Following the request of the Securities and Exchange Board of India, the Institute of Chartered Accountants of India has decided that the audit of listed companies and public sector undertakings will be conducted only by auditors holding a 'peer review certificate' issued by the institute.
Considering the public interest involved in listed companies, they will now only employ auditors who hold the required certificate.
CAs with at least 15 years of experience will be considered to be eligible for auditing. Of about 3,000 chartered accountant firms, who audit listed companies, about 1,200 firms have already been selected for undergoing peer review and the process is on. Out of 843 firms, which have been issued Peer Review Certificates so far, 259 firms are already involved in auditing listed companies. The remaining 1,800 firms will soon be covered under the peer review.
ICAI, recognising the need to be at par with developed countries with regard to the quality of attestation services, established the Peer Review Board in the year 2002.
"It is a fantastic step in the right direction. However, a little strengthening will be required so as to make this system more robust and cover nearly all CA firms", said Dolphy D'Souza, partner, Ernst & Young."The peer review is like ISO 9000 for CAs. In India, scandals like Enron have not occured so far. It is a proactive measure taken by us. We want to ensure a security stamp with regards to competence and perfection of accountancy services," said Sunil Talati, president, ICAI.