Public sector banks, saddled with a pile of non performing
assets—loans that do not fetch returns—could soon frame
stringent rules allowing them to take action against service
providers such as chartered accountants and advocates if
required.
The Central Vigilance Commission (CVC) has asked banks
to look into the issue and come up with appropriate
guidelines as bank officials should not be solely held
responsible for the rise in bad loans, which rose by Rs
94,666 crore in the April to December period of 2015-16.
Sources said two out of 10 loan applications are being
rejected due to the NPA pressure even as finance minister
Arun Jaitley has asked banks not to adopt an over cautious approach.
“At present, the bank officials are taking the entire responsibility (over the issue of NPA) but this is a narrow way of dealing
with the problem and the role of the CAs, lawyers must be scrutinised and a framework needs to be designed so that they
are accountable too,” said an official source.
The CVC has also raised the issue with the Institute of Chartered Accountants of India (ICAI)
What are Auditing Standards? The Standards on Auditing is an area which requires greater focus of CA in practice as well as our administrative bodies who are updating our members. The Companies Act 2013 has discussed it in detail which was absent in erstwhile act. As per Sec 2 (7) “auditing standards” means the standards of auditing or any addendum thereto for companies or class of companies referred to in sub-section (10) of section 143. Sec 143 (9) reads “Every auditor shall comply with the auditing standards.” As per Sec 143 (10) The Central Government may prescribe the standards of auditing or any addendum thereto, as recommended by the Institute of Chartered Accountants of India, constituted under section 3 of the Chartered Accountants Act, 1949, in consultation with and after examination of the recommendations made by the National Financial Reporting Authority: Provided that until any auditing standards ar...