India begins debate over future of audit after Satyam

The debate over the future of audit in India after the Satyam scandal has begun in earnest with a senior member of the country’s profession calling for change.

KS Mehta, managing partner of SS Kothari Mehta and Co, one of the largest mid-tier firms, has written in the country’s business daily asking for a review of auditor rotation, the introduction of partner rotation and a new system for inspecting auditors by the Institute of Chartered Accountants of India.

Mehta also claims the Indian profession needs a strengthened disciplinary process and a special system for high value cases like Satyam.

Mehta writes: 'The Satyam affair has shaken the country’s audit profession and regulatory authorities to its roots. Investors have suffered in a big way and Indian business has lost some of its sheen.'Satyam’s former chairman Ramalinga Raju admitted in a letter last month that an accounting fraud worth as much as $1bn had been committed at the IT giant.

Auditors from PricewaterhouseCoopers have been questioned by the police and the professional authorities in India.

Read Mehta's views in their entirety here.