Big Relief For Audit Firms

In a big relief to big audit firms facing a probable ban for their inability to detect large corporate frauds, the Securities Appellate Tribunal (SAT) has reversed a Sebi order banning 10 PwC-associated audit firms for their alleged 'involvement' in the Satyam Computer scam.

The message that comes from the order is that banning audit firms could be a rarity and if at all partners and staff of an audit firm are found guilty of professional lapses, they are the ones who should face action and not the firms.

The general feeling is that a blanket ban on audit firms, especially the bigger ones, will only create trouble for Indian Inc., which will find it difficult get a replacement. The need, people from the audit community say, is to bring in reforms in the profession, along with practices like joint audits.