Violations among auditors more of an EXCEPTION - ICAI President
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The Institute of Chartered Accountants of India (ICAI) has extensive powers to take action against erring members and can even bar from practising the profession.
In recent years, there have been instances of alleged violations by auditors at companies audited by them.
While admitting that there have been violations, ICAI President Manoj Fadnis said such incidents are "more of an exception".
"If you are looking at a base of more than 2,50,000 members, of which 50,000 are in public practice, the violations would be there in very very few cases and wherever the violations are noticed, the institute's disciplinary committee takes stringent view of the whole matter," he told PTI in an interview.
According to him, majority is always complying with the law and ethical requirements while there is a robust disciplinary mechanism to deal with violations.
ICAI's disciplinary committee has disposed of at least 100 cases since February 2015. At the start of February last, there were 129 cases.
To speed up disposal of disciplinary cases, the institute is planning to conduct hearings for them through video conferencing.
Meanwhile, the institute is working with the Central Board of Direct Taxes (CBDT) with respect to keeping a tab on the number of tax audits that can be done by an auditor.
A chartered accountant can sign up to 60 tax audits in a financial year.
"There was no mechanism for us to detect who has done how many audits. It was our institute that suggested to CBDT that there should be electronic filings of tax audit reports because we were coming across situations where people were violating it," Fadnis said.
Cases, where an auditor has breached the limit in terms of tax audit assignments, are also reported to the institute's Disciplinary Directorate, for further appropriate action, within the framework provided in the Chartered Accountants Act and misconduct rules. (PTI - Economic Times)
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