After PNB fraud sparks outrage, ICAI sends this tough message to CAs

Amid auditors' role coming under the lens in the Rs 12,700 crore fraud at Punjab National Bank, ICAI President Naveen N D Gupta has flagged concerns about perception gap for chartered accountants even as he emphasised the need to "rekindle the credibility as core to our existence and growth". Gupta, who took over the reins of the ICAI last month, noted that chartered accountant profession owes its sustainability to strong regimen of ethics.

Against the backdrop of various corporate frauds, including in the banking sector, there are concerns about lapses on part of auditors in detecting the alleged misdoings. "With spurt in economy and increased reliance on the role of profession, there started the issue of expectation gap or should I say perception gap. We need to rekindle the credibility as core to our existence and growth," Gupta said in a message to the ICAI members.

As a multi-agency probe is going on in the fraud at Punjab National Bank, the alleged lapses of auditors have also come into focus. Noting that time of disruptions is a time for introspection and taking corrective actions, if so needed, Gupta said the exercise of bank branch audit assumes a paramount importance for the banking industry and banking regulators, among others.

"... Once in a while there are occasions when due to some isolated cases concerns have been raised about the contribution of the profession and services rendered by members like in the PNB matter," he said.
The Institute of Chartered Accountants of India (ICAI) has set up a high-powered group to look into the PNB case.

"The officers of PNB were called by ICAI to appear and produce copy of all related documents in the said frauds. General Manager, Western Zone, PNB appeared and made his statement in Mumbai," the institute had said last week.