The committee was set up in September 2016 following representation from several domestic audit firms about the negative impact on them on account of various practices that lead to circumvention of regulations.
The government is examining recommendations of the 3-member expert panel on various issues related to audit firms, amid concerns over certain practices circumventing regulations. The expert panel, headed by Teri Chairman Ashok Chawla, submitted its report last month to the government, an official said.
Set up by the Corporate Affairs Ministry, the panel examined various issues pertaining to audit firms, including possible adverse impact from restrictive shareholder agreements. While the committee’s recommendations could not be ascertained, it had the mandate to examine whether there is an adverse impact on “Indian audit firms from restrictive shareholder covenants” and “through the manner in which audit rotation is being implemented by companies”. Another official said the government is examining the panel’s recommendations and would take a call in due course.
The committee was set up in September 2016 following representation from several domestic audit firms about the negative impact on them on account of various practices that lead to circumvention of regulations. Among others, the panel examined whether joint audit could be introduced in cases where there are restrictive covenants and other specified cases where there is a multinational audit firm as the auditor. “Several audit firms have represented about adverse impact on Indian audit firms due to the structuring of certain audit firms leading to circumvention of various regulations and imposition of restrictive conditions by foreign investors with regard to auditor appointment by companies,” the Ministry had said in September last year.
Chaired by Chawla, RBI Deputy Governor N S Vishwanathan and Jubilant Life Sciences’ Co-Chairman and Managing Director Hari S Bhartia were the other members of the committee. Chawla is former Finance Secretary and had served as Competition Commission of India (CCI) Chairman.