New Sebi strictures on subsidiaries make accountants even more accountable

Experts believe this new format would increase transparency for monitoring and reviewing an entity's performance at a consolidated level

The Securities and Exchange Board of India’s (Sebi’s) new rule pertaining to reviewing the account of unlisted subsidiaries of listed entity could go a long way in preventing the reoccurrence of the IL&FS debt saga. 

The regulator last month issued guidelines on group audit making statutory auditors even more accountable while preparing audit report, mandating them to undertake a limited review of all entities accounts of which are consolidated with the listed entity.  

The new rule, effective from April 1, is in line with recommendations of the Uday Kotak committee report on corporate governance. The committee had recommended that “auditor of the