AUDIT

• Audit
  
• Two important aspects of regulating the audit firms revolve around the availability of choice and accountability. Audit choice can be increased by: reducing barriers to entry (for example many institutional investors demand a Big Four auditor at the time of investment); changing the perception of corporates that the Big Four are the only audit firms that can service them; and looking at changes at the regulatory level such as joint audit, which has worked very well in France for the last many years.
  
• There is a definite need for greater accountability of audit firms. All of the Big Four are networks operating as independent units in each of the countries they operate in. This implies that if some mishap occurs in one country, such as Satyam in India, the global operation cannot be held responsible, accountable and liable. On the one hand, these firms advocate that they use their international systems, techniques and experience and on the other hand, they tend to localise accountability.
  

• Move over navaratnas; it is time for mahanavaratnas
  
• The department of public enterprises (DPE) has reportedly decided to wait for a year before bestowing higher functional and financial autonomy to nine top performers among 18 navratna companies by carving out a new category of mahanavratnas.
  
• The Planning Commission had recommended mahanavratna status to Bhel, Bharat Petroleum, Hindustan Aeronautics, Hindustan Petroleum, Indian Oil, NMDC, Power Grid Corporation, REC and SAIL.
  
• Mahanavratna status would have given these companies freedom to make investments up to 50% of their net worth—the sum of its equity capital and reserves—while the investment cap on a single project would have gone up to 25% of their net worth. The tag will also have given them greater functional autonomy for forming joint ventures.