Letter to BS: Root cause for IL&FS' audit failure remains unaddressed

The independent body should appoint the auditors of all listed and unlisted companies with a threshold turnover

This is with reference to the second editorial "Audit rot" (May 7). The editorial has analysed the audit failure of Satyam and Infrastructure Leasing & Financial Services in great detail and one tends to agree with the causes identified. But the root cause for the degradation of the audit work remains unaddressed. The reason for the audit failure is the appointment procedure under the Companies Act. The Act may follow global procedure but it has failed miserably in India. A company whose management is being reported to the stakeholders is appointing its own judge! This makes a mockery of independence. 

I