Grant Thornton India and its affiliates will not take up non-attest work such as consulting and transaction advisory services from listed companies that are being audited by them from July 1, a move that comes amid auditors facing heat in high profile corporate scams.
Grant Thornton in India carries out audit assignments through its affiliate Walker Chandiok & Co LLP.
The latest decision assumes significance against the backdrop of various auditors and auditing firms coming under regulatory scanner for violations in the IL&FS matter.
"Our decision to not accept non-attest work from audit clients from July 1, 2019 is in relation only to our statutory audit clients whose securities are listed on any stock exchange in India or abroad," Walker Chandiok & Co LLP Partner David Jones told PTI.
Services such as consulting, transaction advisory and valuations are termed as non-attest services.
The firm also acknowledged that it expects to forego a lot many opportunities which would have significant monetary impact in the short term.
"We, at Walker Chandiok & Co LLP believe that audit in India is not wholly broken, its reputation is certainly tarnished and it is up to us as responsible members of the profession to help rebuild confidence in audit," he said.
Asserting that the move is voluntary, John said the firm has been contemplating such and similar confidence building measures for sometime but recent events have definitely acted as a catalyst for expediting the decision.
"We believe that it is up to us as professionals to go beyond the call of regulation in order to demonstrate our commitment to rebuilding trust in the audit profession, and hence this decision," he noted.
According to him, high profile corporate failures have resulted in auditors and the auditing profession being in the crosshairs of a diverse group of stakeholders.
"With over 100 listed audit clients, we expect to forego a lot many opportunities which will have significant monetary impact in the short term. However, we do believe that in the medium to long term, this decision will be beneficial, not only to our firm, but for the audit profession and our clients, as a whole," he said.
When asked whether the decision makes Grant Thornton an outlier in the audit community, Jones said every crisis presents an opportunity for leadership.
"... as the firm that has set the standards for audit quality and for 'doing the right thing' in India for decades, it's our turn to take the first 'Bold' step to help rebuild that confidence in audit," Jones said.
About the overall impact of the decision on the auditing industry, Jones said it is difficult for the firm to predict even as he emphasised that it does not want to impose the voluntary decision to not accept non-attest services from listed audit clients on anyone else.
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