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

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

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