SEBI can hold auditors accountable

More than a year and a half after the Satyam scandal hit headlines, SEBI finally has the authority to question auditors of listed companies and proceed against them. Previously, the regulation of auditors was only through the Institute of Chartered Accountants of India. But the Bombay High Court has now upheld SEBI's powers to issue show-cause notices to auditors like PWC, KMPG, Deloitte etc. If suspected, they will need to appear in court and defend their actions. If they are unable to do so, remedial action can be taken against them.

Auditors have a direct, fiduciary relationship with shareholders. They need to make sure that the books of accounts they audit are clean. Giving SEBI the jurisdiction to question these auditing companies will help protect the interests of investors in these companies' shares. And prevent future scams and shams like Satyam's.