ICAI selects 1,240 firms for peer review

The Institute of Chartered Accountants of India (ICAI), the apex body to regulate the profession of chartered accountancy in the country, has selected 1,240 listed firms for peer review.

According to ICAI President Uttam Prakash Agarwal, the peer review of these firms will be completed on a fast track basis and till now 4,000 firms have already been peer reviewed by the ICAI.

Moreover, the financial statements of a company coming out with an initial public offer (IPO) would also need to be certified by the audit firms, which have been issued a certificate from the peer review board.

In the aftermath of the Rs 7,000-crore Satyam Computer accounting fraud, in which the founder of the IT firm confessed to cooking the books, the Securities and Exchange Board of India (Sebi) had recommended that all listed companies be audited by only those firms or auditors that have been issued peer review certificate by the peer review board of ICAI.

The Council of ICAI, in its meeting on April 17-18, accepted the recommendation of Sebi that from April 1, 2009, all listed companies would be audited by only those firms or practice units that have been issued peer review certificate by the peer review board of the Institute.

In addition, the accounting regulator has also formulated the framework for the corporate affairs standards for development of benchmark, concepts, principles, practices and procedures which are to be used in relation to various corporate affairs, corporate governance and management of corporates.

The ICAI committee has also drafted the corporate affairs standard on business valuation, auditors’ appointment, retirement and removal and certification under MCA-21.

“We are hopeful that the corporate affairs standards prove to be a capacity building measure for the profession to ensure a corporate regime benchmarked with best global practices,” said Agarwal.