MUMBAI: Auditors should be vigilant enough and have the courage to ask difficult questions while refusing to walk away at the first level of resistance, which can help detect or prevent accounting and financial frauds early on, said Sebi chairman Tuhin Kanta Pandey while addressing an event on forensic audit organised by the national auditors body ICAI in Mumbai.
The head of the capital markets regulator also said the country continues to dominate the global markets in terms of primary market fundraise which at the same time also raises the bar on transparency and governance."It is your vigilance, your courage to ask difficult questions and your refusal to walk away that will ensure our markets continue to command global trust.
The future of financial governance will be determined by our collective ability to anticipate risks and detect anomalies early on. Forensic accounting should not be treated as a post-fraud tool only but as a tool to detect and prevent frauds," Pandey said here on Friday.
"Negative impact of financial frauds on the securities market is tremendous as they erode investor confidence, discourage genuine investment, and directly undermine market integrity. As professionals connected with the securities market, I want you to think about the future of our markets," he said, while highlighting that the ICAI, too, is working on developing an actionable framework towards preventing financial fraud in the securities market.
Pandey further said the Sebi has employed various measures, ranging from regulatory interventions to enforcement actions and forensic audits to uncover various financial frauds or rein in unethical behaviour and practices in the markets."We have focused on capacity building both internally and externally.
Going forward, our sustained focus will be to increase the level of investor awareness towards such frauds," Pandey said. The Sebi chief said while our country continues to dominate the global markets in terms of primary market fund raising, this also increases our responsibility to maintaining transparency and governance.
"As custodians of this trust, we must safeguard market integrity, the foundation that fuels investor participation and sustains capital formation," Pandey concluded.