Accounting regulator Institute of Chartered Accountants of India (ICAI) has decided to disallow all partners of tainted firms from conducting any audit work till the firm is absolved of the charges and proceedings have been completed. The decision is likely to have an adverse effect on the profession as partners who,even if a part of the firm but not involved in the misconduct,will also not be allowed to carry out individual practices till the firm is given a clean chit by the ICAI. We have written to the RBI and CAG. In case of misconduct,not only the firm involved but each and every partner,whether he has been a part of the audit or not,will not be allowed to carry out any audit work till the proceedings are completed, ICAI president Uttam Prakash Agarwal told The Indian Express. He said while the practice of punishing the firm is in place,the move will make other partners more cautious and will also keep a check on any malfunctioning in the firm. The ICAI has also limited the number of entities an audit firm can register with the same name. He said that the move is following the denials by PricewaterhouseCoopers of any connection with audit firms who audited accounts of fraud-hit Satyam. Sometimes you find four or five firms registered in identical or almost similar names in various parts of the country. We have taken a decision in the committee not to permit the registration of more than two such firms that are promoted by the same entity, he said. Further,regarding the foreign tie-ups Indian firms have,he said that the institute had asked for the details from the firms regarding their foreign partnerships and 70 per cent of them have replied.
