Letters: Auditors' rotation a must

Auditors’ rotation a must

As Anup Roy’s report, “RBI directive on auditors to benefit second-tier firms” (August 2) rightly points out, public sector banks are outside the ambit of the audit done by PricewaterhouseCoopers, Deloitte, KPMG and EY. Their audits are done by empanelled members of the Institute of Chartered Accountants of India.

The regulator also correctly says that some private and foreign banks do not follow the rotation period in letter and spirit. The central bank knows that frequenting of any auditor to the same bank might establish a comfortable relationship and compromise adherence to audit principles. This knowledge pressed the regulator to enhance the “rest period” from two to six years. The four-year tenure at a stretch of engaging one auditor by a private/foreign bank remains the same, as per the notification of the Reserve Bank of India on July 27.

Is four years too short a time to establish a comfortable relationship? If public sector banks do not enjoy such a comfort, why should private and foreign banks? The audit firm should be changed every year with a rest period of six years within which, rotation of auditors should take place so that familiarity is avoided.

P D Sankaranarayanan, Thiruvananthapuram

Not an easy concoction

Arvind Panagariya’s departure as NITI Aayog vice-chairman was expected and not as widely lamented as that of Raghuram Rajan as governor of the Reserve Bank of India. Part of the disappointment stems from institutional arrangement and ideological confusion. At the primary level, the Bharatiya Janata Party (BJP) wanted to get rid of a Soviet-style Planning Commission and alternative power centres, including the National Advisory Council, and introduce new thoughts and ideas. But the exact dimensions of its remit and powers could not get set in these three years.

The ideological confusion came in four varieties. There is a “market-state” wing in the BJP that believes in less government and in enabling the private sector. Another wing supports political federalism. This is why the BJP was less excited about the goods and services tax and Aadhaar. A third wing is centralising power and providing a single direction to the entire country, for example, the many economic and social programmes launched and monitored by the Prime Minister’s Office. Finally, there are the “social patriots” of the Swadeshi Manch and the Bharatiya Mazdoor Sangh, who don’t favour big or foreign capital, curbing of labour rights, foreign direct investment in retail. It is not an easy concoction to handle.

P Datta, Kolkata

Political intrusions

With reference to the editorial, “Paradox on the learning curve” (August 2), transformation in education has often been sacrificed at the altar of bureaucratic control and political interference.

Finance Minister Arun Jaitley, in his 2016 Budget speech, had reaffirmed the government’s commitment to empower higher educational institutions. He envisaged the Higher Education Empowerment Regulation Agency to provide an enabling regulatory architecture to 10 public and 10 private institutions.

But the government has now decided to defer action on the new policy and reinforced the impression that it is deliberately trying to dodge a debate on quotas in educational institutions. Instead of framing a policy to improve teaching and learning standards, the Ministry of Human Resource Development has shifted its focus to achieving quantifiable goals — increasing enrolment and attendance and mistaking university buildings for building universities.
 

Academic institutions are becoming vulnerable to government intrusion on the pretext of nationalism. A proactive approach should be adopted to “deliberate on matters of common interest” that fosters a renewed learning culture, not impinge on intellectual space.

Shreyans Jain, New Delhi

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