Sebi empowers auditors with audit of listed firms

Market regulator Sebi wants to appoint auditors to audit the financial statements of companies listed as part of efforts to curb fraud. In recent months, Sebi has ordered an investigation into the cases of certain companies.

The Securities and Exchange Board of India (Sebi) has invited applications from the relevant CA (Chartered Accountant) firms “to be empowered to perform accounting assignments for the listed companies”, according to a public notice. Explaining the eligibility process, Sebi said the applicant must have at least 10 years’ experience in the field of auditing or law, as well as 10 partners or directors, of which five must play an active role in forensic auditing.
“The application will not be considered where disciplinary action has been taken or action has been taken against the applicant, partners or directors, by any body or legal court,” Sebi said. Alternatively, the applicant was required to employ at least 20 (full-time) persons with appropriate qualifications, experience and expertise in the field of audit.

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The applicant should have had the experience of conducting at least forensic research audits at least three years ago and at least three such audits should have been done at the time provided by the governing body or government agency or public sector business. In addition, the company’s total revenue from police investigations allocations over the past three years should be at least Rs 1 crore.
Interested organizations may send their applicants to the Department within 21 days, according to a notice issued on May 21. In October 2020, the Bank requested the listed companies to disclose the startup of the stock market audit as part of an effort to address these vacancies.

Under the framework, listed entities need to make disclosures about the commencement of financial audits and the name of the entity that initiates such audits for the same reasons and reasons, if any, on the stock exchange. In addition, companies are required to disclose the final audit report, excluding legal audits initiated by regulatory or enforcement agencies, as well as management comments, if any.

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