India Inc lacks fraud-detection procedures in audit plans: E&Y
Press Trust of India / New Delhi Jun 25, 2009, 19:14 IST
Even as India Inc talks of increasing corporate governance norms after the Satyam scam, a study by global consultancy firm Ernst & Young has said that more than half of the companies surveyed do not take into account risk of frauds in their annual audit plans.
Though many companies have increased their internal audit budgets, the survey said that 44 per cent companies confirmed that fraud-detection procedures are not included in the work plan for most audits, while 36 per cent of them said they do not account IT risk assessments in their annual audit plans.
Though IT systems are backbone of operations in most companies, the India Internal Audit Survey 2009 showed that there is a dearth of IT auditors and a low percentage of firms perform an IT risk assessment before finalising their internal audit plans.
This means that firms need to revamp the functioning and involvement of audit committees in overseeing the audit function and see if there is proper implementation of audit recommendations, the survey said.
"Deeper involvement of audit committees is essential to improve the perception of the importance and quality of work delivered by the internal audit function," E&Y partner and national director Ram Sarvepalli said.
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