Auditors’ rotation a must

As Anup Roy’s report, “RBI directive on auditors to benefit second-tier firms” (August 2) rightly points out, public sector banks are outside the ambit of the audit done by PricewaterhouseCoopers, Deloitte, KPMG and EY. Their audits are done by empanelled members of the Institute of Chartered Accountants of India.

The regulator also correctly says that some private and foreign banks do not follow the rotation period in letter and spirit. The central bank knows that frequenting of any auditor to the same bank might establish a comfortable relationship and compromise adherence to audit principles. This knowledge pressed the regulator to enhance the “rest period” from two to six years. The four-year tenure at a stretch of engaging one auditor by a private/foreign bank remains the same, as per the notification of the Reserve Bank of India on July 27.

Is four years too short a time to establish a comfortable relationship? If public sector banks do not enjoy such a comfort, why should private and foreign banks?

The audit firm should be changed every year with a rest period of six years within which, rotation of auditors should take place so that familiarity is avoided. P D Sankaranarayanan

Thiruvananthapuram not get set in these three years.

The ideological confusion came in four varieties. There is a “market-state” wing in the BJP that believes in less government and in enabling the private sector. Another wing supports political federalism. This is why the BJP was less excited about the goods and services tax and Aadhaar. A third wing is centralising power and providing a single direction to the entire country, for example, the many economic and social programmes launched and monitored by the Prime Minister’s Office. Finally, there are the “social patriots” of the Swadeshi Manch and the Bharatiya Mazdoor Sangh, who don’t favour big or foreign capital, curbing of labour rights, foreign direct investment in retail. It is not an easy concoction to handle.

P Datta Kolkata