Should the auditing standards need a revamp considering big scams like Satyam, Lehman and many others occurred recently?
In India we have found that due to Satyam, Enron and other collapses and scandals in US and to facilitate foreign investment and trade, India must implement some reforms. However the mix of external and internal regulation must not overtax Indias scarce resources and should not impose harsh regulatory burdens onindustry that may lead to Indian companies not being globally competitive.Along with a global trend for the adoption of corporate governance by companies, these factors favour regulation to be based around companies adopting corporate governance practices. If a country does not have a reputation for strong corporate governance practices, capital will flow elsewhere. If investors are not confident with the level of disclosure, capital will flow elsewhere. If a country opts for lax accounting and reporting standards, capital will flow elsewhere. All companies in that country regardless of how steadfast a particular companys practices may be suffer the consequences.
