MCA Mulls Accounting oversight Board

The ministry of corporate affairs (MCA) is examining setting up an independent regulatory authority for accounting that may be an accounting oversight board, on the lines of the public company accounting oversight board (PCAOB) in the US.

“We are examining all aspects of it. We are even looking into the global experiences. At present, we have our hands full with the new Company Law, restructuring of three ministries — ministry of heavy industries, ministry of commerce and industry and ministry of corporate affairs — and roll out IFRS. Once we through with them, we will focus on the oversight board,” said MCA minister Salman Khurshid.

Khurshid did not respond to a question on if ICAI would be concentrating on training, while the oversight board functioned as the regulatory body.

“There is a need for such a body. But there are lots of issues involved. And we will have to look into everything — what will be the form, what will be the role and who does what,” he said.

Responding to queries on the impact of class action suits on Mahindra Satyam’s present state of affairs, Khurshid said, “Although we don’t have any official communication from the US regulators, we have been told informally that things are on track and there are no major cause for worry.”

The ministry had urged the US regulators to ensure that the burden of class action suits on Mahindra Satyam was minimal.

Responding to a query on independent directors, Khurshid said, “If there are large number of instances of retiring auditors joining companies as independent directors for whom they has audited, the ministry would examine it in greater detail. However, such ethical issues better be addressed by the professional bodies.”

Earlier, Jayanta Roy, president of ICC, said, “Converting to IFRS is not just a technical accounting exercise — it is a significant project that will require support from multiple business functions including IT, tax, treasury and HR. The IFRS Clinics organised by the Chamber and KPMG are expected to help smoothen the difficulties.”

Financial Chronicle, New Delhi, 14-07-10.