On February 6, the Ministry of Corporate Affairs (MCA) issued a consultation paper on the independence and accountability of auditors. The last date for submission of comments/observations is February 28. The accounting code of ethics requires audit firms to identify threats to independence for each audit assignment and decide adequate and effective safeguards against those. The consultation paper has suggested building protection against those threats in the regulations. It also flags the important issue of the concentration of economic power with Big 4 audit firms, affiliates of which audit 70 per cent of the 1,800 companies listed on the National Stock Exchange (NSE). It has also flagged some other important issues.
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