- The government has proposed significant amendments to existing regulations to enhance independence and accountability of auditors.
- Many auditors and auditing entities coming under the regulatory lens for alleged misdoings
- Suggestions for curbing five “threats” for the independence of auditors which pertain to self-interest, self-review, advocacy, familiarity and intimidation.
- economic concentration of the “Big Four” audit firms and the need to build the capacity of home-grown Indian firms that may need to be at par with global organisations in terms of audit procedures and manpower capacity, among other factors
- PWC, Deloitte, EY and KPMG are generally referred to as the ‘Big Four’, which operate in India through a network of local chartered accountants firms
- The paper has sought comments on whether the number of audits under one audit firm or auditor needs to be reduced
- Inspection of audit engagements and developing a ‘Composite Audit Quality Index’ to improve accountability of auditors and audit firms are among other proposals.