Need to eliminate 'ad hocism' in auditor selection at PSBs: ICAI

RBI has asked banks to make the process of appointing statutory branch auditors fair

A centralised system for auditor selection at public sector banks will help do away with "ad hocism", chartered accountants' apex body ICAI has said amid concerns over alleged malpractices in the whole process.

In the wake of the concerns flagged by the Institute of Chartered Accountants of India (ICAI), the Reserve Bank has advised public sector banks to put in place a fair and transparent mechanism for appointment of statutory branch auditors.

Welcoming the RBI move, which followed representations made by the institute, ICAI President Nilesh Shivji Vikamsey said the appointments should be made in a centralised way with the help of software.

"So what we advised and which RBI has luckily accepted is that appointment should be centralised and through a software. There should be no ad hocism, no human intervention...," he told PTI.

According to him, the institute has been hearing about a lot of malpractices happening at the ground level with respect to appointment of auditors at public sector banks.

In his latest monthly newsletter, Vikamsey has cited RBI saying that the public sector banks have been advised to appoint statutory branch auditors with the help of software for parameter-based allocation.

"RBI has further advised that the banks may appoint SBAs centrally at corporate office with the help of software for parameter based allocation of audit amongst the eligible firms ..." to select audit firms as per the appointment policy in place, according to the newsletter.

Among others, ICAI had proposed developing a software for fair, transparent and equitable allotment of branch statutory audits.