In a significant decision, the Securities and Exchange Board of India (Sebi) has decided to set up a panel to review all records maintained by auditors on the quarterly results of companies listed on the Bombay Stock Exchange 30-share Sensex and the National Stock Exchange 50-share Nifty.
The review will be taken up after the third quarter results (to be announced shortly) and the audited results of the second quarter. The review will also cover some other companies outside the Sensex and Nifty list.
The auditor's main job is to check whether detailed processes have been followed by the company concerned and whether they are fair and accurate. Auditors maintain these papers as a matter of record. Also, if they have reservations about the truth of the numbers, they write to the audit committee and the board before they are carried in the annual reports. The Sebi panel will review all these papers.
Sebi accepted the recommendations made by its committee on disclosures and accounting standards that met in Mumbai today to discuss the course of action by the regulatory agencies to boost investor confidence in the financial disclosures made by listed entities.
The regulator's disclosure committee, according to the Sebi website, consists of leading chartered accountant Yezdi H Malegam as chairman and representatives of apex chambers, industry and capital markets.