The Indian Institute of Technology, Kanpur (IIT-K) has been roped in by the Union ministry of corporate affairs (MCA) for developing effective software to detect accounting frauds and realise better corporate governance. The institute will work in consonance with the newly-founded Institute of Corporate Affairs (ICA) towards the completion of project.
According to IITK director Sanjay Govind Dhande, MCA has roped in two premier technological institutes in the country including IIT-Kanpur and IIT-Kharagpur to work in collaboration with the ICA, which has been set up with an investment of Rs 211 crore near Manesar in Haryana.
“The unearthing of the Satyam scandal has evoked an urgent need for more stringent provisions of auditing and accounting to curb the rising malaise in Indian corporates. This will also enhance the investor’s confidence and contribute towards flourishing of economic activity,” Dhande said.
The proposed systems will automatically cross-check calumnies in the corporate records besides providing easily-accessible guidelines for the chartered accountants to ensure legal compliance.
“Auditing done by human interface is liable to be skewed in favour of one entity or the other while the new system, once in place, will minimise the risk of tampering as the software source code would be safely guarded with a handful of developers in these institutes, making it almost foolproof,” he added.
According to quality upgradation committee chairman KD Gupta, the step aims at enforcing better compliance of corporate governance laws, which are currently lying in the rulebooks.
“The new system will also reduce the manpower required as the government directors needed for enforcement will reduce to a meagre 10 after the system comes into place,” he said.
Meanwhile, IIT-K has also tied up with a Malayasian electronics university to guide its set up and enhance the academic and research exchanges between the two countries.