Tough audit rules

RBI must consider the concerns of financial services players

About a month ago, the Reserve Bank of India (RBI) issued a circular that substantially altered the ground rules under which financial services companies of significant size are audited. These changes have set off concern that has been gathering momentum in recent weeks. While the RBI’s intentions are sensible, and the reasons for the changes are clear and comprehensible, the central criticism is that these new rules will be difficult, costly, and complex to implement. The regulator will have to do more work, together with audit firms and large financial services companies, to figure out how the principles underlying the