Jail up to 10 years and fines up to three times the scam amount await chartered accountants and audit firms found guilty in corporate frauds. Audit firms, including the global Big 4 - Pricewaterhouse, KPMG, Deloitte and Ernst & Young - for the first time face punitive action, closure of business and stiff penalties for financial frauds as the government proposes a stricter regime to check scams and irregularities.
Mindful of the multi-crore Satyam scam and other corporate frauds, the Companies Bill 2011, tabled in the Lok Sabha last week, has proposed to give powers to the National Company Law Tribunal to take stern action against erring audit firms. A firm found guilty by the Tribunal will be ineligible for audit assignment of "any company" for a period of five years. The action includes stiff penalties, mandatorily running higher than the amount of fraud committed.
The Companies Bill proposes that the fine "shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved." Fraud, the bill says, includes "any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss".
TEAM Daniel & Boaz
Chennai Corporate Law Firm
Helpline:- 9962999008
emai:- myadvocate@rocketmail.com
Mindful of the multi-crore Satyam scam and other corporate frauds, the Companies Bill 2011, tabled in the Lok Sabha last week, has proposed to give powers to the National Company Law Tribunal to take stern action against erring audit firms. A firm found guilty by the Tribunal will be ineligible for audit assignment of "any company" for a period of five years. The action includes stiff penalties, mandatorily running higher than the amount of fraud committed.
The Companies Bill proposes that the fine "shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved." Fraud, the bill says, includes "any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss".
TEAM Daniel & Boaz
Chennai Corporate Law Firm
Helpline:- 9962999008
emai:- myadvocate@rocketmail.com
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