Rotation of audit partners compulsory from ‘09
In what could be a significant deterrent to corporate frauds, the concept of rotation of partners received a green signal from the apex body for chartered accountants, Institute of Chartered Accountants of India (ICAI), and mandates change of partners after seven consecutive years with a listed company.
The step, cleared by ICAI, will be operational from April 2009 and is expected to significantly reduce complexity between individual partners in audit firms and their assigned companies, something that has been a cause behind many of the big corporate frauds to have hit the financial world.
“We have cleared rotation of partners and this would come into force from April 1, 2009 only for listed firms, ICAI president Ved Jain said.