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Our Bureau

New Delhi, Feb. 4 The auditing profession regulator – ICAI – must take further measures to build public confidence in the profession, the Union Corporate Affairs Minister, Mr Prem Chand Gupta, said here on Wednesday.

The Satyam Computer Services scandal has brought to the fore the role of statutory auditors – Price Waterhouse – in the financial bungling. There has been a backlash against auditors in the wake of Satyam episode and the ICAI is still grappling with the dent on the image of the auditors.

“ICAI has taken some measures. You must take further measures,” Mr Gupta said at the 59th annual function of the Institute of Chartered Accountants of India (ICAI) here.

So far, the ICAI has issued a show cause notice to the audit firm – Price Waterhouse. The audit firm, however, has sought more time to respond as the concerned accountable persons were not in a position to respond to the notice.

He said the institute should not show any laxity in enforcing highest ethical standards in the profession. Mr Gupta said technical excellence and adherence to ethical standards were critical for growth of any profession.

The Minister stressed the need for auditors to keep in mind the “public interest” while performing their audits and discharging the role of certification of financial statements. The law had to be observed in letter as well as in spirit, he said.

Mr Gupta said the Government was committed to ensure the effective functioning of regulatory structures, especially those put in place in 2006 for reforming the disciplinary mechanism of the profession.

“Regulatory reform is an ongoing process. We will continue to keep the process going,” he said, adding that the Government was committed to bring in structures that were capable of handling issues of a modern economy.

Meanwhile, Mr Anurag Goel, Secretary in the Ministry of Corporate Affairs, said the auditing profession must rise to the occasion as one and meet the new challenges with conviction.

The outgoing ICAI President, Mr Ved Jain, said the Satyam episode had come as a rude shock to the institute. “The backlash against auditors in such a situation (Satyam scandal) is natural. We will do everything that is expected of a regulator of a profession,” Mr Jain said.

More Stories on : Accounting Standards | Corporate Governance | Satyam Computer Services Ltd

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