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Auditing firms can be prosecuted for misconduct: Jaswant
New Delhi, July 26: The auditing firm of any company whose accounts do not `present a true and fair view of the affairs` in Indian operations can be prosecuted under section 233 of the Companies Act, the Lok Sabha was informed on Friday.
New Delhi, July 26: The auditing firm of any company whose accounts do not "present a true and fair view of the affairs" in Indian operations can be prosecuted under section 233 of the Companies Act, the Lok Sabha was informed on Friday.
Asked if the government proposes to review audit norms in case of financial frauds committed by Indian companies, Finance Minister Jaswant Singh said in a written reply: "The concerned auditing firm can be prosecuted under Section 233 of the Companies Act or proceeded against for professional misconduct under Section 21 of the Chartered Accountants Act." Of the companies in which such irregularities are detected, he said, "if accounts do not present a true and fair view of the affairs of an Indian company, it can be prosecuted under Section 211 and/or Section 628 of the Companies Act".
In reply to another question whether the Comptroller and Auditor General (C&AG) would be asked to conduct an audit of Kendriya Bhandar, NCCF and Super Bazar, Singh said there was no such proposal at present.
"There is no proposal to have Kendriya Bhandar audited by the C&AG as the present system of having the accounts audited by a firm of chartered accountants is considered adequate". He said C&AG had been entrusted with the superimposed audit of accounts of NCCF for the five year periods 1987-88 to 1991-92 and for 1995-96 and 1999-2000.
"Superimposed audit for the accounts of Super Bazar was conducted by the C&AG for the period 1981-82 to 1985-86". Bureau Report
Asked if the government proposes to review audit norms in case of financial frauds committed by Indian companies, Finance Minister Jaswant Singh said in a written reply: "The concerned auditing firm can be prosecuted under Section 233 of the Companies Act or proceeded against for professional misconduct under Section 21 of the Chartered Accountants Act." Of the companies in which such irregularities are detected, he said, "if accounts do not present a true and fair view of the affairs of an Indian company, it can be prosecuted under Section 211 and/or Section 628 of the Companies Act".
In reply to another question whether the Comptroller and Auditor General (C&AG) would be asked to conduct an audit of Kendriya Bhandar, NCCF and Super Bazar, Singh said there was no such proposal at present.
"There is no proposal to have Kendriya Bhandar audited by the C&AG as the present system of having the accounts audited by a firm of chartered accountants is considered adequate". He said C&AG had been entrusted with the superimposed audit of accounts of NCCF for the five year periods 1987-88 to 1991-92 and for 1995-96 and 1999-2000.
"Superimposed audit for the accounts of Super Bazar was conducted by the C&AG for the period 1981-82 to 1985-86". Bureau Report