NFRA Chairman's Tongue Lashing to ICAI over 'Lagging' Standards, Criticises 'Myopic' Approach: Taxsutra

Moneylife Digital Team 08 October 2024

Investor Interest

In a tough and straight-talking speech, Ajay Bhushan Pandey, chairman of national financial reporting authority (NFRA) gave a clarion call to chartered accountants (CAs) to adopt global auditing standards, says a report from Taxsutra.

Addressing a webinar hosted by NFRA, Mr Pandey says, "We cannot conveniently say that what we are doing is the best... that is a myopic view... good is always the enemy of the best..."

Opining that Indian auditing standards have been lagging for more than two decades, the NFRA chief says that the CA profession in India cannot dream of creating a global firm without first adopting and following international standards.

Mincing no words, Mr Pandey further lamented that if the audit profession is not going to strive for the best, how will it compete with global firms?

The NFRA chairman also expressed his frustration on the current situation vis a vis auditing standards, which he says is not a 'happy' one. He also called for standards on quality management (SQMs) to be issued as a standard and to be made an integral part of auditing standards.

During his address, Mr Pandey also briefly touched on the SA600 controversy, commenting that the standard was of 2002 vintage, allowing auditors to escape responsibility.

Comments

User

prasanna

7 months ago

Its high time we CAs do some introspection

smadhu864

Replied to prasanna comment 7 months ago

I appreciate your positive response...

smadhu864

7 months ago

I want any CA professional or any law abiding citizen based in Hyderabad to come forward to lodge complaint against Union Bank of India and erstwhile Andhra bank for abetting crime and hiding dark secrets in their cupboards . I have documentary evidences and also call records to prove that there were blatant violations and gross procedural lapses right from the sanction of loan to disbursements from term loan accounts of a healthcare entity based at ECIL area of Kapra Municipality , viz:Universal Medicare Services in a leased premises of Raghavendra Hospital now being run as Srikara Multi-speciality hospital . Bank management is trying it's best to protect its officials , most of whom have retired in senior executive cadre .

sunilhansaria

Replied to smadhu864 comment 7 months ago

if you 100% sure , go through social media, tweeting to the NFRA, PMO, FM,...and thereafter also take the service of an advocate. Almighty helps those who help themselves first....be sure why anybody be coming to you and for what...Your own action only helps you....we too have fight out many battles against authorities but by our own way and directly dealing with them...and now u have the biggest way out in form of social media...all the best

smadhu864

Replied to sunilhansaria comment 7 months ago

Thanx for your response and words of good advise. I have been lodging Complaints with all the grievance redressal fora for the last 6 yrs ..including the CPGRAMS, which is supposedly controlled by the PM's office. But , even their style of functioning is also not effective. They depend on the feedback from the bank against whom I lodged complaints. Naturally the bank on its part is trying it's best to save its own skin and its errant and negligent officials. The Chief Vigilance Officers of the bank , without maintaining confidentiality, seek information from the Operating office, where by result is zero....

rama.sada2016

7 months ago

Simple we need to make more CAs and increase the supply. It's not necessary to make exams tough because people need to catch up with life. And in the process quality is compromised as they also need to survive.

smadhu864

Replied to rama.sada2016 comment 7 months ago

Madam, the very purpose and objective of having an AUDITORS is to do their job diligently , honestly and most importantly without any prejudice. Compromising on quality (perfection and credible reporting) for the sake of survival in their profession is nothing but abetting crime as is evident in most of the cases of NPAs...

pereiramarie081

7 months ago

It is CA vs. Banking. While banks ask for increased stocks to finance enhanced limits. For CA it is increasing profits.

sunilhansaria

7 months ago

It's very true . But an Auditor on both side sharp edged swords as a sandwich.. one side political interference and the other side bureaucrats aka the bank management...and everybody in the system wanted to share a bootie ..

smadhu864

Replied to sunilhansaria comment 7 months ago

But, when a big NPA is reported and criminal charges are framed , nobody will come to the rescue of Auditors or bank officials. Then why invite trouble by bowing down your head to politicians or anybody who is messing up with the system....!!!??? As long as political interference is there , NPAs will never continue to haunt us...

smadhu864

7 months ago

Sir, without any offence to any authority, while I fully agree with your observation that standards of auditing in India is lagging, I wish to bring to your notice that, the lax and casual approach of our auditors is the main reason for most of the bad loans of PSU banks . Is it possible for an account to go bad, if the internal or statutory auditors diligently apply their mind and detect signals of stress or irregularities in the initial stage before it becomes an irrecoverably bad NPA..??? I have lodged multiple complaints with the Union bank Chief vigilance officers , then to the DFS and also to NFRA against blatant violations and gross procedural lapses at erstwhile Andhra Bank, Kapra , Sainikpuri branch, now merged entity of Union Bank of India, ECIL area , Hyderabad since 2019. But the bank management is deliberately misleading DFS to protect their errant officials. If you are really interested to know the facts, you may check it yourself and call for simple audit, you don't need forensic audit. They distributed moneys from term loan account to fictitious vendors including chit-fund companies...!! I stand by my statements sir....you can reach me on mobile :9440191217...thanks and regards....Madhusudan Sabbella, Visakhapatnam.

