Replacement of Internal audit dept. by statutory audit

This query is : Resolved

s.k.majumdar

s.k.majumdar (Querist)
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18 September 2009 Dear sir
Can u pls. tell me whether SEBI is bringing any proposal for internal audit activities to be carried out by Statutory auditors in stead of internal audit employees in an organisation.If so,

i)what is the ramification of such proposal.

ii)When it is going to be effective.

iii)What will happen to existing internal audit department staffs,qualified as well as unqualified.

iv)Will the existing permanent IA employees loose their jobs in the organisation

Thanx and regards
S.K.majumdar
Asst.Manager(IA)
Internal audit

Kaustuv

Kaustuv (Expert)
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19 September 2009 This is not possible to conduct internal audit by the statutory auditor. Only a statutory auditor can work in areas like ICOFAR. Both these discipline have different set of objectives and can't be intermingled. I don't know of any such SEBI initiatives.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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20 September 2009 Members attention is also invited to Circular No. 29/76, dated 27-8-1976 issued by the Department of Company Affairs (now known as Ministry of Corporate Affairs) wherein the Department of Company Affairs has specifically prohibited a statutory auditor of a company from becoming the internal auditor of the same company. Members attention is further invited to the Code of Ethics issued by the Institute, which also prohibits a statutory auditor to accept an internal audit engagement of the same auditee.

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