Today, when a new member comes in the practice, there is very little scope of work for him more particularly for members practicing in small cities.
There is need for generating the practice work for new members and for the members practicing in small cities. There should be assurance of getting minimum practice work.
This is possible only when ICAI, our Council Members takes genuine steps in this regard by making empanelment for Statutory Audit of Companies and Tax Audits of other entities on the same pattern following in allotment procedure of bank audits.
Proposed Empanelment to be made:
1. For Listed companies to be made by SEBI
2. For Private/Public Ltd. Companies to be made by the ROC
3. For Tax Audits to be made by CBDT or Chief Commissioner of the region.
4. Any other audit work which is large in volume and under one authority, by that
Authority, not by calling tenders or quotations.
This is also necessary for following reasons:
We read two words in auditing one is Statutory Audit and other is Independence of Auditors
Statutory Audit: a statutory audit in true sense is when an auditor is appointed by the statutory body/authority. Auditor appointed by the board of directors or the assessee or owners, is not statutory auditor it may be internal auditor.
Independence of Auditors: freedom of the auditors will be maintained only when the auditors do not have any pressure form the assessee who is appointing them. It will be possible only when auditors would not be appointed by the board of directors or assessee itself. Otherwise Satyam like episode will continue in future.
Benefits to Members/Institute:
- Fees level will be improve, as Fees will be decided on the basis of turnover criteria, by the Authority allotting the audit assignments.
- There will be no competition for Under Cutting of Fees by the Members.
- There will be no undue pressure from the Board of directors or clients to whom auditing as in case of Satyam.
- There will be improvement in keeping of books of accounts or other statutory records up to date, as the client does not know who will audit his books.
- There will be improvement in image of the auditors and reputation of the Institute at large, which is going down after SATYAM like scams.
- There will be practice work for new members who start his practice as will as for members who practice in small cities.
Dear friends, as you know election process in the ICAI is on full swing and it is right time that we take promise from our CC & NIRC candidates for implementing the above agenda as earliest. This is not an impossible task if our leaders put their efforts honestly.