Industry against joint audit

The government's move to implement a joint audit across different class of companies may not be suitable in the Indian context, say industrial bodies.

In its submission, the Federation of Indian Chambers of Commerce and Industry (Ficci) said that 'Joint audit would not be suitable in the Indian context as it not aligned with ease of doing business in India. A mandatory joint audit would bring severe hardship to the industry…It would mean additional expense, time and effort for a company without any tangible benefit and have adverse consequences especially for companies that need to publish quarterly results.'

Some sectors like telecom and power that are highly regulated are subjected to multiple audits by different agencies for various purposes and a joint audit would be an additional imposition on such industries.

The Confederation of Indian Industry (CII) in its submission said that joint audit does not mean safer audits and there has been a number of audit failures even with joint auditors. In joint audits, it becomes difficult to fix responsibility since there is a lack of clear accountability.

The Ministry of Corporate Affairs (MCA) has proposed significant amendments to existing regulations to enhance the independence and accountability of auditors. The industry bodies have made their submissions in response to a consultation paper floated by the MCA.

This comes in the backdrop of several auditors and auditing entities coming under the regulatory lens for alleged misdoings.

The deadline for submission of comments on the consultation paper ended on March 15.

Gold imports plunged more than 73 per cent in March to the lowest in sixand-a-half years amidst the lockdown and high metal prices. Imports were down 55 per cent in the March quarter.

The country imported 25 tonnes of gold in March and this was down from 93.24 tonnes in the yearago month. Despite higher prices, March imports in value terms dropped nearly 63 per cent to $1.22 billion.

Jewellery stores have been hardly receiving footfalls since the beginning of the month as social distancing and Covid-19 fears have been keeping buyers away from the gold stores.

“Customers have been keeping away from gold purchases as it is not an essential commodity. Even the wedding purchases have been low-key as there were restrictions on wedding functions,” said Tom Jose, chief financial officer, Joyalukkas. Some of the retailers like Titan had stopped their operations even before the government announced nationwide lockdown.

Gold imports were down in February and January as well. For the March quarter, imports were down by 55 per cent to

107.26 tonnes against

240.39 tonnes in the same quarter in 2019.

In fact, even before

Covid-19 struck the globe, gold imports have been coming down due to rising prices. Imports were down since July, barring November when prices dipped from their all-time high levels.

Market analysts are sitting fingers crossed to see how the current crisis resolves before assessing the gold demand for the year. According to P. R. Somasundaram, managing director, World Gold Council India, all the asset classes are trekking a rough path as the current priority is fighting the disease.

“We, the people of India, are generally optimistic. So once this is behind us and good news starts flowing in one after another, and fear recedes, we may see resurgence of positive sentiment and strong revival of demand,” Somasundaram said.