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K.R. Srivats
Richa Mishra

ICAI had backed its suggestion by the claim that all Accounting and Auditing Standards are very technical in nature and that only a member of the profession (Chartered Accountant) would be able to appreciate the nuances in audit work.

NEW DELHI, May 20

THE Institute of Chartered Accountants of India's (ICAI) suggestion that only a member of the Institute should occupy the post of the Chairman of the proposed Quality Review Board (QRB) has not passed muster with the Government.

The Central Government, which wants to have a final say on this matter, is set to adopt, in the proposed amendments to the Chartered Accountants Act, in toto the recommendation made by the Naresh Chandra Committee on Corporate Audit and Governance.

The Committee had suggested that the Department of Company Affairs (DCA) in consultation with, not necessarily from, the ICAI should nominate the Chairman of ICAI's QRB.

"Proposed amendments to the Chartered Accountants Act has incorporated the provisions for Quality Review Boards as recommended by the Naresh Chandra Committee," official sources told Business Line.

At stake is the post of the Chairman of a Board that is expected to, for the first five years, focus their audit quality reviews to the audit firms, which have conducted the audit for the top 150 listed companies, ranked according to market capitalisation as on March 31.

ICAI had backed its suggestion by the claim that all Accounting and Auditing Standards are very technical in nature and that only a member of the profession (Chartered Accountant) would be able to appreciate the nuances in audit work.

While noting that ICAI's Peer Review Statement seemed to be an adequate, self-contained document that addresses most of the issues regarding `who audits the auditors', the Naresh Chandra Committee felt it necessary to recommend a process of quality review that is publicly perceived to be independent and expeditious.

The Committee had suggested that ICAI's QRB should consist of 11 members including the Chairman. While five members of the Board, excluding the Chairman, should be nominated by DCA, the Committee had said that the Council of ICAI should nominate the remaining five.

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