tolearnistolive87

Replied to smadhu864 comment 7 months ago

There are inherent limitations to audit. It only provides for reasonable assurance to be obtained.

smadhu864

Replied to tolearnistolive87 comment 7 months ago

Sir ..thanx for your not only dignified but also diplomatic response...! By saying so I do not intend to offend you.. Auditors ' job is , no doubt, thankless to say the least, but their professional competency is meant not just " fact checking " or "detect faults" , but also corrective steps... In the instant case which I quoted pertains to my own family member and bank management openly blackmailed and threatened us and put a precondition that all complaints against their officials must be withdrawn for settling the account as OTS...the panel advocate and the loan recovery department at UBI, Secunderabad resorted to extremely unethical methods . DFS on its part is not exercising it's discretion to call for independent enquiry , leave alone forensic audit, which is nothing but total collapse of principles of Corporate governance. I am contemplating to get the cases opened very shortly at Telangana HC..regards...

ykanand

7 months ago

People who comment here, have no knowledge on auditing standards but judge and comment that ICAI is inferior. Knowledgeable people know the value of hardwork and respect others work. Any deficiencies in their work are politely communicated. If you have any better ideas, please forward them and contribute to the auditing profession. Profession is more important than ICAI or any other institutions.

a.rajarammohan

7 months ago

I am a member of the institute for nearly 40 years. I also feel that the standards have come down. Even the self service portal is half backed. I sent mail to then president 3 years back about the sorry state of the portal and I offered my self to help in revamping and better user friendly system but there not even an acknowledgement leave alone a due reply. Ten days back I was paying my fees in the portal, it took me 39 minutes to complete. Horrible for an institution which is boasting itself. They are running so many courses, CPE courses. I am not finding any thing interesting and all courses are only knee deep.

josevjoseph7

7 months ago

No doubt, auditing standards have to improve and the auditors be made accountable for omissions, white washing of accounts. Auditors of companies especially listed ones will have to be more accountable. They shall not compromise in any manner in respect of finance and accounts, and other areas covered under audit.

smadhu864

Replied to josevjoseph7 comment 7 months ago

Yes, auditors are made accountable for their lapses , as it happened in Satyam scam. But, ultimately the who will bear the loss arising out of lapses of the Auditors....!???

sanjay.kumbhat63

7 months ago

Thank you NEFRA. It is time to authorize others professional institute for attention fiction. The ICAI is a institute who is only working for themselves and on one else.
They are least bother to adapt international standards as we have seen in SA 600. THEY are only concern with themselves.Tje audit quality is being decorations day by day. The CAs are only making money by improper repotting and accommodation of their clients
THANK YOU NEFRA

rajveerca1993

Replied to sanjay.kumbhat63 comment 7 months ago

I think you are a CMA.
CMA qualification is like Advance B com. You people don't know the depth of Accounts, Tax, Cost and Audit. So please don't comment.

If you think I am saying it wrong. Sit with any CA in practice you know and have a discussion of any topic related to practice.
You will assess your position.

So don't comment unnecessarily if outside your knowledge pocket thing.

bripan1990

Replied to rajveerca1993 comment 7 months ago

If you know that only CAs knows everything then you experts CAs sit with a young newly qualified even not in practice CMAs your entire arrogance will be washed out.

90% of the passed out CAs are just doing copy paste of old audit reports and also remember these CAs are dependent on those advance bcom qualified as they do the tax audit and you people are selling your UDINs by charging just 1K to 2K per udin.

amesohai

Replied to rajveerca1993 comment 7 months ago

Yeah...that's why CAG raise so many comments during their supplementary audits on statutory auditors report. CMAs and CSs also don't know how t act as Dalals and middlemen for greasing palms and creating fake companies for GST evasion. We Indians are really proud of you..salute

nandusyam

7 months ago

Indian accounting standards require improvements.... But here our ca professionals reporting requirement are so large under various enactments...some global companies come here and use cheap labour here and throgh back door snatch audits of big cos... Icai top brass also help them so that they can share the loot.... Nfra is doing good work now..

bripan1990

Replied to nandusyam comment 7 months ago

Strict regulations on the professional institutions and create competition by allowing other similar professionals may bring transparency in the system.

Our govt it self is influenced with the so called ICAI.

sourav1108

7 months ago

First reform political funding otherwise define fraud standards. Joker shouting as paid idiot of Modi.

nandusyam

Replied to sourav1108 comment 7 months ago

Cheap comment....

debashismalik1978

7 months ago

I am hons garaduate. I belief tht indian Audit qulity is not best due to best system and govt. Negligeny. But tody we enter the new era of digitition so we need concrete system for audit then our country will be very strong in Economy