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Maintaining investor trust and fostering business integrity are critical for development. Chief Justice Ashok Bhushan of the NCLAT

<p>The chairperson of the appellate tribunal NCLAT, Justice Ashok Bhushan, emphasized on Tuesday how crucial corporate integrity is to economic progress and that corporations’ first duty is to provide a set of accounts that can be trusted. He said that in order for every link in the transparency and governance chain to function correctly and to the best of its ability, continual vigilance must be maintained.</p>
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<p>Speaking at the worldwide conference on “Transparent Financial Reporting and Audit Quality – Pillars of Corporate Governance,” which was hosted in the nation’s capital by the National Financial Reporting Authority (NFRA), was the chairman of the National Company Law Appellate Tribunal (NCLAT). It is the primary duty of businesses to compile a reliable set of accounts. Financial scandals have been caused by subpar accounting procedures on several occasions. A poor record-keeping system leads to inaccurate financial statements, which negatively impacts the overall corporate environment, according to Bhushan.</p>
<p>He said that it gets more challenging to raise capital from investors and institutions if the financial situation is not honestly stated. He said, “We have seen situations where large investors have been misled into investing in companies where financials have been window-dressed and oversight mechanisms have not worked as effectively as expected, even though large investors do have better bargaining positions than small investors.”</p>
<p>As the country strives to rank in the top three economies globally, Bhushan said that maintaining corporate integrity is critical to fostering development, preserving investor trust, and safeguarding investment interests. He also discussed corporate crimes that had occurred in the nation during his address. In a number of these instances, auditors had not gone far enough, and in the worst situations, they had even interfered or conspired with management to the detriment of shareholders.</p>
<p>“It equates to deceiving the lenders and investors if the auditor neglects to highlight errors and this continues year after year. It can be considered cheating in certain circumstances. He said, “We have seen a number of examples in India where money was diverted and auditors failed to carry out the necessary processes to find the inconsistencies.</p>
<p>NFRA Chairperson Ajay Bhushan Prasad Pandey said at the conference that the enforcement technique was prioritized above the supervisory approach when the regulator first started operating since the situation at the time called for that particular kind of medication.We’ve introduced firm-wide audit quality inspections as a new instrument to our regulatory toolkit. According to him, this is in line with one of our goals to promote a systemic improvement in audit quality and provide the audit profession a chance to take corrective action.</p>

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