RBI constantly engaged with the ICAI to improve the quality and depth of audit: Shri Shaktikanta Das

RBI constantly engaged with the ICAI to improve the quality and depth of audit: Shri Shaktikanta Das Recently Shri Shaktikanta Das, Governor, Reserve Bank of India addressed on Role of Audit in the Modern Financial System at the National Academy of Audit and Accounts (NAAA), Shimla. There he highlighted many points on the importance on Audit. He said that "To overcome the problem of unreliable information, an assurance mechanism is required to be developed, which provides independent assurance to the decision makers about the quality and accuracy of information being provided to them. Such mechanism is provided through the audit mechanism, both internal and external." He also discussed about Audit Failures and their Impact on the Entity / System. He said that "Without generalising, it may be said that problems usually arise when the independence of auditors itself is compromised or the auditors lack competence in performing their role. Compromising the independence of auditors could lead to moral hazard. As such, auditors are subjected to greater scrutiny and regulation so as to increase the reliability of their work. One of the important roles of audit is to check the so called smart accounting practices, if any, followed by management to overstate profits or understate expenses / liabilities." Further he said that "Since RBI, as the supervisor of the financial system, relies and leverages on the work done by auditors, the audit professionals are being sensitized through various fora to improve the quality of their reporting. We are constantly engaged with individual auditors, audit firms and the Institute of Chartered Accountants of India (ICAI) to improve the quality and depth of audit. A lot of work has been done in this area, but lot more needs to be done." Click here to read the complete speech