Financial Daily from THE HINDU group of publications
Tuesday, Jul 23, 2002
ICAI to examine Crisil study on blue-chip cos
NEW DELHI, July 22
EVEN as a Crisil study showing variance in profits calculated by the rating agency to those reported by a number of blue-chip companies for 2000-01 had not faulted the chartered accountants, the Institute of Chartered Accountants of India (ICAI) intends to go deep into the findings of the Crisil study.
"We will examine the findings and take it to its logical conclusion as the study had adversely commented on 139 of 639 companies analysed. Our disciplinary mechanism is such that we will have to take things to a logical conclusion even though a complaint may be withdrawn," Mr Ashok Chandak, President, ICAI, told Business Line here.
He said that the DCA has already instructed ICAI to get to the bottom of the findings of Crisil study and then submit its views to the department.
"We will exercise all the powers within us to get more information about the study. A set of presentation papers (hard copy) on the study are already with our officers. It now needs to be ascertained whether at all there is a separate report on the matter," Mr Chandak said.
After examining the study, the ICAI would start calling for balance sheets and auditors' report of the companies in question. "If the powers of the institute are not adequate to source the balance sheets and auditor's reports, then we will seek DCA's co-operation on the matter," he said.
A senior DCA official said that it was more than a week since the department had asked ICAI to examine the veracity of the findings of the study and submit a report to them.
"It is important that the hype or the undesirable accounting methodologies stated in the report need to be clarified,'' the DCA official said.
Stressing the need for examination of the Crisil study, DCA officials held that "unusual accounting practices" has a bearing on the confidence of investors in the financial statements of companies.
"At no point in time, should the investors be doubting the integrity of the numbers and the accounting practices. It is chartered accountants who can find out accounting irregularities, if any in the accounting practices of companies and that is why ICAI has been asked to look into the matter," the DCA officials said.
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