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Sebi panel suggests independent regulator needed for auditors

India News

The new norms proposed by the Securities and Exchange Board of India’s (Sebi) corporate governance panel for auditors has strengthened the case for the establishment of an independent auditor as mooted by the government.The Parliamentary Standing Committee on Finance had in 2012 specified the need for a quasi-regulatory body for supervising audit quality. This would in the form of a National Financial Reporting Authority (NFRA) provided for in Section 132 of the Companies Act, 2013 for matters relating to accounting and auditing. New Recommendations
The Sebi panel has also recommended that the Quality Review Board be strengthened
This is to meet the criteria laid down by the International Forum of Independent Audit Regulators. India is not a member
Five of the 10 QRB members are nominated by the ICAI Council and five by the government
The panel wants QRB to be provided requisite financial resources and full-time personnel for its mandate
The panel also batted for enhancing Sebi’s powers to act against auditors and third-party fiduciaries with statutory duties under securities law, subject to safeguards
It has noted Sebi lacks the power to impose penalties on auditors