No threat to the Auditor`s Independence as per the ICAI President

The CA profession continues to rest on the foundation of ‘independence’, says the ICAI President Shri Prafulla Chhajed, asserting to the fact that the Auditor`s independence is not under any threat.

He, further stated that, there have been instances where Auditors resigned from various listed companies in the past due to differences with the management which signifies that no compromise(s) with the Auditor`s Independence have been done in such situations.

The President, ICAI further quoted that, “Independence has been our hallmark and we can’t compromise on it, and the ICAI will ensure that no member compromises on independence, which is the prime pillar of the profession.”

He also stated that, there have also been several instances of resigning as statutory auditors of various auditing firms, including the Big 4, when they felt that the management is not sharing complete information about the financial affairs of the company.

The President, ICAI maintained that adequate mechanisms exist within the CA Institute for proper monitoring and review of the work of members. There is peer review mechanism, financial reporting review board (for listed companies) and Quality Review Board which does the needful as regards monitoring and ensuring quality of work.

He also did not see any merit in housing any of these mechanisms outside the ICAI, say within the confines of the newly set up National Financial Reporting Authority ( NFRA) pursuant to Section 132 of the Companies Act, 2013. However, he declined to comment on NFRA and whether the CA Institute’s regulatory powers now stand clipped with the setting up of the new Authority. He also declined to comment on the likely regulatory action on the auditors of IL&FS, stating that the matter too was sub-judice. It may be recalled the CA Institute had suo motu initiated disciplinary investigation on certain Indian affiliates of the Big 4 involved in the IL&FS Group audit.

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