NEW DELHI: Mazars India’s Managing Partner Bharat Dhawan has called for mandatory joint audits for all listed companies, citing increased fairness and transparency in financial reporting. Dhawan believes that implementing joint audits would enhance the credibility of financial statements and provide a more accurate representation of a company’s financial health.
“When two auditors look at the financial statements of a company, then they have a better view of it and it’s more transparent,” Dhawan said. He gave the example of France where joint audit is compulsory for all the listed companies. He stated that financial frauds are very common in France because of joint audits. Currently, in India, joint audit is compulsory for banks, PSUs and insurance companies. The government is considering the proposal of making joint audits compulsory for public interest entities.
In addition to this, on the compliance requirement related to environmental, social and governance policies (ESG), Dhawan agreed that globally companies complying with ESG norms are finding it easier to get funding. He added that in India too, lenders are looking at ESG norms while extending loans to companies.
“Globally all the regulators want companies to contribute to society by being sensible to environment and sustainability and having good governance. That’s why ESG compliance is considered important by the financial institutions and regulators while lending,” Dhawan said. Dhawan expressed optimism about India amidst tensions in China and Russia, noting that several companies are considering establishing their manufacturing base in India. He cited the example of Apple which is already manufacturing in India and trying to scale up its operations.