A proposal aimed at enhancing auditor responsibility for preparing consolidated financial statements of companies, including subsidiaries, has led to a clash between two of India’s accounting regulators.The National Financial Reporting Authority — a body set up by the Indian government and which has the power to monitor and enforce compliance of accounting standards — last week in a consultation paper proposed making the auditor of a parent company responsible for financial statements that put together accounts of subsidiaries and affiliates. The proposed change is set to bring the Indian rule in line with global standards.Opposing this, the Institute of Chartered Accountants of India — a self regulatory organization — said the move will further concentrate power in the hands of a few large audit firms. That will put many smaller firms out of business if the big auditors refuse to rely on their audits.The NFRA’s proposed change stems from the alleged audit failures at…
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