04 APR,2021 | MEDC
Over the years, as Indian businesses have evolved to attain greater complexity, shareholder expectations have naturally risen. It is not too much to expect that auditors of any company’s accounts who are carrying out a legally mandated process should be able to offer shareholders an accurate picture of the true state of its finances. Unfortunately, dodgy dealings and fudged books have been frequently overlooked and stoked the perception that auditors are not always to be believed. The incentive structure is partly to be blamed for this, as auditors are hired and paid by the very company whose accounts they screen. If corporate governance is to be strengthened, all conflicts of interest needto be considered. Auditors are notnecessarily financial wizards. But they should have the ability to detect inconsistencies in company accounts and the courage to point them out to stakeholders. Failure to do so will erode the world’s trust in our corporates, and thwart their global expansion plans.
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