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The Securities and Exchange Board of India (Sebi) plans to tighten the standards governing auditors, chartered accountants, corporate secretaries, experts and oversight agencies that perform fiduciary duties third parties under securities laws.
The new rules, once in force, will bring the activities of these entities in respect of companies listed under Sebi. Currently, most of them are not regulated by the Market Regulatory Authority.
Sebi asked the verifiers to ensure that the certificates or reports they issue are true in all material respects and that they must exercise due diligence in all matters. processes related to the publication of the report or certificate. [19659002Enjoiningregulatoralsoproposedwilladvocatethatthegoverningadministrationthankstomeasurablemeasuresbeforehandanecontrolbyonepersonoracompanywhichfreefromaregulationorwhichproperlycertificateforcontribution
In this respect, investors seek information in one month
"Investor confidence is essential to the proper functioning of the securities market.This trust depends on credibility and the reliability of investors' financial information when they make a decision on the distribution of capital, "said the minister in a consultation paper released Friday.
Sebi wants to make sure that the annual reports and the financial statements investors, are accurate. Auditors would be required to report in writing to the listed company's audit committee or to the compliance officer in the event of a violation of the securities law, he noted.
Sebi observed that the listeners were ignorant while checking the books with many discrepancies in the financial statements. This was emphasized by Sebi's expert committee on corporate governance, headed by Uday Kotak.
In the report, the Kotak panel recommended Sebi to have clear powers to act against auditors and other third parties or companies with legal obligations under securities regulations.
Power should be exercised in case of gross negligence and not only in case of fraud / connivance, Sebi cited the suggestion in the consultation paper
The move was triggered by several cases of failure to audit where the CA, auditors and evaluators were subjected to regulatory glare. Economic frauds such as Punjab National Bank's business letter scam, earnings losses on social media platforms and so on also prompted Sebi to describe these actions.
With contributions from Reuters
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