Rakesh Verma, the Principal Accountant General of India described the trend toward greater involvement and reliance on public auditors in public financial management. He pointed out that there are those who believe that India is over-regulated. He does not agree with this view. Mr. Verma described the impact of the financial crisis on countries around the world. This has resulted in monetary policy changes and other public management adjustments.Mr. Verma described the impact of Public Private Partnerships on public finances. PPP's are high risk. Therefore, the role of the public auditor is critical according to Mr. Verma. PPP analysis is challenging to ensure that risk is properly distributed. He described the INTOSAI PPP guidelines for auditing for value for money.
Mr. Verma described problems with private auditors with many private sector companies. He warned that there are important lessons here for public auditors. Public auditors do not have a financial incentive to find unqualified audits And, constitutions around the world guarantee the independence of public auditors to ensure more reliable audit.
Audits are moving from compliance to performance in the public sector according to Mr. Verma. Compliance audit are still critical particularly because these address legal issues. He described the need to audit companies where the government owns more than 50%.
Mr. Verma described lessons learned from the financial crisis. Many interventions by public authorities have been based on the grounds of "too big to fail" rather than in the public interest. The public interest is better served by autonomous and independent organizations. He described how public audit can expand. Mr. Verma argued that government audit information should be published in newspapers to get scrutiny by the common man. He described the approach for risk-based audit in India.
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4 comments:
I entirely agree with the views of Mr Verma. The private auditors have not acquitted themselves well in the present economic crisis. They would rather lose their integrity than a big ticket client. The original proposal, when the SEC was formed in the US was to enable it to have some control over private companies but it was shelved because of lobbying. Its high time that the SAIs are given a regulatory role for the bigger private firms to safeguard taxpayer's money.
I entirely agree with the views of Mr Verma. The private auditors have not acquitted themselves well in the present economic crisis. They would rather lose their integrity than a big ticket client. The original proposal, when the SEC was formed in the US was to enable it to have some control over private companies but it was shelved because of lobbying. Its high time that the SAIs are given a regulatory role for the bigger private firms to safeguard taxpayer's money.
I agree with the speaker's views. The fact that many of the companies which required bail out at the expense of the taxpayer paid fat bonuses to their top brass and their executives arrived in private jets to meet the US president only lends credence to the view that they are burning up taxpayers money. Putting such companies which are too big to fail under the oversight of the public auditor would be the right step.
I have gone through the presentation but I feel there is a danger in the proposition. The Governments may be too intrusive and stifle the initiative of the private sector. This should be guarded against while framing the legislation.
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