ICAI plans to tighten rules on auditors’ tenure

Shaken by the alleged “inaction” of Satyam Computer’s auditor Price Waterhouse, the Institute of Chartered Accountants of India is planning to push for a cap on the tenure of a company’s auditor. The institute is also looking into the possibility of issuing guidance to its members on “compulsory verification” if a company’s cash and bank balances exceed a “certain threshold”. Reportedly, Price Waterhouse has been associated with Satyam as an auditor for eight years. While long association helps an auditor know a company inside out, it could also lead to a quid pro quo kind of situation.