Rotate auditors and CFOs, say experts

MG Arun
Posted: Monday, Jan 12, 2009 at 0110 hrs IST
Updated: Monday, Jan 12, 2009 at 0110 hrs IST

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Mumbai: know what is going on inside the company? It would be better to have people with some knowledge of the way the company functions,” says he. Also, the appointment of independent directors should be strictly by non-promoter shareholders to ensure these things are not done out of favour, he adds.

Chandiok says that in the present case, it is important that the government acts quick so that India can send a message to investors that the country is second to none in respect of regulatory systems. “If the US regulators get into the act quicker than the Indian government, it will have a negative impact on the way the Indian regulatory system is perceived,” he adds....

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» import

Posted by vidya sagar rao on 2009-03-03 23:44:01.925897+05:30
This is absurd. The regulators should not try to micromanage private businesses. CFO should be left alone. the company should have a right to appoint their own CFO. where ever a company is listed and public fund is involved the auditors should be appointed by the regulators like the SEBI, RBI C

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» Rotate Auditors

Posted by Barun Kumar Ghosh on 2009-01-17 01:01:49.566557+05:30
Not only the statutory auditors should be changed after every 3/4 years, they should be appointed in the listed companies by the regulatory authority like SEBI. We have this system in force sucsessfully in case of apppointment of statutory auditors in public sector undertakings and nationalised banks and all insurnace companies.Even there should be a system of supplementary audit, if needed as in case of PSUs in India. Even in Bhutan, there is system of changing auditors after every 3 years.

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» Rotate auditors and CFOs, say experts

Posted by PAWAN KUMAR on 2009-01-13 09:03:59.420923+05:30
Auditor must be rotate every year.Otherwise auditor may not be independance.

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» Rotation of Auditors

Posted by M Lakshmanan on 2009-01-12 20:08:26.402203+05:30
Rotation of Auditors will not destroy the quality of the audit as feared. Take the case of audit of Public Sector Banks and Public Sector Undertaking for whom auditors are apppointed by the government by rotation only. In fact this system has given the auditors freedom of reporting as they need not look upon the management for thier reappointment. This system can be extended to all companies.

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» taking right steps

Posted by T.A.P.Krishnan on 2009-01-12 18:21:11.592184+05:30
The suggestions to change auditors, CFOs are merely ieas out of a knee jerk reaction to the developments recently. But these are not practicable and would have far more complexities if implem,ented.Nothing but very stingent rules and regulatins can help. Hope we can think on these lines

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» How to avoid it next time

Posted by Vinod on 2009-01-12 16:31:39.796118+05:30
I think the immidiadiate doable thing is the appointment of joint auditors (minimum two).rotation of Auditors has been debated for long time without any consensus.Further appointing outside agencies for internal audits is a very usefull idea. I think SEBI should consider

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» Rotation of Auditors

Posted by Nishant Kumar on 2009-01-12 16:24:37.714381+05:30
Mr. Damodaran has given substantial suggestion regarding auditors. The auditors be rotated every four years. This would restrict auditors to window-dress the discrepancy or manipulation done in company's accounts.This also ensures auditor exercise competency in doing audit.Auditors of listed company would be appointed by Ministry of Corporate affairs as in the case of PSU,same is done by CAG.

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» SATYAM

Posted by PANKAJ SHARMA on 2009-01-12 15:46:46.278758+05:30
Audiotors should not be appointed by the auditee itself, to be independent in true sense they should be appointed by a regulatory body SEBI,ROC etc. as is practice in case of PSB auditors which are appointed by the RBI.

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» Financial Systems Integrity

Posted by Gopal Krishna Vadlamani on 2009-01-12 09:50:46.070196+05:30
Integrity of the financial systems generating the Profit

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