InvestorQ : Is it now compulsory for companies to disclose details of forensic audits?
Anu Biswas made post

Is it now compulsory for companies to disclose details of forensic audits?

Answer
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Ria Jain answered.
2 weeks ago


This is the latest regulatory change made by SEBI after what happened in the case of ADAG group, Yes Bank, DHFL and HDIL group companies. Now SEBI has made it mandatory for listed companies to disclose details of the findings of any forensic audit to the exchanges.

In the past, statutory investigative agencies like CBI or ED ordered forensic audit into companies for suspected frauds and money laundering. However, these details were never made public as they were not required to be disclosed.

Considering that forensic audit outcomes are highly price sensitive, concealing such details from investors gives an advantage of information asymmetry to privileged persons. With disclosure of such forensic details mandatory, there should be a level playing field.