The government is discussing to cap the fee of non-audit services of firms to maintain independence of auditors, Corporate Affairs Secretary Injeti Srinivas has said. He insisted that one needed to ensure that auditors were independent — not just the external auditors, but also the internal audit committees of companies.
At the platinum jubilee of the Institute of Chartered Accountants of India (ICAI), Srinivas pointed out how audit of major listed firms in India was concentrated. He added, “The big four audit 75 per cent of firms in the world. There is a discussion on whether there should be a split of these firms so that audit service is not concentrated in few hands.”
This comes when auditors are being pulled up after discrepancies were found in companies. “Companies don’t tell anything about their financial health. Therefore, it is important for the auditor to give a fair and true picture of the health of the company. The Chartered Accountant has to be independent,” Srinivas said.