The president the Institute of Chartered
Accountants of India, Amarjit Chopra, has called on independent
directors to be held to account over their potential involvement in
the Satyam scandal — India’s largest corporate fraud.

Chopra told International Accounting
Satyam was a corporate governance failure and it is
unfair auditors should shoulder the blame while independent
directors wash their hands of any responsibility.

“As the president of the institute, I feel
very strongly that only the auditors have been targeted and the
independent directors have been allowed to get away scot free,”
Chopra said.

Chopra believes independent directors should
be investigated and there needs to be a broader probe into the
remuneration pattern and appointments of independent directors.

Chopra said audit committee members, and in
particular the chairman, would have a better insight into the true
financial health of a company than external auditors. He added that
the audit committee is supposed to be financially literate and be
able to pick up red flags on a company’s balance sheet.

While being careful not to absolve any
responsibility from auditors, Chopra points out that external
auditors come into play only at a later stage once the accounts
have been approved and signed off by management.

As the investigation into the Satyam rages on,
Chopra hopes reforms and new regulation will help prevent
white-collar crime of such scale in the future.