With ongoing probes into the IL&FS crisis highlighting the role of auditors in the fiasco, the Central government is now considering a revamp of the auditing process, making it more transparent, and auditors more accountable. 

“There is a general consensus that the way auditing is being done requires some serious rethinking. There’s a need to redefine the role of auditors and relook at the scope of the auditing process, making them more accountable,” a senior official of Ministry of Corporate Affairs (MCA) told TNIE.

According to MCA officials, the ministry, in consultation with National Financial Reporting Authority (NFRA) and markets regulator Securities and Exchange Board of India, will come with a fresh draft by the end of July this year. NFRA is the new regulator set up by the Centre recently for accounting and auditing firms.

The Companies Act, 2013, contains elaborate provisions regarding liability of statutory auditors in case an auditor contravenes those provisions willfully, with intention to deceive the company, its shareholders, creditors or tax authorities. However, the authorities feel that there must be stronger legal provisions against such auditors. The government might ask NFRA to relook into some of these provisions. #casansaar (Source - NewIndianExpress)