NEW AUDITOR NORMS IMPACT QUALITY IS A MYTH SPREAD BY SOME, RBI NEEDS TO REMAIN FIRM : AMARJIT CHOPRA
The Past President of the Institute of Chartered Accountants of India says the RBI should not give in to the pressure mounted by the big audit firms and the industry to postpone the new regulations including making joint audits mandatory for some lenders.
The RBI’s new guidelines for auditors of financial sector entities, released April 27 and applicable from this financial year 2021-22, have created a stir in the industry and the auditor community. The new norms, prescribing auditor rotation after every three years, making joint audits mandatory for certain lenders, and capping the number of audits in a year, have not been much welcomed by big firms auditors, the banks and the non-bank financiers. They have sent representations to the regulator seeking review and deferment of these new rules with strong arguments that the new regulation could impact audit quality and disrupt the industry.
But at the same time, a few top regulatory voices have come in support of the new norms, and even the smaller to mid-sized firms seem to hail the regulation, brought by the RBI with an intention of enhancing independence of auditors and decreasing concentration. One such voice is of Amarjit Chopra, Past President of the Institute of Chartered Accountants of India, who thinks the RBI should stay firm and not give in to the pressure mounted by the big audit firms and the industry to postpone the regulation. He makes his case strongly in the below interview.