Auditors for Nifty, Sensex firms to be reviewed

Written by Markets Bureau | Mumbai | Updated: Jan 11 2009, 04:10am hrs
The first salvo for effective disclosures, tightening of accounting standards and checking for more skeletons in India Incs closet, has been fired by the market regulator Securities & Exchange Board of India (Sebi).

After the Satyam Computers fraud, which Sebi chairman CB Bhave termed as horrific, the Sebi Committee on Disclosures and Accounting Standards (Scoda) has recommended that a peer review of auditors will be conducted on companies in the NSE Nifty 50 and the BSE Sensex.

Sebi has accepted this suggestion and said that some of the companies outside the indices will also be randomly chosen for a review. The Scoda met in Mumbai on Friday to discuss the course of action required to be taken by the regulatory agencies to boost the investor confidence in the financial disclosures made by listed entities. In this context, after detailed deliberations, the Scoda recommended that a peer review of the working papers (relating to financial statements of listed entities) of auditors would be conducted, said the Sebi statement.

Sebi would now be preparing a panel of auditors for this exercise. And this review would be in relation to the last quarterly results and the last audited annual financial results. This exercise would be initiated after the third quarter results are published and is expected to be completed by end of February 2009.