There is also a move to rate auditing firms. Sources said auditing firms can be treated like companies, which means rating by agencies to bring about better governance.
The process of framing regulations for peer review of auditors will start this financial year, sources in the auditing industry said. The objective of putting in place a framework for peer review is to ensure quality of audit and also judge the independence of auditors in their assignments. A number of countries already have in place regulations for peer review of auditors.
The main objective is to ensure that in carrying out their professional attestation services assignments, the auditors comply with the prescribed standards.It is directed towards maintenance as well as enhancement of quality of attestation services and to provide guidance to members to improve their performance and adhere to various statutory and other regulatory requirements. Attestation services involve the auditing or verification of financial transactions, books, accounts or records, or the preparation, verification or certification of financial accounting and related statements.
However, they don’t include management consulting engagements, representing a client before the authorities, engagement to prepare tax returns or advising clients in taxation matters.