Big investors push for auditors to sign financial statements

The trade group representing institutional investors urges Securities and Exchange Commission not to weaken plans to make auditors publicly accountable for their work

 

An industry group, which represents some of the US' largest investors is urging regulators not to back away from plans to require auditors to sign the financial statements they prepare for companies.


In my 13th August "Trade" column, I wrote of a struggle between the Public Company Accounting Oversight Board (PCAOB), which regulates the accounting industry, and the Securities and Exchange Commission over reforms to auditor disclosure. The PCAOB, and many accounting reformers and investment groups had pushed for this change.


The accounting industry and the SEC have resisted. The negotiations have been going on for years.


In a letter dated 15th August, Jeff Mahoney, the general counsel for the Council of Institutional Investors, a non-profit that represents investment organizations with more than $3 trillion in assets under management, wrote, "to express our surprise and disappointment in the report earlier this week in the New York Times that the Public Company Accounting Oversight Board has decided to dramatically weaken" the reforms.


The bodies are coming to a compromise, with final rules slated to come out next month. As part of the compromise, the accounting firms will be required to disclose who the lead audit partner is, but the partner will not be required to sign the audited financial statements, according to a person familiar with the decision. It's not yet decided in what manner the auditing firms will disclose the lead engagement partner's name.

Courtesy: ProPublica.org

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COMMENTS

R Balakrishnan

4 years ago

Strong feeling that the ICAI will use all its clout to get away .

Before we can 'make it in India'!
The e-biz initiative of the Cabinet Secretary hopes to help companies get over some 60 clearances on line; but this is likely to take time before a single platform to take care of all the needs are covered
 
Speaking for the first time from the Red Fort ramparts on this Independence Day, Prime Minister Narendra Modi made an impressive extempore speech and invited foreign investors to "make" (or rather manufacture) what they need and export it to where they please from India. He invited foreign investors to make India their industrial hub.
 
He threw caution to the winds and spoke fearlessly, unshielded by bullet proof glass or vest. He was humble enough to call himself as the "pradhan sevak" and said that India has the raw materials needed, qualified and technically skilled personnel, competitive and low wages, and the keen desire to make products that the manufacturer could sell, where they are needed. From the Red Fort, he offered red carpet treatment to investors to make India their industrial base.
 
The question before us is whether India has the wherewithal to meet the exacting needs of the foreign investors?  Can they comply with hundreds of formalities and obtain approvals from various departments, and authorities before they can even think of going to the drawing board to prepare the blue prints for a manufacturing programme?
 
According to an assessment made by the Project Monitoring Group in the Cabinet Secretariat, they found some 24 approvals are needed from the Central Government and another 35 clearances from various State departments concerned. A formidable task indeed. They found that out of these only two can be obtained through one platform and apparently there is a lack of coordination and cooperation between state departments and the central government itself! Efforts are now being made to have the platform e-biz set up to comprehensively cover these issues.  At least a good move to reduce tension for the new applicant!
 
This e-biz initiative of the Cabinet Secretary hopes to help companies get over some 60 clearances on line; but this is likely to take time before a single platform to take care of all the needs are covered.
 
Among the many areas that have caused inordinate delay is the time involved in getting "green clearances". According to information available in the press, hundreds of projects in the country are stuck due to this issue.  The reports indicate that 425 projects are awaiting environmental clearances out of which 160-170 are set to be for industrial projects!  This needs to be removed to the maximum extent possible.
 
The next important issue is the availability of land. According to experts, the cost of land accounts for 20% to 25% of the project cost and would certainly vary from one location to another. In order to overcome this, should the government decide, with the cooperation of the State concerned, to make it available in the interior, free or even at cheap prices, which would be away from towns and cities, there would be the imperative need for development of infrastructure facilities. Extension of existing power lines, rail-road connections, setting up of small townships so that the employees may live close by are other factors that need to be covered.
 
PM Modi mentioned about skilled personnel being available in the country; this is basically true but a majority of them are employed.  Others will have to be trained to meet the needs of the factory.  Even otherwise, the fact is almost 60% of the population are involved in agriculture, one way or another, and there is also a growing tendency for farmer's children to leave for cities and towns to take up "jobs" rather than "farming"! This attitude is already affecting farming particularly during harvest seasons.
 
The SEZs are a boon to the exporters. However, Dr Nirmala Sitharaman, our Commerce Minister, is reported to have said: "within the country, people are saying why exporters should only get this fantastic facility?"
 
