal reports received by the government and the RBI was apprised of the issue," said one of them.

Another official said three instances of such violations were noticed. However, ET could not independently verify the nature of these allegations or which banks were involved 

Confidence may take a beating

"If required we will also get in touch with Institute of Chartered Accountants of India. The matter will be thoroughly investigated," said the government official quoted above. 

SK Agarwal, president, ICAI , said the accounting body has so far not received any complaints or communication from either the RBI or the finance ministry. "We cannot comment on any action until the entire facts are presented to us," he said. Bankers fear that such incidents can undermine the public's confidence in them.

"If it is a localised case, like that of a branch audit, then the damage can be limited but if it is about the entire bank, then rating agencies will be quick to downgrade the ratings which may have a multiplier effect," said an executive director with a state-run bank.

This development also comes at a time when Indian banks are sagging under the weight of bad loans — the gross non-performing assets of public sector banks rose to Rs 1.83 lakh crore at the end of the June quarter from Rs 1.55 lakh crore at March 31, 2013.

A senior banker with a private bank said such discrepancies can put question marks on the performance of a bank. "It may have been an error on part of the auditing firm but banks can come under the scanner on bad loans and other liabilities," he said. 

Category : ICAI | Comments : 0 | Hits : 2008

Search News
News By Categories More Categories