Adapting the concept of auditing committees to Indian conditions is not easy considering the dominating shareholding pattern here, Comptroller and Auditor General of India V K Shunghlu said today. As per the Kumar Mangalam Birla Committee suggestions and the subsequent pronouncements of the Securities and Exchange Board of India, it is now mandatory to have audit committees at the board level in all listed companies, public sector enterprises and banks.
Inaugurating a conference on audit committees, organised by the Institute of Chartered Accountants of India (ICAI), Shunglu said, "Transposing audit committees to Indian conditions is not that easy since we are a part of that system in which dominating shareholders exist even though there are a number of other shareholders."
"Unless we have the proper system in place, the corporate sector would find it difficult to set up such committees," he said, adding that one of the key issues was the existence of dominating shareholder.