Frame a law to oversee auditors, SC tells govt.

Frame a law to oversee auditors, SC tells govt.

Context:

The Supreme Court has directed the government to frame a law to regulate the auditing profession, saying “failures of auditors have resulted in scandals in the past.”

Details:

• The judgment came on a petition filed by the Centre for Public Interest Litigation seeking an investigation into PricewaterhouseCoopers Private Limited (PwCPL) and their network audit firms operating in India for alleged violations of Foreign Direct Investment (FDI) policy, the Reserve Bank of India Act (RBI) and the Foreign Exchange Management Act
• In the judgement,the Bench highlighted the manner in which multinational accounting firms violate auditing and financial laws.
• The apex court said these firms comply with Indian laws and code of ethics only in form and not in substance.
• The Supreme Court has directed the Centre to constitute a three-member committee of experts within two months to frame a law for an oversight mechanism over auditors