Business Ethics and Corporate Governance, Second Edition

PREVENTING FRAUDULENT AUDITING PRACTICES

With an aim to protect the investors from the fraudulent accounting practices of corporations, the Indian government as well as the regulatory bodies have appointed many committees. Till date, four committees played a vital role in framing the responsibilities of the auditors and the audit committees: The R.D. Joshi Committee, the Kumar Mangalam Birla Committee, the Naryana Murthy Committee and the Naresh Chandra Committee. All these committees’ recommendations focussed mainly on the following aspects of auditing: formation of the audit committee, their responsibilities, rotation of auditors, prohibition of non-audit services and the transparency of financial statement.⁹

A more recent and ominous case ...