Reserve Bank of India Governor Shaktikanta Das, during a speech at the National Academy of Audit and Accounts (NAAA), Shimla, today said that auditors need to "update and upgrade skills" constantly and perform the task most effectively.
He was addressing the probationers and other officers of the Indian Audit and Accounts Service (IAAS). He said in a globally integrated economy, a fair and impartial audit is not just a domestic concern, but also an instrument to enhance reputation and credibility on a global stage. "It assumes greater significance during difficult times such as the one we are going through now due to the Covid-19 pandemic," he said.
He said as India aspires to grow faster, the expertise and independence of auditors will have to be leveraged to provide more assurance on financial performance to all stakeholders. "We need a robust audit for a dynamic and resilient economy," he added.
The RBI Governor said tomorrow's auditors will not only be "critical" but "constructive challengers", with a focus on public interest and quality audits. "In essence, there is a need to be even more professional, qualified, impartial, value-driven, ethical, and also display awareness and foresight," said Das.
He said the Reserve Bank of India (RBI) is clear that financial stability, among other things, depends on "market confidence", which in turn stems from investor or stakeholder confidence.
On ethical conduct, the RBI Governor said it has been repeatedly emphasising the importance of a strong governance framework in banks and NBFCs (non-banking finance companies). "Such a framework has to be built on principles of transparency, prudent business strategy, effective risk management and a strong compliance culture," he said.
He said to ensure good governance and ethical practices, financial sector entities, the audit community and the financial sector regulators and supervisors have to work together and take proactive steps.
As per Das, the RBI, as the supervisor of the financial system, relies and leverages on the work done by auditors. "The audit professionals are being sensitised through various fora to improve the quality of their reporting," he said, adding the central bank is constantly engaged with individual auditors, audit firms and the Institute of Chartered Accountants of India (ICAI) to improve the quality and depth of audit.
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