Modi's invitation to foreign investors make the writer wonder if the Prime Minister has some special scheme in mind, such as setting up FEZs - Foreign Exporters Zones - where they could come and establish manufacturing units exclusively for exporting their finished products out of India?  If such goods manufactured in FEZs are required for use in India itself, they could be "exported" by the manufacturer!  For this purpose, they would have to "import" raw materials and manpower services from India!  This will be a special privilege that can be established so that foreigners come and invest in the country, and make India their industrial hub!  Maybe they can be given some tax benefits which are more attractive then their own country of origin?
 
Food for thought?  Such ideas can be worked out in detail to the benefit of the country! 
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
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Dr Anantha K Ramdas

4 years ago

Thank you Mr Malik for your comments. What PM Modi can do and really should do is to request all concerned that ALL the pending cases, as on date, will have to be completed within a time frame of say the next 100 days, starting from the first 100 days in office of this new Managers of India!

If there are reasons for rejections, the department concerned must officially state the details in the Govt Gazette and also tell the applicant that, if they are able to comply with the conditions laid therein and the corrections are made, say, within 60/90 days, the MOEF
will give them the clearance.

I believe State governments - particularly Jharkhand - which is sitting on the mineral wealth of India, is one State where things do not move as speedily as required. Let's forget the past but get on with the future, and let the State officials declare that they are unable to "pass the papers" simply because of non-compliance by the applicant, and that there is "no other legitimate reason" for delays.

Likewise, if new applications are submitted, let there be a NEW System of public announcement of what is "missing" in the application and what "needs" to be done; let them also give a time frame within which the applicant has to comply with the need. If the applicant gets into stumbling blocks, duly "created" by vested interests, let them say so fearlessly.

If such bold steps are taken we truly could take a pride in leading the rest. We simply do not want to do, and, sorry to say that these "enlightened babus" put in the obstacles in the way, so that they can make a fast buck for not doing the job that they are supposed to do and for which they are getting paid by honest tax payers money!

For give my saying, it is a bloody shame and it is time we stop this nonsense.

Veeresh Malik

4 years ago

Land - there is about 467 lakh hectares of wasteland available in India. If Indians are willing to go to the deserts of Arabia to set up factories then they will do so in the deserts and wastelands of India also. Start from there - but then, most large industries as I know them want land that will appreciate in value co-terminus with the loans taken going NPA. Wasteland to work in is only for industries willing to work.

Foreign investment - when 3 or 4 or 5 lakh crores worth of Indian capital has gone into NPA over the last few years, what good is a few thousand crores of Foreign Investment going to do, is it worth the effort? There is a big flaw in this argument of lack of capital. My banker is begging the middle class around here to take housing loans as he can not deploy enough capital lately.

And thirdly, your main point, clearances and documentation. Yup, that's the show stopper, we wait and watch. If that is fixed, even at my small level I will organise 5-10 crores and start something, and there will be 1000s like me in India, ready to go into manufacturing, AND ensuring that employees get best of class facilities at the workplace.

Patients have right to get medical records from hospitals

Easy availability of medical records will help patients avoid approaching courts or quasi judicial bodies for remedy

 

The Law Ministry on Thursday said, patients have a right to get their medical records from hospitals and the Health Ministry should issue instructions to ensure that such documents are not denied.

 

Against the backdrop of a Central Information Commission (CIC) judgement ordering disclosure of information to a former official of the Research and Analysis Wing (RAW), the Law Ministry has pointed out that “most of the time the hospital authorities do not provide details of the medical record or the treatment given to a patient.”

 

Nisha Priya Bhatia, a former official of RAW, had sought her medical records from the Institute of Human Behaviour and Allied Sciences where she was admitted on orders of Delhi High Court.

 

In a letter to Union Health Secretary Lov Verma, Union Law Secretary PK Malhotra has said that according to the CIC’s 23rd July order, a patient has a right to his/her medical record which is rooted in Article 19 and 21 of the Constitution and the hospital authorities have a duty to provide the same under RTI Act, Consumer Protection Act, Medical Council Act and world medical ethics dealt with constitutional rights.

 

“If there are existing instructions to this effect, the same need to be reiterated and the concerned authorities sensitised about the same,” Malhotra wrote.

 

He said if there are no existing instructions, the Health Ministry may consider issuing suitable orders or rules so that patients get copies of their medical record including details of treatment, “as a matter of right.”

 

Sources in the Law Ministry said, easy availability of medical records will help patients avoid approaching courts or quasi judicial bodies for remedy.

 

He said the instructions can be issued based on the CIC order.

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COMMENTS

Ramesh Poapt

4 years ago

good news from ML! Great!!

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